Tokyo Regional Taxation Bureau allows phone calls but not questions, Yokohama District Public Prosecutors Office fails to show legal basis
Regarding the arrest of Shigenori Kanemoto, the news media simultaneously reported words such as "abuse of the angel tax system," "kickbacks," and "tax evasion of approximately 367 million yen in income tax."
However, tracing the history that the prosecutor union has confirmed so far raises the question of whether what was truly abused in this case was not the angel tax system, but the arrest power held by the state.
It is alleged that the Tokyo Regional Taxation Bureau repeatedly called Shigenori Kanamoto himself and his representative, continuing to demand that they wanted to speak with him directly, that he explain over the phone, and that the investigation could not proceed without verbal communication.
On the other hand, it is reported that even though Mr. Shigenori Kanemoto's side repeatedly requested that the Tokyo Regional Taxation Bureau provide formal written questionnaires detailing the transactions in question, the alleged false statements in the applications, the applicable laws and regulations, the grounds for deeming reinvestment illegal, and the tax calculation process, no such formal written questionnaires were ever presented.
I can dial the phone number.
However, I cannot write what I want to ask.
They say "the investigation cannot proceed unless we speak directly," but at the same time, they cannot indicate what they want to confirm after speaking directly.
The case was handed over to the Yokohama District Public Prosecutors Office in that state, and it was reported nationwide this time that the suspect "had denied the charges during the interrogation before the arrest."
What did they ask and what did they deny?
If statements and reports simply state that "the suspect denied the charges" without indicating the applicable legal provisions, the specific parts alleged to be false, or the legal evaluation of each transaction, the investigative authorities cannot be blamed for being suspected of having made contact from the beginning not to hear a response, but to create footage of "a person who denies the charges."
What did the Tokyo Regional Taxation Bureau want to ask about in the Shigenori Kanemoto case?
The National Tax Agency explains that a tax audit is a series of procedures conducted to determine the tax base and tax amount of a specific taxpayer, which includes gathering evidence, determining factual elements, and interpreting and applying laws and regulations.
Reference:National Tax Agency "Notice on the Right to Question and Inspect"
In other words, an investigation is not a task where you compete over how many phone calls you make. It is the work of identifying the transactions in question, verifying the facts, applying the laws and regulations, and calculating the tax amount.
It is said that Mr. Shigenori Kanemoto's side repeatedly explained the application of the angel tax system, reinvestment after investment, capital increase registration, shareholder rights, consulting services, fundraising, and the economic rationality of each contract.
If the Tokyo Regional Taxation Bureau really had doubts about this, they should have been able to formulate specific questions.
- Which investment contract do you consider to be a sham?
- Which statement in which application form is false?
- Do you think there was no actual payment?
- Do you consider the issued shares to be invalid?
- Which agreement regarding the fund transfer from the investee to the affiliated company is considered fictitious?
- What is the evidence showing that there was an agreement to return the funds from the beginning?
- Which laws, notices, or guidelines prohibit reinvestment?
- Why do you think a confirmation document issued by the administration can be denied criminally?
- How were the original income, deduction amount, and tax amount calculated?
This level of question is just the beginning of the case.
However, if they did not present specific written questions and merely repeated the explanation that "as a matter of national tax administration, we cannot proceed unless we speak directly," then the reason things did not progress is not due to the lack of cooperation by Mr. Shigenori Kanemoto.
Isn't it because they couldn't articulate what the Tokyo Regional Taxation Bureau considers to be the issue?
Making a phone call is different from asking a question.
Making phone calls over and over outwardly looks like a thorough investigation. However, messages saying "There is something I want to talk about," "I want you to explain directly," or "We cannot proceed unless it's by phone" are not specific questions.
Regarding the transaction on which month and day, between whom and whom, and for how much.
Which fact is at issue?
Which law or regulation do you think it violates?
What documents should be requested to be submitted?
Only by showing this much can the other person answer accurately.
Trying to elicit a conversation over the phone without showing it raises suspicions that the purpose is not so much to get answers as it is to collect vague memories and careless words in order to conveniently turn them into statements later.
