Operators of $1.5 Billion Fraud Scheme Extradited to the US

The defendants solicited money through promising high returns and low risk through a technique called “factoring.”

Japan has extradited to the US authorities two former executives of a Las Vegas, Nevada, investment company claiming they headed a $1.5 billion Ponzi-style fraud scheme.

Junzo Suzuki, 70, and his 40-year-old son Paul Suzuki, both of Tokyo, were each indicted on eight counts of mail fraud and nine counts of wire fraud in a scheme the FBI said operated through Las Vegas-based MRI International Inc. The Suzukis will make their initial appearance this afternoon before US Magistrate Judge Cam Ferenbach of the District of Nevada.

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The indictment identifies Junzo Suzuki as the firm’s Asia Pacific executive vice president and Paul Suzuki as general manager for Japan operations.

Thousands of Japanese investors were victims, who argued that the officials collected money even though they knew the company had no intention of using the funds for asset management, the U.S. Department of Justice said on Thursday.

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A Ponzi scheme style

Meanwhile, the defendants are accused of using investors’ funds to pay for gambling, travel by private jet and other personal expenses.

Prosecutors said the scheme operated for at least four years before it was exposed in 2013.

According to the charging document, the defendants solicited more than $1.5 billion through the company service center in Tokyo, promising high returns and low risk through a technique called “factoring.” The company promised high returns buying accounts receivable from medical providers at a discount, then attempting to recover more than the discounted amount from the debtor.

The Department of Justice alleges the Ponzi scheme defrauded victims by using money from new enrollees to pay early-stage investors and persuade others to take part.

Japanese authorities arrested the Suzukis in January 2019 at the request of the United States and surrendered them to the US authorities on April 17.

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