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Japan financial regulators launch investigations into big banks' mobster ties

Financial regulators in Japan have widened their probe into the loans-for-mobsters scandal, now targeting all of the country's three largest banks. Mizuho Bank has already sanctioned 54 of its executives.

Japan's Financial Services Agency (FSA) announced on Tuesday that Mitsubishi UFJ Financial Group, Mizuho Financial Group, and Sumitomo Mitsui Financial Group Inc. would all be investigated for allegedly lending money to Japan's "yakuza" crime syndicates.

On Monday, the Mizuho Financial Group's chairman of banking business, Takashi Tsukamoto, resigned over the scandal. A consumer finance subdivision of Mizuho, Orient Corporation, made more than 230 loans worth $2 million (1.45 million euros) in total to people tied to organized crime, according to an internal investigation.

The panel of lawyers tasked with the investigation of Mizuho found that top executives were aware of business activities with yakuza gangsters but failed to stop it.

"Many officials and board members were aware of, or were in a position to be aware of, the issue," the panel wrote in its 100-page report, published on Monday.

"However, they failed to recognize the problem, believing that the compliance division ... was taking care of it," the report said.

Japanese Finance Minister Taro Aso criticized Mizuho's initial claims - which proved incorrect - that its executives knew nothing of the transactions. Aso said the denial was "the worst thing a bank can do."

The yakuza are transnational crime syndicates that are involved in everything from gambling, drugs, prostitution and protection rackets to white-collar crime and business conducted through front companies.

slk/tj (AFP, Reuters)