Inside the 37.1 Billion Yen Theft from Lehman Brothers – The Man Reflects on His Money-Crazed Days
The “Asklepios Incident,” a major fraud uncovered in March 2008, involved the defrauding of 37.1 billion yen from Lehman Brothers, a U.S. investment bank, and is said to have been one of the triggers of the Lehman Shock six months later. Eikoh Saito, 62, who was arrested as one of the main suspects, was sentenced to 15 years in prison, an unusual sentence for fraud, and served 14 years. How did Mr. Saito, an elite securities executive with an annual income of 100 million yen, turn to crime and go on to ruin? And what did he think about while in prison for more than ten years? Lehman’s Prison” (Kodansha), a book about his life in prison, was published on May 16. We asked Mr. Saito about his “money-crazed days” at the time of the incident.
Yesterday, Marubeni hit its highest price since the beginning of the year (laughs). I think it’s interesting.
Mr. Saito appeared at the editorial office on the day of the interview, dressed stylishly in a dark blue linen-silk blend suit, a white shirt with blue stripes and yellow tie, and a black straw hat. He answered our questions with a soft, friendly smile.
A Marubeni Employee Offers “Too Good to Be True” Story
After the collapse of the bubble economy, the financial industry, which had been protected by the Ministry of Finance (now the Ministry of Finance) and had never been governed by market principles, experienced a wave of reforms in the early 2000s. Mr. Saito, who had seen this drastically changing environment up close, turned his attention to “reforming medical institutions” after retiring from Merrill Lynch Japan Securities.’ In October 2002, Mr. Saito joined Mita Securities as head of the Corporate Planning Office and launched Asklepios with the aim of fundamentally reforming and revitalizing medical institutions through fundraising and management consulting. In May 2004, when profits began to rise steadily, he was approached by Yuzuru Yamanaka, then a member of Marubeni’s Medical Business Department, with a “Marubeni project.
This “Marubeni deal” offered investors a high yield on their money by guaranteeing it to Marubeni, a major trading company, for a short period of time, from three to six months. It was “too good to be true. Saito and Yamanaka repeated this scheme and eventually succeeded in raising a total of 150 billion yen from investors including Lehman Brothers and Goldman Sachs, but it was later discovered that the “Marubeni guarantee” itself was a outright lie in the “Asklepios case. But the “Asclepius Incident” later turned out to be a outright lie.
Neither Goldman nor the former MD of Merrill Lynch ever questioned it, saying, ‘The business practice of trading companies is not annual interest but commission, so it cannot be converted into annual interest. For example, there are cases where the list price of a certain CT scanner is 120 million yen, but the amount Marubeni purchases is 30 or 40 million yen. Mr. Yamanaka says, “The leasing company will charge a lease fee on that 120 million yen, and the hospital will continue to pay that lease fee.
When Mr. Yamanaka talks about such things, not only me, but also when he brings people from securities companies and investment banks, they all listen to him and say, ‘Hmmm. If I had brought someone from a Japanese commercial bank, maybe they would have said, ‘That’s a little …….'”
A former motorcycle policeman was framed as a “double.
If someone had sent a certified letter of guarantee to the Marubeni head office to inquire about the authenticity of the certificate, the matter would have come to light much sooner. However, strangely enough, no one did so.
Sending a content-certified letter to a Japanese company is like a declaration of war. It means, ‘I don’t trust you, so let me check. I said, ‘Send it,’ but they said, ‘No, you don’t have to send it to Marubeni. …… In the end, I sent a content-certified letter to the person in charge, but not to Marubeni’s headquarters.”
In the end, this “Marubeni deal” was a “ponzi scheme” in which much of the money collected was used to pay interest to previous investors, without properly investing the money that was invested. In November 2007, during negotiations with Lehman at Marubeni’s headquarters, Mr. Saito had a former motorcycle cop he knew as a fake general manager of Marubeni, and the negotiations were successful. ……
Even then,” Saito said, “the place they prepared for us was a reception room dedicated to the Medical Business Department at Marubeni’s head office. I had a meeting with Lehman there with about six other people, and I thought it was just a coincidence that the general manager was unavailable.
