Money Laundering for Online Casinos Leads to Three Arrests in Japan
Osaka Prefectural Police have apprehended three individuals on allegations of involvement in a large-scale money laundering scheme related to online casino gambling. The suspects, all company executives, are believed to have facilitated the transfer and concealment of funds generated from illegal gambling activities on overseas platforms.
A Japanese police officer on patrol. (Source: Gazoo)
LISTEN TO THIS ARTICLE:According to law enforcement, the total amount funneled through their bank accounts reached approximately JPY4.9 billion (US$34.8 million). The money was derived from roughly 10,000 individuals engaged in illegal online gambling.
Related: Multiple Arrests in Spain after Interpol Uncovers Illegal Gambling RingThose arrested include two people from Osaka and another from Takatsuki. The three suspects are said to have operated companies that purportedly provided various services, but investigators suggest these businesses were fronts designed to hide the proceeds from illegal gambling operations.
The police allege that the illicit funds came from participants placing bets on Yous Casino, an overseas online gambling platform. Over the course of approximately 16 months, from March 2022 to June 2023, payments were made into the suspects' accounts on around 140,000 separate occasions. Authorities claim the suspects attempted to mask these payments as legitimate business transactions, effectively laundering the money derived from gambling.
Each of the suspects reportedly ran their own business entities, and their companies entered into formal contracts with the operator of Yous Casino. These contracts ostensibly outlined the provision of services and sales of products.
However, according to police, these agreements were merely a cover for moving large sums of money tied to gambling activities. The contracts allowed the flow of funds to appear legitimate, even though their true source was illegal gambling.
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A Sophisticated Operation
The investigation further revealed that of the money funneled through these accounts, approximately JPY2.9 billion (US$20.6 million) was redistributed to gambling participants as winnings. The remaining amount represented the casino operator's profit. A percentage of this profit, estimated to be between 1.5% and 2%, was reportedly siphoned off to the three suspects.
Police believe that the three individuals played a critical role in facilitating the money laundering operation by setting up systems that allowed illegal funds to be disguised as legitimate revenue. The volume of transactions involved and the extended period over which the activities took place suggest a high level of sophistication and coordination between the suspects and the online casino operator.
Japanese law prohibits gambling, except for certain government-regulated activities such as horse racing and lotteries, although this is changing as Osaka prepares to receive the country's first physical casino.
Still, online gambling, especially when operated from overseas, is strictly illegal. However, law enforcement officials have pointed out that illegal online gambling is a growing issue in Japan, with many participants unaware of the legal ramifications or risks involved.
The Osaka Prefectural Police are continuing their investigation, examining the financial records of the companies involved and seeking to identify additional individuals who may have played a part in the money laundering scheme. The authorities have not yet disclosed whether the online casino operator itself is under investigation or if any further arrests are imminent.
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