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 Treasury Department Targets New Yakuza Syndicate

WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the Kobe Yamaguchi-gumi, a syndicate of the Japanese Yakuza criminal network.  Specifically, OFAC designated two entities and three individuals: the Kobe Yamaguchi-gumi, three of its key executive members – Kunio Inoue, Osamu Teraoka, and Takashi Ikeda – and its core clan, the Yamaken-gumi, pursuant to Executive Order (E.O.) 13581, which targets significant transnational criminal organizations (TCOs) and their supporters.  As a result of today’s actions, all assets of those designated that are in the United States or in the control of U.S. persons are frozen, and U.S. persons are generally prohibited from engaging in transactions with them.
“Today’s designation is part of the Treasury Department’s collective efforts to target the Yakuza,” said Acting OFAC Director John E. Smith.  “This action reflects Treasury’s ongoing commitment to protect the U.S. and international financial systems from the malign influence of TCOs and to expose persons who are supporting them or acting on their behalf.”
President Obama identified the Japanese Yakuza criminal network as a significant TCO in the Annex to E.O. 13581 on July 24, 2011, and charged the Treasury Department with pursuing additional sanctions against its members and supporters to undermine and interdict their global criminal operations.  The Yakuza has relationships with criminal affiliates in Asia, Europe, and the Americas, where it uses front companies in legitimate industries, including construction, real estate, and finance, to launder money and hide illicit proceeds.  In the United States, the Yakuza has been involved in drug trafficking and money laundering. 
Yakuza syndicates are composed of groups tiered in a pyramidal structure, where the head family is comprised of members who are bosses of second-tier groups.  The senior executives of second-level groups are in turn bosses of third-tier groups. 
The Kobe Yamaguchi-gumi and the Yamaken-gumi clan
The Kobe Yamaguchi-gumi was formed in September 2015 when 13 subsidiary gangs, including the Yamaken-gumi, broke away from their parent syndicate, the Yamaguchi-gumi, to form their own Yakuza group.  Treasury designated the Yamaguchi-gumi on February 23, 2012. The Yamaguchi-gumi lost approximately 30 percent of its membership to the Kobe Yamaguchi-gumi, which has roughly 7,000 members, including associate members.  The Yamaken-gumi is a subsidiary group under the Kobe Yamaguchi-gumi syndicate.
Kunio Inoue, Leader of the Kobe Yamaguchi-gumi
Kunio Inoue is the leader of the Kobe Yamaguchi-gumi syndicate and Yamaken-gumi subsidiary gang.  Inoue declared the formation of the Kobe Yamaguchi-gumi by issuing a statement validating the departure of dissident factions from the Yamaguchi-gumi as a movement to protect the will of past Yamaguchi-gumi leaders.
Osamu Teraoka, Lieutenant of the Kobe Yamaguchi-gumi
Osamu Teraoka is the wakagashira (lieutenant), an upper-level boss, of the Kobe Yamaguchi-gumi, and head of the Kyoyu-kai subsidiary gang.  Teraoka presides over the business operations of the Kobe Yamaguchi-gumi.  In addition, the Kobe Yamaguchi-gumi is using the Kyoyu-kai headquarters as its base of operations.  Teraoka also played a prominent role in the breakaway movement that led to the division of the Yamaguchi-gumi.
Takashi Ikeda, Senior Official of the Kobe Yamaguchi-gumi
Takashi Ikeda holds a key position in the Kobe Yamaguchi-gumi as the shateigashira (leader among brothers of the godfather) and head of the Ikeda-gumi subsidiary gang.  Ikeda is often referred to as the “money man” because of the large amount of funds he controls.  Before the schism, Ikeda once held a position as the regional leader of Yamaguchi-gumi clans in nine prefectures and oversaw 3,580 Yamaguchi-gumi members.
With today’s action, OFAC has now designated 17 individuals and seven entities affiliated with the Yakuza.  This marks the second time a second-tier Yakuza affiliate has been targeted; the first designation was of the Kodo-kai in April 2015.  Tadashi Irie and Toshio Masaki, previously designated on December 19, 2013 as members of the Yamaguchi-gumi, have also joined the Kobe Yamaguchi-gumi, as indicated in the chart referenced below.
For a chart related to today’s action, click here.
For identifying information regarding the individuals and entities designated today, click here.
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