But then a welcome bolt of lightning hit out of the blue. The Tokyo metropolitan government, along with municipal authorities around the country, began offering subsidies to offset restrictions imposed on business activity, particularly bars and restaurants.

Ever resourceful, many groups fraudulently applied for the funds. But that didn’t last long as police quickly cottoned on to the scams.

Iijima-kai, an old-style yakuza syndicate that operates in “shitamachi” neighborhoods of old Tokyo, is symptomatic of the malaise confronting organized crime groups.

Its revenue was traditionally derived from “tekiya,” or itinerant street merchants known for their mob connections, at summer festivals and other events, police believe.

Gang members, deprived of a steady revenue from running stalls at festivals, were forced to become creative in coming up with new scams.

Iijima-kai, which traces its roots to the Meiji Era (1868-1912), made steady inroads over decades in downtown areas like Asakusa as well as seedy parts of the Shinjuku entertainment district.

Its office, a six-story reinforced concrete building constructed in 2001, is in a residential area of the capital’s Taito Ward.

In late June, the shutter on the first floor was closed, and two security cameras were installed, a sign the group has fallen on hard times.

Crackdowns on gang activities in recent years drastically curtailed the ability of groups to recruit new members.

The Iijima-kai has now only 80 members, many of whom are getting on in years.

Last October, police arrested eight members, including 63-year-old Masami Miwa, the No. 3 in the group, on suspicion of fraudulently receiving government subsidies totaling 5 million yen ($36,000).

Fast-forward to this past April, and the number of arrests rose to 23, amounting to one-quarter of the entire group.

They were collectively indicted on suspicion of illicitly receiving around 53 million yen in government subsidies between March 2020 and November 2021, along with another member who was charged without being arrested.

In 2020, events in which gang groups run pop-up stalls to make money started to drop off drastically.

“Our income plummeted because almost all festivals were canceled due to the pandemic,” one of the indicted members was quoted by police as saying. “So, we targeted the relief system.”

Many gang members used their real names to fraudulently apply for funds. Their drivers’ licenses with photos, health insurance cards and My Number identification cards were offered as identification, enabling an easy check of fraudulent activity after suspicions were aroused.

The bank accounts into which the funds were transferred were all genuine.

Some members applied for the funds in their own name, while others asked family members to do so on their behalf.

Although people with yakuza connections were ineligible to receive aid, many managed to get around the system.

Specifically, they targeted funds that included five types of COVID-related subsidies and loans.

“After some members managed to receive funds under their real names, others realized the loophole in the administrators’ screening process and apparently followed suit,” said a police investigator.

Yet, police suspect the fraud was not orchestrated and that each Iijima-kai member individually applied at their own whim for government funds.

“It was obvious that they would catch the eyes of the police,” said the investigator, referring to the way many gangsters did not bother to hide their identity.

NEW REALITIES

Police investigations revealed that public funds for measures to combat the COVID crisis ended up being transferred to yakuza groups.

As of this past March, Tokyo’s Metropolitan Police Department had arrested 23 yakuza, including a 56-year-old senior member of a group affiliated with the designated Inagawa-kai yakuza syndicate, on suspicion of illicitly receiving government subsidies.

Police referred the cases to prosecutors, and all of them were indicted.

And in July last year, Aichi prefectural police announced the arrests of four people, including a 50-year-old male member of a group affiliated with the Kodo-kai that belongs to another designated yakuza syndicate, the Yamaguchi-gumi, for fraudulently obtaining 1 million yen in government subsidies.

The enactment of the anti-organized crime law in 1992, along with anti-gang ordinances, has taken its toll on yakuza membership.

Sources of funding have also drastically changed.

Police analyzing the cases of gang members who were arrested in 2021 by type of crime found that “extortion” and “gambling” have fallen compared to 30 years ago, while “fraud” has increased from 3.9 percent to 13.3 percent.

The number of gang members dropped to 24,100, or about a quarter, during the same period. The findings were released in annual police white papers on crime.

A senior investigator concluded that yakuza groups have found it more difficult to engage in gambling and collecting “mikajimeryo,” or demanding money with menaces from business establishments.

As a result, gangs focused on other activities, such as swindling money from elderly people through phone scams, the investigator said.

“During the pandemic, people were restricted in their movements and there was relatively less contact. So, gangsters may have begun to make up for the shortfall with government subsidies,” the investigator added.

Lawyer Takashi Ozaki, who is knowledgeable about gangs resorting to violence in civic affairs, said, “The depletion of funding sources is the gangsters’ own fault.”

“When it comes to fraud, the police need to show they will not tolerate antisocial behavior by conducting a thorough investigation each time it happens,” Ozaki said. “This will eventually lead to the eradication of yakuza groups.”