Losses Reached About 71.9 Billion Yen in 2024
According to confirmed National Police Agency figures, organised fraud in 2024 involved about 21,000 recorded cases and losses of roughly 71.9 billion yen. Spread across 365 days, that is about 200 million yen a day passing into the hands of scammers. Where does all that money disappear to? The money a victim transfers is converted into criminal organisation funds along a deliberately complicated route. Let us follow that trail.
Step 1: Collecting Money From the Victim
Fraud groups collect money in three main ways. Each method has its own tricks built in to evade being traced.
- Cash handed over in person: a collector visits the victim's home to receive cash. This is a common method within bank transfer fraud, especially the "it's me" impostor scam. Because the collector comes face to face with the victim, the arrest risk is high, so disposable low-level members are used
- Bank transfer: the victim is made to transfer money into an account registered to someone else (a mule account). The account is never in the criminal's own name - they use accounts bought from other people or opened with forged identification
- Electronic money and prepaid cards: the victim is told to buy them at a convenience store and read out the numbers on the back over the phone. Since the numbers alone are enough to cash them in immediately, this is the easiest method from the criminal's point of view
Some cases demand payment in crypto-assets instead. Crypto-assets offer a high degree of anonymity and are easy to send overseas, which makes them convenient for criminal organisations.
Step 2: Covering the Tracks (Money Laundering)
The money that has been collected is then moved along a complicated route to evade tracing. This process is called money laundering.
- ATM withdrawals by runners: money paid into a mule account is withdrawn as cash from ATMs by a runner. Because they are captured on the ATM security camera, disposable low-level members are used here too, just as with cash collectors. Since each withdrawal has an upper limit, they tour several ATMs and take out the full amount in a short window
- Hopping between accounts: the money is routed through multiple mule accounts to make tracing difficult. Every transfer - account A to B to C - raises the difficulty of following it
- Conversion into crypto-assets: cash is converted into Bitcoin or similar crypto-assets to anonymise it. Routing it through an overseas exchange makes it much harder for Japanese investigators to trace
- Overseas remittance: money is sent to accounts abroad so that Japanese investigations struggle to reach it. Southeast Asian countries are frequent destinations
Criminal organisations combine these techniques, complicating the flow of money to stay ahead of investigators. Because the cash is typically withdrawn within minutes to a few hours of the victim's transfer, freezing the account almost never happens in time.
Step 3: It Becomes Criminal Organisation Funding
Ultimately the money becomes the operating funds of the criminal organisation. Here is what the proceeds of fraud get spent on.
- Running costs for the fraud group (rented offices, mobile phones, buying contact lists, sourcing SIM cards)
- Payments to members (shared out among the callers, cash collectors and ATM runners - though the low-level members' cut is only a sliver of what the victim lost)
- Tribute payments to the organisation above them, such as an organised crime group
- Funding for the next crime (buying new contact lists, sourcing more mule accounts)
- Living expenses and entertainment for the ringleaders
What a low-level collector or ATM runner is paid amounts to only a sliver of the loss inflicted on the victim. Of the 2,274 people arrested for organised fraud in 2024, 1,651 (72.6 percent) were cash collectors, ATM runners or lookouts, while just 50 (2.2 percent) were identified as being at the core of an organisation (National Police Agency). The structure puts the arrests at the bottom and the profit at the top. Our article on who the people behind scam calls really are explains this disposable-labour structure in more detail.
What Is a Mule Account?
The bank accounts used in fraud are never in the criminal's own name. They are accounts bought from other people with an offer along the lines of "sell us your account and we will pay you X yen", or accounts opened using forged identification. In Japanese these are called tobashi kouza - throwaway accounts.
Selling your own account is a punishable offense under the Act on Prevention of Transfer of Criminal Proceeds. Even "just selling an account I never use" is a serious crime. If the account you sold is then used in fraud, you may face additional charges as an accomplice to that fraud. If you see a social media post saying "we buy bank accounts", never respond to it.
Why Getting the Money Back Is So Difficult
Because transferred money is withdrawn within minutes to hours, recovering it is extremely difficult. There is a law - the Furikome Sagi Kyusai Ho, or Act on Damage Recovery Benefit Distributed from Funds in Deposit Accounts Used for Crimes - under which you may be able to receive a refund if the criminal's account is frozen while it still holds a balance. In practice, however, the freeze usually comes too late and the balance is already zero.
That is precisely why noticing before you transfer is the single most important thing. Saying that recovering money once it has been sent is harder than winning the lottery is barely an exaggeration. If you receive a suspicious call, always consult your family or a consultation hotline (#9110 in Japan) before you move any money. Knowing the preventive measures against bank transfer fraud in advance is your strongest defence.
What to Do Immediately if You Are Victimised
If you have already transferred money, acting even one second sooner matters. Follow these steps.
- Contact the bank: call the bank that holds the receiving account and ask for it to be frozen. If you have only just made the transfer, there is a slim chance of freezing it before the runner withdraws the cash
- Report it to the police: file a report via the police consultation line (#9110) or at your nearest police station. Preserve your call history, the transfer record and any correspondence with the criminals as evidence
- Consult a consumer affairs centre: calling the consumer hotline (188) connects you to your nearest consumer affairs centre
Filing a report matters not only for recovering your own money but also for preventing other people from being deceived by the same method. Police build their investigations of criminal groups on the information in these reports. See our guide to reporting phone fraud for the specific filing procedure. If you need emergency services, call 110.
Society's Efforts to Cut Off Criminal Proceeds
A range of countermeasures is being pursued to cut off criminal organisations' funding. Banks have tightened identity verification when accounts are opened and have introduced systems to detect suspicious transactions. Daily ATM withdrawal limits have been lowered, and staff now speak to elderly customers making large transfers.
In the crypto-asset field too, know-your-customer identity checks at exchanges have been made mandatory and obligations to report suspicious transactions have been strengthened. However, tracing becomes difficult once funds are routed through an overseas exchange in a jurisdiction with looser rules, so international cooperation remains the challenge.
Summary
Money extracted by fraud disappears along a route of mule account, ATM withdrawal, conversion into crypto-assets and overseas remittance. Criminal organisations deploy sophisticated money laundering techniques to stay beyond the reach of investigators. Getting money back once it has been transferred is all but impossible. The strongest defence is simple: always talk to someone before you transfer money.