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Japan

Bankrupt kimono seller who went under owing an estimated US$10 million jailed for fraud in Japan

  • The sudden closure of Harenohi in January left some 2,000 women without formal attire for their once-in-a-lifetime ’coming-of-age’ ceremony
PUBLISHED : Wednesday, 19 December, 2018, 9:51pm
UPDATED : Wednesday, 19 December, 2018, 9:51pm

The former head of a bankrupt kimono rental firm was sentenced to 30 months in prison on Wednesday for swindling banks out of money to keep his failing business running.

Yoichiro Shinozaki, 56, of the now-defunct Harenohi, was convicted of defrauding about 65 million yen ($578,600) from two banks in September 2016 by presenting padded earnings reports. The sudden closure of his business left some 2,000 women without formal attire for their once-in-a-lifetime event.

In Japan, many women wear lavish furisode kimono, often costing several hundred thousand yen if bought, to mark the day when municipalities hold ceremonies for new 20-year-olds around Coming-of-Age Day, on the second Monday of January.

The accused “went way over the line as a business manager,” Presiding Judge Hidetaka Watanabe said in handing down the ruling at the Yokohama District Court. “His actions deserve strong condemnation because he selfishly ordered an accounting officer to tamper with documents in order to keep running the company.”

The defendant defrauded the banks with no intention to pay back the loans and padded the earnings reports to cover up the fact that his company was actually loss-making, according to the ruling.

According to a bankruptcy administrator, Harenohi went under owing an estimated 1.09 billion yen (US $9.7 million), 345 million yen (US$3 million) of which was from customers. Most of the debt has not been repaid, the ruling said.

Chieko Takaya, a 50-year-old from Yokohama whose eldest daughter planned to wear one of the firm’s traditional garments said, “During his 30-month prison term, I want him to reflect on his actions that caused damage to new 20-year-olds, with which he was not charged this time.”

During the trial, prosecutors had sought a five-year prison term for what they described as a premeditated crime. But the defence counsel had demanded a suspended sentence claiming that Shinozaki wanted deep inside to rent out kimono to women taking part in the event. He has admitted to swindling the money.

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The district court said the jail term for Shinozaki was shorter than demanded by the prosecutors as he has apologised to those troubled by the sudden shutdown of his business.

Shinozaki said during the trial, “I did something that I cannot make up for during my lifetime. I deeply regret it. I am very sorry.”

“I do not feel his sincerity even though he apologised after all this time,” said the 46-year-old mother of a woman who could not rent a kimono. “We will remember that sorrow every year around the time of Coming-of-Age Day. I want the defendant to never forget that we are feeling this way.”

Harenohi’s abrupt closure before the celebratory occasion on January 8 caused a furore among numerous female clients in the Hachioji area of Tokyo and Yokohama, Kanagawa prefecture. But the company has not been charged for the financial damage inflicted on the customers.

Police initially sought to charge the firm with customer fraud but gave up after finding it had been preparing kimono even as its business was deteriorating.