Japanese town recovers 43 million yen in COVID money mistakenly sent to one man who gambled it away

Probably the most unexpected turnaround in an already long string of unexpected turnarounds.

It’s been a pretty wild ride since the town of Abu in Yamaguchi Prefecture accidentally sent 46.3 million yen (US$364,000) in COVID-19 relief money to a single resident, who also turned out to be the kind of guy who’d immediately blow it all on online casinos in a matter of weeks.

After a month of disappearances, lawsuits, surprise revelations, and finally an arrest for fraudulent use of a computer, the biggest shock came in the morning of 24 May, Abu mayor Norihiko Hanada held a press conference announcing that approximately 43 million yen ($338,000) of that money had already been recovered by the town.

At the time how this miraculous and completely unexpected recovery was accomplished wasn’t clear, but the amount that came back was equivalent to what the recipient, 24-year-old Sho Taguchi, had transferred among three different payment companies. Since online gambling is illegal in Japan, banks and credit cards won’t authorize transfers to foreign casinos, so he had to first put the money into a Japanese company that handles online payments and then send it overseas.

Now it has come to light that this was all thanks to a renowned Yamaguchi area lawyer by the name of Osamu Nakayama. His ability to utilize several legal technicalities in unison to pull off this reversal of fortunes, has even amazed others in the law profession.

▼ Nakayama, presenting his white board notes “illustrating” how he did this and also showing that his mind works differently than most

To start, Nakayama knew that going after Taguchi for the money was a lost cause, and although conventional thinking might be to go after the bank for liability in the mishap, such a legal battle would take years, with no guarantee of success. Instead, Nakayama set his sights on the three payment companies. The exact way he approached them isn’t exactly clear, but according to reports he simply pointed out to them that Taguchi’s dealings with them was morally problematic both because of how he obtained the money and how it was used. Nakayama reportedly then mentioned that, because of anti-fraud laws passed in 2010, when third parties are involved in suspicious transactions the government can look into their books.

Considering these types of businesses are attractive platforms for some dubious businesses and operations to move money around, such an audit would potentially open a really big can of very nasty worms.

▼ We’re talking like industrial sized cans of worms here

So, the payment companies opted to simply refund the entire amount of money that Taguchi deposited instead. However, since the transaction was between the companies and Taguchi, they could only refund the money back to him, which brings us right back to square one, with him holding the money and Abu scrambling for a legal channel to get it back from him.

Luckily, Nakayama was prepared for that as well. He found that Taguchi just happened to also have been delinquent on some past taxes. Employing the National Tax Collection Act, Nakayama knew that in such cases the government has the power to seize more than the amount owed in taxes. The exact amount Taguchi owed isn’t known, but it didn’t matter anyway, because Abu had the legal authority to go in and take all 43 million yen right when the payment companies refunded him.

This creates a bit of an odd situation, because the 43 million Abu is holding isn’t technically connected to the original mistaken bank transfer, it’s a seizure of assets because of delinquent taxes. Taguchi can demand that they refund him everything except for the money owed in taxes, but by the time that process is carried out, Abu’s own slam-dunk lawsuit against him will probably have been concluded in their favor. It’s a clear-cut checkmate.

It’s certainly an impressive bit of lawyering that some say should be made into a movie. Personally, I think it’d still need a car chase or sword fight to put it in feature film territory, and considering everything that’s happened so far, neither seems totally out of the question yet.

But it’s also hard to say there’s an entirely feel-good conclusion of justice being served, since it was the payment companies that had to dole out the cash and the casinos get to keep everything that came their way. All things considered though, it could have ended in much worse ways.

Source: NHK News Web, Daily Shincho, Bunshun Online
Top image: Pakutaso
Insert images: Pakutaso (1, 2)
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