At this point, I had already started to think about whether Marubeni could or could not get away with it, rather than whether it was a lie or not. Even if the case was a lie, Marubeni should be held responsible. Looking back on it now, I think it was an unusual situation.
In fact, at this point, Mr. Saito had already fallen victim to the “magical power of money” and was unable to back down.
Falling into the dark through the “magic of money
I was also receiving cash behind the scenes,” he said. Around May 2007, I was handed a large suitcase filled with wads of cash at a tax accountant’s office. I could imagine that it was a share of the 10 billion yen deposit from Goldman, with which negotiations had been concluded shortly before.
I carried about 300 million in cash, and Mr. Yamanaka said at the time, ‘I am under special orders from the president of Marubeni Corporation,’ so I thought there might be an ugly scene like this. …… I wanted to think so. But as you’d expect, there’s no story like this at a regular company.”
It seems that it was at this point that Mr. Saito, who had been working on the “Marubeni deal” while thinking that something was fishy somewhere along the way, lost his footing. He says that he abandoned his ideals and jumped at the lure of money, which he became obsessed with when he was earning 100 million yen a year at Merrill Lynch.
At that time, I drove a Lamborghini and bought a villa in Karuizawa. I had about three mistresses, and I even secured an apartment for each of them. I think people who commit crimes are always defending themselves.
Once they take the easy way out and use the money for their own personal gain, even if they commit a crime, they must now protect themselves. Once I, too, receive exorbitant money and pay it off to a woman or buy a car, I have to protect the self that was established there.”
Saito knew he was involved in a crime, but he continued to pretend to be someone he was not. In mid-November 2007, Yamanaka finally confessed to him that the guarantee for the “Marubeni deal” was a bright red fake. The bad premonition that he had been harboring turned out to be the worst possible reality. Nevertheless, the deadline for the redemption of the investment in Lehman was approaching. Mr. Saito tried to somehow pull money from Goldman to continue his bicycle operation, but the negotiations ultimately ended in failure. In February ’08, the bankruptcy of Asklepios became definitive.
After Asclepios filed for bankruptcy in March and went bankrupt, Yamanaka turned himself in, but Saito fled. He stayed in Guam and Hong Kong, but was detained by Hong Kong police and returned to Japan, where he was arrested on June 16.
The incident had triggered the “Lehman Shock.
Just before his escape to Hong Kong, Saito says he felt a strange sense of relief, despite the fact that he was in a position where tomorrow could never come.
During the days of the ponzi scheme and con games,” he said, “my sheets were soaked with night sweats. I was freed from that hell. I felt it in the detention center and prison. After all, there was no such thing as soaking wet sheets in jail or prison. The human body is honest, and that says it all.
In fact, Friday night, March 28, the night Mr. Saito fled overseas, was also the day that Lehman’s fate was sealed. On that night, Lehman CEO Faldo approached investor Warren Buffett with a request for additional capital. However, when Mr. Faldo did not mention the fraud that Lehman had suffered in Japan the previous weekend, Mr. Buffett was disbelieving and declined. Lehman, in dire straits, could not find a better savior than Mr. Buffett, and the company went on to collapse six months later. Unbeknownst to him, Mr. Saito’s incident triggered the collapse of Lehman Brothers.
In September 2009, Saito was sentenced to 15 years in prison. In addition to the massive damage of 37.1 billion yen, the sentence was probably imposed because Mr. Saito, for “certain reasons,” did not disclose how the money was used until the very end. The “reason” for the sentence is “because he did not reveal the use of the money until the very end. The “reason” is described in detail in the book, so we will not go into it here.
Mr. Saito, who was released on parole in 2010 and is now active in writing, wonders how he came up with the idea of writing “Lehman’s Prison. We asked him.
I happened to catch a glimpse of some darkness. If perpetrators = darkness, we don’t even know how much distance there is between the positions of perpetrators and victims, or between perpetrators and the general public, unless the perpetrators transmit something. Even if someone writes on the Internet, ‘You are a fraud, you deserve to be killed,’ or ‘You should die,’ some things are not known unless the perpetrator transmits them. So I have to keep writing, even if there is criticism.”
PHOTO： Takehiko Kohiyama
