Seven members of the quasi-gang “Chinese Dragon” were arrested on Sept. 17 on suspicion of obstructing a business by quarreling with a rival faction in front of an Apple store when iPhone 15s went on sale. 

The Tokyo Metropolitan Police Department arrested seven men and women including Kajiro Shirai, 50, who lives in Tokyo’s Kita Ward.

Police did not disclose whether the suspects admitted to or denied the charge.

Police believe that the suspects planned to purchase large numbers of iPhone 15s and resell them through vendors in China and other countries, then use the proceeds to fund gang activities.

However, they came into conflict with members of rival factions of the Chinese Dragon with the same intent.

The incident that led to the arrests began on Sept. 22, 2023—the day the iPhone 15 became available in Japan.

When the Apple store in Omotesando, an area lined with luxury brand stores, opened at 9 a.m., customers who had been eagerly awaiting the release of the new phone crowded inside.

However, by mid-morning, angry shouts could be heard in front of the store. About 20 to 40 men were arguing and glaring at one another. Some men sat on the sidewalk.

A commotion broke out, leading police officers in the area to respond to the situation.

According to investigative sources, similar disruptions continued for five days, forcing the Apple store in Omotesando to deploy security guards and stop in-store sales except for pre-orders.

The men that had gathered outside the store are believed to be members of two factions of the Chinese Dragon—which the National Police Agency has deemed “an antisocial force equivalent to a gang.”

Its members are mainly comprised of the children and grandchildren of Japanese nationals who remained in China after World War II.

According to investigative sources, the Chinese Dragon is divided into several groups, such as Akabane, Oji, Fuchu, Kasai, and Ueno, which are in conflict with one another.

In the incident, the right to purchase the new iPhone 15 from the Omotesando outlet was contested between a faction based in the Oji district of Tokyo’s Kita Ward and a faction based in the Akabane district, also in the ward.

According to investigative sources, the two groups had been buying smartphones in Japan and reselling them overseas—a profitable venture due to the weak yen and the high popularity of iPhones worldwide.

Until 2022, only the Oji faction had been bulk-buying iPhones at the Omotesando store, but the individual members who had been leading the purchases moved to the Akabane group—leading the two factions to clash outside the storefront.

The Omotesando Apple store filed a damage report for the disruption caused to its business.

WEAK YEN, HIGH DEMAND

Since iPhones first went on sale in Japan in 2008, the phones have become increasingly sophisticated and their prices have risen to about five times their initial price.

According to a survey conducted by MM Research Institute Ltd., a private research firm, the price of the iPhone 15 in Japan started at 124,800 yen ($880), which was about 30,000 yen lower than the average price of that model outside Japan.

Three of the iPhone 15 series models, including the Pro, were priced lowest in Japan among 38 countries and regions worldwide.

Hideaki Yokota, vice president of MM Research Institute, referred to this price difference and other factors.

“In some cases, people obtain these products at a low price in Japan and resell them at a higher price overseas,” he said. “In particular, when the product is first released, there is a worldwide shortage of inventory, so demand rises quickly and the product becomes a premium product.” 

Yokota said that the supply is not keeping up with the demand, and that “in China, even if the price is high, wealthy people who want to own the latest smartphones as soon as possible will buy them.”

Japanese authorities have begun to take action against such resale of iPhones.

In 2022, the Tokyo Regional Taxation Bureau imposed a 14 billion yen consumption tax surcharge on Apple Japan, the Japanese arm of U.S.-based Apple Inc.

The bureau found a case in which a single foreign visitor to Japan purchased several hundred iPhones and determined that these purchases were subject to taxation.

The bureau determined that a significant portion of purchased phones were intended for resale.

Yokota said Apple “should strictly limit the number of (iPhones) purchased per person as its responsibility to sell” in order to ensure that the products reach the users to whom they should be delivered.

The new iPhone 16 is scheduled to go on sale on Sept. 20.

The Metropolitan Police Department is on the lookout for similar schemes around the new phone’s release.

In an incident related to the Chinese Dragon, in October 2022, nine people were arrested on suspicion of obstruction of business and other charges for causing a brawl involving about 100 people at a French restaurant on the 58th floor of Sunshine 60, a high-rise building in Tokyo’s Ikebukuro district.

They were said to have gathered to celebrate a group member being released from prison.