« Pirates release Ukrainian ship | Main | FBI continues 26-year-old Tylenol case »

Japanese man accused of major fraud

Japanese police arrested a businessman Thursday who they believe to have defrauded thousands of investors of $2.5 billion over eight years.

Kazutsugi Nami, the chairman of bankrupt bedding supplier Ladies & Gentlemen, or L&G, and 21 other executives were arrested by the Metropolitan, Miyagi and Fukushima Prefectural police departments in Tokyo a Metropolitan Police Department official said to the International Herald Tribune.

In what could be the biggest scam in Japanese history, Nami promised investors cash returns of 36 percent a year for their money. The investment also gave investors Enten, or Paradise Yen, a virtual currency that they were told would become legal tender in a post-recession era, according to the Guardian.

In September 2007, L&G filed for bankruptcy. Earlier that year L&G refused to allow investors to cancel membership and began paying them in dividends.