LAS VEGAS >> The former head of a Tokyo and Las Vegas investment firm was sentenced today to 50 years in prison for bilking thousands of Japanese victims in what prosecutors called a $1.5 billion international Ponzi scheme that ranks among the largest-ever fraud cases in the U.S.
Defendant Edwin Fujinaga, 72, also was ordered to pay nearly $1.3 billion in restitution to victims, including many vulnerable retirees in Japan who were told they were safely investing in a medical collections business that could earn a 6% to 10% annual return.
Evidence at trial showed that Fujinaga instead spent lavishly on himself, buying a Las Vegas golf course mansion, private jet, luxury cars and real estate in California wine country, Beverly Hills and Hawaii. Fujinaga was a real estate developer in Hawaii decades ago.
Chief U.S. District Judge Gloria Navarro said efforts by Fujinaga to apologize were “offensive.”
Fujinaga blamed changes in the dollar-to-yen exchange rate for problems while he headed MRI International Inc. for more than a decade. He said he was trying to clean up a corrupt medical accounts payable industry and is now so “despondent” that he has to take medication.
The judge rejected his explanation and acknowledged that the severity of his crimes approached those of convicted U.S. Ponzi schemers Bernard Madoff in New York, Allen Stanford in Houston, and Scott Rothstein in Miami.
In court documents, prosecutors ranked Fujinaga several notches below Madoff, who was sentenced to 150 years in prison for bilking thousands of investors out of at least $20 billion, and Stanford, who is serving 110 years for a scheme involving more than $7 billion.
They put him on par with Rothstein, who is serving 50 years in a $1.2 billion case.
Navarro acknowledged the government could only document $813 million in cash investments in the case because MRI company books were incomplete before 2009.
But she agreed with prosecutor William Johnson, who said MRI had $1.56 billion in outstanding investments when the scheme collapsed in 2013. Johnson said it relied on “new investor money going out to old investors.”
“Yes, I made mistakes. I tried to keep it going. I became reckless and people got hurt,” Fujinaga said today, standing slightly stooped in blue jail scrubs with thinning, graying hair. He kept his hands on the defense table.
“I humbly apologize to all the people of Japan for all the chaos I caused,” he said. “I’m speechless that I can’t fix it.”
(Before setting up MRI, Fujinaga spent about two decades in Hawaii’s real estate industry, developing at least seven condo towers on Oahu in the 1970s and 1980s, often with partners. Among his projects were two towers in Waikiki now known as Maile Sky Court and The Windsor, The Summer Palace near the edge of Waikiki off Atkinson Boulevard, Harbour Ridge fronting Salt Lake Boulevard, Sun Hala and Summer Villa in Kapahulu and Hale O Pumehana in Makiki.)
Navarro rejected a bid for leniency from Fujinaga’s appointed defense attorneys, who disputed the amount and calculations of investor losses. They also pointed to Fujinaga’s age and unspecified medical issues, saying he would have to live to 122 before he could be freed.
The judge reminded Fujinaga that she heard the evidence presented at trial that led jurors in November to find him guilty of 20 counts of mail fraud, wire fraud and money laundering.
“It’s ridiculous for you to try to say it was all a mistake,” Navarro said. “I find it pretty offensive, and I’m sure it’s offensive to victims as well.”
Authorities are asking Navarro to let the government seize assets and property in the case.
Two former MRI executives who worked with Fujinaga — Junzo Suzuki, 70, and his son, Paul Suzuki, 40 — were arrested in Japan following Fujinaga’s trial and are being held in U.S. custody in Nevada.
They have pleaded not guilty in federal court to criminal fraud charges and face trial in October.