How the Yakuza Make Money: Extortion and Strong Arm Tactics

-by Tyler McPeek

This is my fourth blog post about the Japanese mafia (yakuza) and the third about yakuza money making efforts.  For disclaimers about the sources of my knowledge being personal, rather than research-based, and information that is left out of these posts for purposes of loyalty and safety, see the introductions to the earlier posts on this topic.  These posts are based on “field research” and not on academic expertise; they are local and not national in their focus.  They are best regarded as "fictional memoir."  This time I’m talking about the bread and butter of the yakuza way of life as a profession, and here’s where I’m going to have to ruin some of the mafia mystique and romanticism surrounding its membership exclusivity.  Sometimes one can be a yakuza just by acting the part of a yakuza.  At the end of the day, it is more of a state of mind and an attitude, a way of living on the edge of an otherwise highly structured and inescapable societal structure, than it is about an official membership to a particular family or any sort of ideology about what it means to be Japanese (which they have been trying to sell to the public for years).  So, if you don’t give a fuck and you don’t give a fuck who knows you don’t give a fuck, and if you can handle your business and take what you want from life, regardless of the law and right out in the open for the world to see; if you don’t mind intimidating people and you never break character… you just might be a yakuza, at least to the general public—which is what really matters.  Being recognized by the corporate yakuza structure that is “yamaguchi-gumi” or “sumiyoshi-kai” or one of the other national organizations is not the most important thing for an individual who wants to live the life of a Japanese outlaw and be regarded as a yakuza–being able to manipulate others and be recognized by non-yakuza as being yakuza-like is far more important, in my humble opinion.  Having rank within the structure is just something that happens eventually to those who find themselves on the outside of the society.  It’s the last job option or the first for most people, never in between.  “Yakuza” tends to be something you know you are, or one day you realize you are and always were, it’s not something you leave a career in hotel management or airplane maintenance for.  Intimidation and extortion is the essence of making money with the “yak” attitude.  It’s nasty, to be sure, but it’s brute force of will, to take money from people and offer (usually) nothing in return.  To just walk up to someone and say “give it to me” is so un-Japanese that it can be very effective, but only if you have the right attitude.  It’s rarely about a gun or violence, it’s just the threat of “or else.”  I’m choosing extortion to discuss here, because it is something that almost anyone might be able to do, at any level, and it seems to exemplify the ugly and strong essence of what it means to be a mobster in Japan.  You need to 1) speak the right way, that means not like anyone else in Japan, but rather like only yakuza speak 2) have the right look, mostly in the face and eyes, but clothes and the right vehicle don’t hurt and 3) have absolute confidence that can only come from nothing to lose and nowhere else to turn.  I’ll illustrate with a few strong-arm tactics that I’ve notice for getting money from people.  Drunk salarymen, middle-aged women, the elderly, and small business owners are all fair game, let alone anyone stupid enough to borrow money or get involved in gambling debts at the back room mahjong parlors (see the “cheating pachinko” post for a fine example of how bad an idea that can be).

