Japan probes possible Olympus gangster link: source

Fri Nov 18, 2011 5:01am EST
 
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By Yoko Kubota

TOKYO (Reuters) - A unit from the Tokyo Metropolitan Police Department's organized crime division has joined an investigation into an accounting scam at Japan's disgraced Olympus Corp, a source familiar with the matter said on Friday, in a sign that the scandal could widen.

Olympus, a world leader in diagnostic endoscopes, has admitted hiding losses for decades through improper accounting, but has yet to say how far this concealment went and what writedowns it will now need to take.

The source told Reuters the Tokyo organized crime unit was taking part in the joint investigation, which also involves the watchdog Securities and Exchange Surveillance Commission (SESC) and the Tokyo prosecutors office. But he added it was premature to say whether gangsters were involved.

"I've heard that one unit from the organized crime division has joined," said the source, who could not be identified as he was not authorized to talk to the media. "So they must be collecting information."

The New York Times reported that Japanese officials are investigating an apparent $4.9 billion hole in the accounts of Olympus as well as possible involvement of organized crime.

"Olympus made payouts amounting to many times the losses it sought to hide, and investigators suspect much of the additional money went to crime groups," the newspaper said, citing a memo prepared by investigators.

That memo says authorities want to find out if Olympus worked with crime syndicates to obscure the losses, and paid them huge sums of money for their help, the paper said, noting the memo was circulated at a recent meeting of officials from the SESC, prosecutors and police.

A Tokyo police spokeswoman confirmed that a probe of Olympus was under way, but declined to give details. The Tokyo Prosecutors Office and SESC declined comment, as did Olympus.   Continued...