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Health food business owner accused of fraud

Date Posted: 2002-03-24

An owner of a failed health food business is accused of bilking customers of his real estate business out of millions, as he built his new venture on similar pyramid schemes as he had used before. According to investigators, the man had asked people to invest ¥5 million each to a hotel venture promising 50 percent interest on the invested capital in two year’s time. But as the two-year time limit came and went, the company failed to deliver.

Investigators say that starting in the year 2000 the company had solicited investments for a development project that should have been completed by 2002. The investments total some ¥1.6 billion. The company bought a lot of land from the prefecture near Okinawa Convention Center for ¥900 million where it planned to build a hotel and a nursing home for the elderly. However, the police suspect that the company never planned to start the construction.

The former president of the real estate company denies knowing anything about the project. “This project was completely our company chairman’s plan, and he did it on his own. Besides using the money to buy the land, perhaps ¥500 million went to pay the old company’s debts and another ¥100 million was used for the real estate company’s expenses. The rest I don’t know,” the ex-president claims. The investors have banded together and retained a lawyer to try to get at least some of their money back.

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