“Protection money” type strong arming of local businesses by lower and local yakuza lieutenants is quite common, especially in the countryside.  They normally don’t ask for enough to make it worth it to a local business owner to seriously consider resisting.  Also, once you have one monkey on your back, that’s all you really need, because if you pay one yakuza and another comes along asking for money, one of two things will happen.  You drop the name of the one you are already paying and either the other one slinks away, outgunned by the reputation of the other, or the new one goes of to scold the weaker one and confiscate the money.  In the later case, you may pay a little more, but you’ve now gained a stronger “partner” of sorts–someone to turn to for debt collection from deadbeat customers and various other difficulties that might befall a business of the night (though to be sure, most business owners would rather just not pay and deal with their problems on their own–if that were an option).  If you are in some kind of a night business, like street vending, girl selling, or late night drinking (water trade / 水商売) you will pay, sooner or later, unless you or your establishment’s ownership are already affiliated with a syndicate.  I had such a business (late night drinking) in Japan, and I fell into the second category.  My partner was a strong local boss, so I never got trumped by any other yakuza who came sniffing around for cash.  However, I normally let them talk long enough to learn something (and for my personal entertainment) about how the yakuza approach a business owner for money.  Nearly all of them pissed their pants after I finally did drop the name of my partner.  I’d be lying if I said I my sadistic side didn’t enjoy toying with them–they were trying to force money from me after all.  In any case, none of them pressed the issue, and they all recognized the name or at least understood from my confidence and the look in my eye that they should.  Not to toot my own horn, but there is a reason I had a partner like the one that I had–I’m not exactly a pushover myself.
I would classify the strong arm tactics of local yakuza in dealing with local business owners as falling into the same category as national phone scams like porn and shame scams or the “ore ore” / “俺俺、俺だ” scam (I’ll explain them shortly), with the difference being that there is a consequence to follow from ignoring or refusing to pay at the local level that doesn’t really exist with the phone scams.  The national scams are benign in that there are no consequences to holding strong and not paying, apart from maybe a little prank calls to your cell for a day or two if you try to argue with them, likewise dropping scary affiliation names does nothing for the phone guys.  On the other hand, those who refuse at the local level can be dealt with in some very creative ways, apart from an old-fashioned bitch smacking of the business owner.  I’ll give two examples that I witnessed happen to bar owners who refused to pay a local yakuza.  In both cases, the bars were shut down in short order, without direct violence.  The bars were minor places that couldn’t have paid much anyway.  In many cases, refusing a yakuza something that he wants tends to result in one becoming a play thing for the yakuza’s amusement, rather than a target of violence or anger per se, though both scenarios are feasible and common.  In one case, a small bar owner that I knew, who had been in the business for almost two years, had somehow avoided paying–due either to luck or some minor yakuza connections that later dissipated.  In either case, the bar owner felt emboldened by not having to pay earlier to the point that he just told a lower level yakuza to piss-off when asked for money.  Starting the next week, everyday, during the busiest business times, smoke bombs, fireworks, and once a wild, living tanuki (a raccoon-type animal, often translated as “raccoon dog” in dictionaries) were thrown into the bar through the front door.  The reader needs to understand that Japanese bars tend to be dark, cavern-like places with one entrance and no windows.  You can’t see someone coming, because the doors are often heavy wood with no window.  There is lots to say about the reasons for Japanese bar designs in a later post, but I’ll just say that people usually only go to a bar that they know of before hand; are introduced to by a regular; or are themselves a regular of.  So, the outside of a bar offers little clue as to what is inside or how much the place might cost.  Anyhow, continued emptying of the bar at peak hours resulted in the bar being shut down within 3 weeks.  In the second case, a more direct tactic was used.  The bar owner in this case did something to offend the yakuza’s business partner and was dealt with in a creative way.  The yakuza and a few friends of his dressed in a typical Hollywood yakuza-style–black suits open at the front with unbuttoned white shirts and dark sunglasses at night.  They went into the bar every night from 9pm until 1pm and sat at the bar ordering water in their sunglasses.  Every time a customer came in, they sat next to him or her and stared at them.  They harassed the women and intimidated the men.  The bar closed in 10 days, with almost no income during that time and no real crime committed.  Most bar owners are living above their means and week to week.  A week without income is devastating and terminal.
Now back to the two phone scams I mentioned earlier.  One common scam, I’ve gotten these calls myself, is for a man to call you and start asking you about your porn-viewing habits or some other likely scenario of personal embarrassment.  One call I got started with “Hello, this is Star Entertainment.  I think you understand that you owe us some money for images viewed from your cell phone.”  I had never viewed porn on my phone, but getting a male voice to answer a cell phone (cell phone numbers have different digits than home phones, so it is obvious), it would be a fair assumption that the average Japanese guy between 25 and 40 would be looking at free or pay porn on their phone or at least had done so once in the not so distant past.  The caller was polite for only a very short time.  I denied looking at any images.  He then reverted to a typical yakuza type voice and said “don’t lie, you’ve been looking at them asshole.”  I tried a different tact, telling him that I was a foreigner and feigning an accent, which always scares away Japanese on the phone who in some cases have never talked to a foreigner even once in their entire life.  He persisted unfazed, also typical yakuza–the one type of people in Japan that more times than not don’t really give a shit if you are a foreigner or Japanese, and are definitely not intimidated by foreigners–oh the stories I have of when I mistakenly played the always reliable gaijin-card with a yakuza, only to have it backfire big time.  Anyway, eventually I out yakuza-ed him by asking him where his office was in my best yakuza banter and telling him I was coming down to kick his ass.  He hung up, but prank called me at intervals for the next 7-8 hours.  Basically, he was in a little room somewhere with a bunch of other gopher-level yakuza thugs of the lowest order calling random cell phones, hoping for men, then telling them that they viewed porn without paying by mistake and need to wire money to a given bank account (electronic bank transfers are very common in Japan and can be performed at any ATM with just a routing number and an account name).  This might seem like a stupid scam to some, but you’d be surprised how well it works–if you have the right attitude, which is effective even over the phone.  Another scam I was aware of, that eventually made national news, was when a few teenage gang members would get together in a karaoke box and drink beer and smoke while they made “ore ore” calls.  “Ore” is a very rude way for a man to say “I.”  In this case, they would mostly call home phones, where house-wives almost always answer, during the day when husbands are at work and children at school.  When a women picked up, they would sort of yell in a muffled voice that they had been in an “accident” and needed money sent right away by electronic transfer.  The woman often asked, “Who is this?”  The response was “ore ore” or “it’s me, it’s me.”  Again, simple but effective, but only if you have the balls.  They would get hundreds or thousands a day for a few hours work.  The phone number lists were often provided by an immediate lieutenant of some kind who was considering them for more important tasks, like being a runner or a collector.
Lastly, I would also point out that extortion often results from participating in an initially equal profit scheme with a yakuza, such as insider trading.  Once you cooperate with them, they will often just keep bleeding you, using the implied threat of exposure over what you’ve already done for them as a partner.  One of my associates was involved in an interesting insider trading scam.  A yakuza friend of his in Tokyo was working with a trader and a company executive.  At first, the yakuza made money only for himself and for the two informants, who gave him illegal information.  Everybody was happy.  But then he decided that the scam could be a lot bigger.  So, he called some other yakuza that he owed favors to around the country.  He gave them all times to buy and times to sell certain amounts of certain stocks.  My friend would go crazy with excitement as we sat in his office.  He would say, “oh, I’ve got 60 grand in this stock and it just went up to 150k.  I want to sell right now, but I have to wait for the sell command.  It’s part of the insider participation deal I made.  I have to wait for that call before I sell and get the profit.”  He was forced to wait till the stock price dropped to 90k before he got the call.  Of course, he still made about 30,000 dollars for doing nothing in one afternoon, so he couldn’t complain.  Basically, the Tokyo yakuza was trying to make the trades look normal with all of his friends by having everyone buy and sell at different times, taking different margins of profit, rather than having everyone maximize and act simultaneously.  But what does some Tokyo yakuza know about making stock trades look “normal?”  Well, maybe a lot, maybe not.  In this case, he seemed to know enough to make things safe for his friend, but not enough not to cast suspicion of the regulators and employers on his two informants.  Honestly, I doubt he even cared.  The informants begged him to stop, but he forced them to continue at a fast pace.  One employee lost his job and pension, the other was arrested (of course he said nothing about the yakuza to the investigators).  Meanwhile, my friend, hundreds of miles away, bought a red Ferrari with what he made over the course of 4 months from those second hand tips alone.  He used a friend’s construction company to build a nice custom garage to house his new car with a little smoking and drink lounge inside off the back of one of his houses.  We spent some good nights there drinking and racing his Ferrari in circles or sometimes against some of his crotch-rocket motorcycles drunk around the rice fields in the countryside near his house.  Good times..

