Unjustified Compulsory Executions: Funds from Fraud Victims Must Not be Illicitly Withdrawn

Editorial

16:51 JST, July 30, 2025

If funds that should be used to compensate victims of investment scams and other crimes are being illicitly withdrawn from frozen bank accounts, this cannot be overlooked. Measures to prevent the outflow of these funds are urgently needed.

The Metropolitan Police Department has arrested three individuals, including a de facto manager of a consulting company in Tokyo, on suspicion of fraud and other charges.

The three are suspected of faking the lending of ¥6.5 million to a systems-related company in Tokyo, then having authorities implement compulsory executions of funds from the company’s bank account that had been frozen, and fraudulently withdrawing ¥6.1 million.

Compulsory executions are a procedure in which a court confiscates a debtor’s assets based on a creditor’s petition. In this case, the procedure was abused.

Funds gained from investment scams had been pooled in the frozen account. The bank that held the account stopped the withdrawal based on the criminal accounts damage recovery law after receiving a report from the police.

The consulting firm allegedly petitioned for more than 20 cases of compulsory executions on frozen accounts held by multiple financial institutions, withdrawing a total of over ¥400 million.

The firm may have recovered funds from frozen bank accounts at the request of an investment fraud group and others. The MPD should work to grasp the entire picture of the scam.

What cannot be overlooked is that notarized documents were allegedly used for the petitions for the compulsory executions. Notarized documents are paperwork that has been legally proved by a notary public appointed by the justice minister. The notary public confirms the details of the lending and borrowing of money, among other things, in the presence of the parties involved.

The consulting firm allegedly used eight notarized documents created by the same notary public for the compulsory executions, meaning that the notary public believed the false explanation and created such documents with false content.

The notary public is a former senior prosecutor. Couldn’t such a legal expert with extensive investigative experience detect the falsehood? The Justice Ministry is investigating how the notarized documents were created. It should thoroughly investigate whether there are similar cases.

Financial institutions are struggling with how to handle frozen accounts. Regarding the compulsory executions petitioned by the consulting firm, some banks refused withdrawals. It is believed that they did so mainly because there were suspicious points regarding the account holders.

However, it is difficult for banks to decide on their own how to deal with court orders for compulsory executions. It will be necessary for the Financial Services Agency to formulate unified guidelines, among other steps. One idea is for the government to consider prohibiting people other than victims of fraud and other crimes from petitioning for compulsory executions on frozen accounts.

The annual losses caused by scams through social media or special fraud cases amount to nearly ¥200 billion. Last fiscal year, ¥4.9 billion was allocated from frozen accounts to compensate victims. To help victims, any further unjustified compulsory executions must not be allowed.

(From The Yomiuri Shimbun, July 30, 2025)