The businessman accused of a con worth at least 1.4 billion dollars in Japan's biggest ever pyramid scheme had promised to build a paradise on Earth for investors, some of whom even called him divine. But to lawyers investigating him, 75-year-old Kazutsugi Nami is an old hand at such scams whose cult of personality pulled in elderly people and housewives who thought they could get rich quick.
Sporting dapper suits and wavy hair slicked back, Nami was self-confident even as police came to take him away early Thursday, defiantly enjoying a mug of beer over breakfast in front of television cameras. Nami wooed his so-called "shareholders" by building a cult-like status, saying he had a "divine decree" to "eliminate poverty from this world," a phrase that is recurrent throughout his blog.
"We need to aim for a 'paradise of light' in this world, where there is no poverty, no war, no conflicts," Nami told his investors, according to laywers representing victims. "Nami was so charismatic that (investors) worshipped a 'Nami cult.' Even he is known to have said frequently: 'I am the law.' In this way, Nami had mind control over members," the legal team wrote in a report. Some even called him a "God." He further attracted investors by organising large entertainment shows featuring well-known singers.
Nami's case comes two months after Bernard Madoff, the former chairman of the Nasdaq stock market in New York, was arrested for using billions of dollars in his own Ponzi, or pyramid, scheme. Nami started his own currency called "enten" - apparently a combination of the Japanese for the yen currency and paradise - and allegedly promised his victims 36 percent annual returns on their deposits, which he then pocketed.
Nami, chairman of a now bankrupt bedding supplier called L&G, from the words "Ladies and Gentlemen," defended his scheme until the end. "Even if you make a bicycle, there is a gap between riders' abilities. Even if one cannot ride it properly on the first try, it doesn't mean that the bicycle is bad," he wrote on his blog two days before his arrest. "In that sense, even if you are unable to master L&G's business plan, it doesn't mean the plan isn't good," he added.
Nami, who was born in western Mie prefecture, reportedly has mastered scams throughout his life and had his first run-in with police in his late 30s. In 1971 he established a company called "APO Japan" based outside of Tokyo that sold gadgets to 250,000 people, claiming they would reduce gas emissions from car engines while generating power, according to victims' lawyers.
After his company went more or less bankrupt, he marketed a "miracle" stone, claiming it would transform tap water into mineral water, the lawyers' report said. In 1978 he served a prison sentence along with other corporate officials for the scam. During his time in jail Nami wrote a dissertation "On Happiness," which he said laid the foundation for creating his latest company.
The senior officials at "L&G" who were arrested along with Nami were old friends who worked at his previous companies. But Nami, wearing a pin-striped suit, admitted to a reporter in 2007 that he never used enten himself. Asked whether his salary was paid in enten, he replied, "God no, my salary is paid in yen."