(December 18, 2013) — A Japanese fund manager has been sentenced to 15 years in prison after defrauding pension funds out of ¥24.8 billion (US$240 million) between 2009 and 2012.
The case, which echoed US-based manager Bernie Madoff’s audacious fraud by creating his pyramid scheme in 2008, was brought after Kazuhiko Asakawa lied about his firm’s investment performance and the size of assets under its management in order to solicit more investments from pension funds.
The court also handed down seven-year jail terms to his associates Shigeko Takahashi and Hideaki Nishimura, according to Agence France Presse.
Investigators found the Japanese firm, AIJ, had lost ¥109 billion ($1.1 billion) over nine years to March 2011 through derivative trading, using cash invested by pension funds.
As well as the jail terms the court also confiscated ¥570 million of AIJ’s assets and separately ordered them to pay a total of ¥15.7 billion.
“It was an audacious and shameless crime,” presiding judge Akira Ando told the court.
“The act was extremely heinous as they insinuated themselves (into the favour of) pension funds that required stable management.”
Madoff is currently serving a 150-year jail term in the US for his massive Ponzi scheme, after taking in billions of dollars from thousands of clients over decades, and paying out fake “profits” to some investors by plundering new cash from others.
His pyramid fraud collapsed in 2008, wiping out numerous family fortunes. He was arrested in December that year, and pleaded guilty in 2009.
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