A Philippine court has ordered the arrest of Kazuo Okada, a Japanese billionaire casino mogul, who has been charged three counts of fraud while he was CEO of Tiger Resorts.
Okada, age 76, a man who first made his huge fortune in the 1990s as a supplier of pachinko machines to Japan and eventually made a big early investment into Wynn Resorts, has been accused to have siphoned $3.16 million from Tiger Resorts during his term as chief executive.
How it all Started
In 2017, Universal Entertainment Corporation began its probe of Okada and Yoshinao Negishi (former director and general manager of Universal's administrative division) based on the suspicions that many of the company directors have illegally approved the release of approximately JPY2 billion ($17.74 million) from a subsidiary without undergoing the proper internal decision-making procedures.
The gaming company conducted its probe onto the multi-million dollar illegal fund loss in 3 months (September 2017), with investigators concluding that the Japanese billionaire did commit fraud on three separate incidents. On December 2017, Universal said that the company had implemented new rules and measures to prevent such incidents from happening again.
Kazuo Okada lost his board position in 2017 at Universal, with the board accusing him of misappropriating $20 million in funds, to which he denied the allegation. Other than that, he was also ousted as director of an investment company in Hong Kong which controls Universal Entertainment, as a result of conflict between family members over control and money.
The Accusations in Detail
Back in January 2018, local news media The Manila Bulletin reported that Tiger Resort Leisure and Entertainment Inc. (TRLEI), which operates Okada Manila, filed two fraud charges against Okada and former Tiger Resort President and Chief Operating Officer Takahiro Usui with the prosecutor's offices in the cities of Parañaque and Makati.
Siphoning of $3.16 million in salaries and consultancy fees
In the first complaint, TRLEI accused Okada of taking $3.16 million in salaries and consultancy fees even though he only served as the company's chief executive officer for only a month. Also, it claimed that Okada and Usui allowed the release of corporate funds with "no Board resolution, approving or authorizing the payment of (such) astronomical sums to Mr. Okada, whether as consultancy fee or salary."
The casino operator demanded that the two return the amount but they were ignored, "It is ingrained in jurisprudence that the failure to account for or return upon demand the money or property held in trust created a legal presumption of misappropriation."
TRLEI also accused Okada and Usui of perjury after the two questioned their ouster. In June 2017, both were abruptly removed from their individual posts after a Universal Entertainment boardroom coup.
Defective LED contract worth $7 million
The second complaint against Okada came from his decision to grant a supply contract for the installation of LED fixtures worth $7 million in Okada Manila to his own company Aruze Philippines Manufacturing Inc. It turns out that Aruze was not authorized to engage in the manufacture of lighting materials.
Okada Maintains Innocence
Okada maintains his innocence, stating that the charges were "to destroy my reputation in the business community and discredit all the hard work I have put into the establishment, rise, and success of Okada Manila, which is now operated by my accusers."
Okada states the money being questioned was a part of his compensation as CEO. However, according to Tiger Resort's management board, they did not authorize the payments and stated they were instead made by the company's ex-president Takahiro Usui. An arrest warrant for Usui was also issued. Both men were ousted from the company (operated by Universal Entertainment Corporation) in June 2017 after the board accused Okada of misappropriating $20 million.
To make things even stranger is that Okada's TRLEI company is currently being managed by Tomohiro Okada, his son. TRLEI is controlled by Universal Entertainment Corp. (UEC), which is then controlled by Okada Holdings Limited (OHL).
Okada said, "How can I defraud the company that I own. As owner of Okada Manila, it is absolutely absurd for me to ‘unlawfully take' these salaries and fees." Okada filed a motion for reconsideration at the Philippine DOJ, saying the accusations against him are baseless. He claims he is the victim of a boardroom coup and the questioned funds were legal director's loans that he used to reinvest in junket operations for the Okada Manila.
Okada is suing his wife and son in the hopes of getting back the control of the company.
He also said he had invested more than $2 billion in the Okada Manila resort, "How would I commit estafa [fraud] against TRLEI and Okada Manila for a measly amount of salaries when I was the one who established and caused the rise and success of Okada Manila?"
Source:
https://www.japantimes.co.jp/news/2019/01/07/national/crime-legal/philippine-court-orders-arrest-japanese-casino-mogul-kazuo-okada-fraud-charges/#.XDW_gLgxF8E
