Fate of Olympus financier shines light on Japanese legal system

Former Nissan chairman Carlos Ghosn's 108 days in pre-trial detention pale by comparison with the 966 days spent by Nobumasa Yokoo © AFP
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Almost three years of detention before trial. Eight-hour interrogations in harsh physical conditions. New charges brought at the last minute. It may sound like dystopian fiction but that is what happened when Japanese financier Nobumasa Yokoo declined to confess.

The prosecution of former Nissan chairman Carlos Ghosn has shone a spotlight on Japan’s criminal justice system, but his initial 108 days in detention pale by comparison with the 966 days Mr Yokoo — a leading figure in the fraud scandal at medical equipment maker Olympus — spent locked up before his trial.

The methods Mr Yokoo described in an interview with the Financial Times highlight concerns about so-called “hostage justice” and the extreme pressure applied to extract confessions in Japan.

“I’ve never met Carlos Ghosn, I don’t know him and frankly I don’t know what he did,” he said at a press conference. “But I do note a striking parallel in our cases, especially in the way the prosecutors chose to arrest him for one charge and then drag things on by arresting him on another charge.”

Mr Yokoo’s case was overseen by the same prosecutor who is now pursuing the ex-Nissan chief.

Mr Ghosn is living in Tokyo under strict bail conditions as he awaits trial on charges of financial misconduct. He has denied all charges.

The long detention of Mr Ghosn has prompted international outrage and put Japan’s justice system, which boasts a 99.97 per cent criminal conviction rate, in the dock. Prosecutors say they lack other investigative tools, such as wiretaps or subpoena powers, so extracting a confession is all important.

At a briefing in January, Shin Kukimoto, deputy chief prosecutor, denied criticism that the long detention period and intensive interrogations lasting up to eight hours a day could create an environment for forced confessions. “We listen properly to claims made by the suspect,” Mr Kukimoto said at a briefing. “We don’t do the kind of interrogation that forces a confession.”

Not everyone agrees that this is the best approach.

“Japan has long relied too heavily on confessions. There was criticism but it stayed inside the country,” said Shuhei Sugimoto, a criminal defence lawyer. “But now, the Japanese system is facing pressure from where it had least expected, and that international criticism could be a catalyst for change.”

Mr Yokoo was a retired Nomura banker when he became embroiled in the Olympus affair, which began in 2011 when Michael Woodford, the company’s chief executive, exposed a long-running scheme to hide losses via dubious acquisitions.

Mr Yokoo, a financial adviser to Olympus, was found guilty of abetting the falsification of financial statements, money laundering and defrauding a separate company called Gunei. He must report to prison imminently after an appeal to Japan’s supreme court failed earlier this year.

Mr Yokoo maintains his innocence but irrespective of guilt, his case shows the pitiless treatment meted out to any defendant in Japan who does not confess.

“I was detained for two to three months at Marunouchi police station. Except for the weekends, the prosecutors would pack us in a tight space in their basement with our hands cuffed from 9am to 5pm every single day,” he told the FT. “On the worst days, they would interrogate me for just three minutes and I would have to wait on a hard wooden bench for the rest of the day.”

One weekend, Mr Yokoo was packed into a bus with a few burly police officers and driven for hours to his “crime scene” at the Gunei headquarters, even though the charges related to abstract financial transactions. This was “nothing beyond harassment”, he alleged.

“I was interrogated without any recording and many times before the actual arrest,” he said. No lawyer was present. When he asked for a heater during interrogation on a cold December day, he said the prosecutor slammed the table with a rolled-up paper and shouted: “We’re not rich like you guys! We’re poor so we can’t afford heating!”

The Tokyo district public prosecutors office declined to comment on Mr Yokoo’s claims.

Perhaps more extreme than the nature of the interrogations was their duration. Mr Yokoo said he saw his family for only three hours during more than two-and-a-half years of pre-trial detention. At one point during his detention, he was prescribed a strong tranquilliser after he began hitting his head on the wall at 3am.

New charges brought 16 months after his initial arrest, and one month before his trial was due to start, meant another half-year in pre-trial detention. Akira Kitani, a judge turned defence lawyer, has also questioned an unusual decision by the court to let prosecutors revise their charges against Mr Yokoo during the final phase of his trial.

“In this case, the request for a revision in charges should not have been permitted . . . considering that there was a long period for both sides to adjust their claims during pre-trial proceedings,” Mr Kitani said.

While pleading guilty usually results in a lighter sentence, the contrast between Mr Yokoo and others in the Olympus case is stark. While Mr Yokoo was sentenced to four years in prison and ordered to pay $12m in penalties, the Olympus executives who actually falsified the accounts pled guilty and received suspended sentences, spending 40 days in detention at most. That gap creates a powerful incentive to confess.

Although Mr Yokoo has exhausted his avenues of appeal, he is now seeking a retrial after two pieces of evidence that were deemed critical in his criminal trial were discarded by the judge in a separate civil lawsuit.

The seven-year process has been tough for Mr Yokoo’s family. “We’re going to lose our house, we’re going to lose all our assets,” said Yuka Yokoo, his daughter. “But something I don’t look forward to is seeing anyone else experience this horrible treatment by this horribly flawed legal system.”

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