Three former managers of the Agura farm in Tochigi Prefecture that was selling a “wagyu beef ownership system” were arrested on suspicion of misleading consumers, in what might turn out to be one of the biggest consumer fraud cases in recent history. The managers promised annual returns of up to 8% for investors, when in reality, the number of cows “sold” and the actual cows themselves were not equal.
Investors bought into the scheme by buying cows from the farm, with the returns supposedly coming from sales of the calves born to the cows, which were then sold as wagyu beef. But according to the former managers, the 2011 Fukushima nuclear disaster left them bankrupt as the farm was less than 100 kilometers from ground zero at the nuclear plant. Shinichi Hirasawa, a lawyer for some of the 73,000 duped investors, said that the managers assured the consumers that “their dividends were safe” when in actuality, the cows weren’t there anymore. Total loss for the investors reached 4.34 billion dollars, and those figures included the savings of some pensioners.
Even Democratic Party of Japan leader Banri Kaieda has been linked to the scandal because of a series of articles he wrote twenty years ago. He wrote in the Shukan Seven magazine in 1992 that “interest is guaranteed at the point of application, meaning there is zero risk.” The victims have included him in the lawsuit, asking for 6.4 million dollars in damages because they followed his advice. Kaieda’s lawyer said that while his sympathies go out to the victims of the fraud, the article he wrote has nothing to do with the current investigation.
[ via Wall Street Journal ]