Thus ends another chapter of Yakuza money making.  On the Tyler-scale described in early posts, I would classify all of the activity described in this post, except for the insider trading (but even that is sometimes independent), as low-level yakuza money making ventures.  Strong arm extortion of local businesses and phone scams are the realm of foot soldiers looking to make larger payments up the rank ladder, in hopes of being promoted for proving themselves to be good earners.  It would be inappropriate for bosses or captains to troll around muscling weekly payments out of shop owners or citizens.  In fact, most of the captain-level middle ranks wouldn’t even allow their names to be used for such ventures, though they wouldn’t be above accepting money from subordinates gained from such petty efforts, despite the supposed motto of not taking money from normal citizens (apart from gamblers, prostitution patrons, drug users, money borrowers, and the like).  If that rule was every true in earnest of the yakuza, it was broken regularly long before I ever knew these people–though some of them still like to say it (especially the bosses who like to promote their “modern day samurai” PR images).  The highest boss that I was friendly with, in charge of a large area of Western Honshu, used these lofty PR images of yakuza only in jest, plainly recognizing among friends that he was a businessman and criminal thug hybrid, nothing more and nothing less.  He would have laughed at my talking about any of the above money efforts though.  He was a chess piece in the national game.  A few years earlier, there had been 6 murders of local bosses.  After the murders, this guy went to jail for over ten years.  When he emerged, he was immediately recognized as the regional boss by the national syndicate and opened a large office (with the name of his yakuza family right on the front) in a prominent and visible building in the downtown area of the capital city of our prefecture.  To most it seemed as though everything from the murder to the incarceration was a carefully choreographed restructuring of the corporation's management in that area.  As in the regular corporate world, it had little effect most of the middle management or any of the lower ranks in that area.  They were, however, all aware of what had happened and some of the middle rank guys who felt loyal to the old, now deceased bosses, left the region for far away places like Kyushu or Hokkaido.  Likewise, we had some guys who had come from far off parts of the syndicate and had moved into our area looking for work in their previous are of expertise.  I had a girlfriend whose father was a higher ranking boss who had had to leave another area of the country to work for our region’s boss under such circumstances, so I became familiar with the details of this type of situation.  Most of these types had left after their boss got knocked off, fell out of favor, or some other kind of unfortunate circumstances had befallen them.  This is basically the same as a corporate transfer of a middle manager to another part of the country for a normal national company, only in the yakuza world.  It’s important to note that if the situation was a personal fuck-up and not something out of the control of the transferee, the yakuza would not go “ronin” and self-transfer, but would definitely need to stay in his own area and face the music.  After all, it would be better to lose a finger, take a prison sentence, pay a fine and be demoted, or the like, than to be hunted down and killed for running off to another island–where you would be dimmed-out by the local yakuza to the old group in any case, if the new group found out you broke your contract with your old bosses by running (which they would find out).  For obvious reasons, it is in everyone’s best interest to deal harshly with disloyalty, even if it’s from a competing or opposing organization, so as to preserve the rules that keep the whole structure from collapsing.

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