The “De Facto” Executive and the ¥2.1 Billion

iGaming essay

I think it’s about time I talked about this.

Let me clarify what role I held in the payment processing industry. I was hired to develop the system for SumoPay, a payment service for an overseas payment group, acting as both the system architect and programmer. This payment service included online casinos abroad, which led to my arrest and prosecution. I was wrongly labeled the de facto head of the online casino payment processing company, alleged to have amassed ¥2.1 billion, and was subsequently convicted of habitual gambling in the first trial. By the way, I don’t have that kind of money—my bank balance doesn’t even reach ¥1 million, and I don’t have any money in safes or financial assets.

In 2020, I was contracted by a person referred to as [R] to build a payment processing system, which I later found out included online casino transactions. After consulting with lawyers and tax advisors, I believed it wasn’t illegal and continued with my involvement in the operations within Japan.

SumoPay, the payment service, doesn’t have a formal corporate entity. It was a joint venture represented by [R] and [H], acting as a gateway service for East Asia clients under contracts with payment providers in Europe. I wasn’t a direct party to these contracts. Although called a “de facto” executive, that’s simply incorrect—I had no substantive authority and only served as a nominal representative for a domestic corporation.

This distinction is undisputed and factual in terms of both appearance and management. So, I believe that media and investigators used the term “de facto executive” to cloud the true nature of my role. The term “nominal executive” would have been more accurate.

Looking back, the term “de facto executive” itself reveals quite a bit. There are plenty of terms like “operator,” “executive,” or “representative” they could have used, but the addition of “de facto” shows a degree of reluctance on the investigators’ part, likely acknowledging that I wasn’t the primary person of interest. Obviously, [H] and [R] were the central figures, and the bulk of the payment processing revenue was sent overseas.

If I were indeed the de facto executive, I should have seen around ¥2.1 billion, but unfortunately, I’ve never seen such an amount in my accounts.

Although, regrettably, the funds in question are considered criminal proceeds, I didn’t participate in this project believing it was illegal. Had it been clearly illegal, I wouldn’t have been involved. I also explained to the staff and contractors I worked with that this was legal, and they all cooperated under that understanding. They were all good people.

One of the alleged facts of my conviction included users and transactions with online casinos amounting to hundreds of thousands of yen. Investigators seem aware that the total transaction volume reached tens of billions of yen, which is true. While I can’t disclose the exact amount, looking back, the transaction volume was astronomical.

Given this volume, people might think the payment group was making a fortune, but let me clarify: my company, where I was a representative, received income as compensation for system development and maintenance services. I consulted with a tax accountant and properly declared everything, receiving an appropriate executive compensation amount.

Meanwhile, [H] received his share in his home country, and [R] received his share in both the U.K. and Japan. I don’t know whether he paid taxes on the money he received in Japan, but I did advise him to make sure he did at the time, though we are no longer friends.

In short, the bulk of the gross profits from payment processing didn’t go into my or [S]’s pockets but instead became assets of European individuals and companies.

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