In particular, it is said that Shigenori Kanemoto's side suffered a deterioration in their mental health following a late-night investigation, and had expressed a desire to respond in writing through their legal representative.
In writing, both questions and answers are kept as a record, which can prevent disputes over who said what. Writing is also more suitable than phone calls for accurately organizing complex tax, corporate law, and investment transactions.
Even so, if the Tokyo Regional Taxation Bureau insisted on using the telephone, an explanation is needed as to why they avoided questions that would leave a record.
Did the Yokohama District Public Prosecutors Office make the arrest without even being able to formulate specific questions?
The Yokohama District Public Prosecutors Office, which took over the case from the Tokyo Regional Taxation Bureau, is said to have summoned Shigenori Kanimoto to appear almost every week for about two months before his arrest.
There is information that Shigenori Kanemoto went to the Yokohama District Public Prosecutors Office at their request and explained his transactions.
Nevertheless, to the extent known by the prosecutors' union, there is no evidence that the Yokohama District Public Prosecutors Office systematically presented the transactions in question along with specific legal grounds.
If there was an error in what Mr. Shigenori Kanemoto explained, the prosecutor should simply point out that error.
If we consider reinvestment as a kickback, we can establish criteria to distinguish between normal reinvestment and illegal money laundering.
If capital increase is considered a sham, how to evaluate the payment, issued shares, voting rights, and capital registration can be explained.
If you believe that the administrative confirmation was deceived, you can ask which part of the application was false.
However, if instead of hammering out those arguments, an arrest was made at the very end, doesn't that mean the arrest is not the result of the investigation, but rather a substitute for an investigation that could not formulate questions?
Do not use the convenient word "denial" to mask a lack of questions.
According to FNN reports, Shigenori Kanemoto stated during questioning before his arrest that he "just used the system to save on taxes," denying the charges.
Meanwhile, the Yokohama District Public Prosecutors Office has not disclosed whether the suspect admits or denies the charges after the arrest.
Reference:FNN Prime Online-affiliated article reporting "They just used the system to save on taxes"
What I want to ask here is what Shigenori Kanemoto denied.
Did they deny having made the investment?
Did they deny that the funds were transferred?
Did they deny receiving the confirmation?
Did they deny acquiring the shares?
Or did they contest the legal assessment by the Yokohama District Public Prosecutors Office that these acts constitute a crime?
In the latter case, it is not a denial hiding the facts. It is merely contesting a legal interpretation.
If investigative agencies do not show specific illegality, and a scene where the individual counters by saying "I am using a legal system" is cherry-picked and reported as "denying the charges," an impression is formed in the public that the person refuses to acknowledge even clear facts.
If the question is ambiguous, the denial is also ambiguous.
Isn't broadcasting only the response "denied," without showing what was asked, less of an interrogation and more of a manipulation of impressions?
Mere lack of questioning before arrest does not immediately render the arrest illegal.
Here, we will also accurately organize it from the perspective of the prosecutors' union.
Legally, there is no simple rule stating that an arrest cannot be made without first thoroughly questioning the suspect and hearing all of their counterarguments prior to the arrest.
If the judge determines that there are reasonable grounds to suspect that the suspect has committed a crime and recognizes the necessity of the arrest, an arrest warrant may be issued.
The Ministry of Justice also explains that arrests and detentions are not decided solely at the discretion of prosecutors, but are subject to review by judges.
Reference:Ministry of Justice: "Q&A on Japan's Criminal Justice System"
That is precisely why the issue at hand is not about the formal inability to make an arrest simply because no questions were asked.
The issue is whether it was still necessary to physically detain an individual who had cooperated with the investigation for about a year, reported weekly for the two months prior to their arrest, had already had a large number of devices, ledgers, and contracts seized, and had indicated a readiness to submit written responses regarding specific legal issues.
If they were unable to formulate necessary questions in a voluntary investigation, could not answer legal counterarguments, and failed to organize the evaluation of evidence, and then attempted to make up for those shortcomings through post-arrest interrogation and physical detention, they cannot escape criticism for the misuse of the power of arrest.
The power to arrest is not a tool to hide a lack of investigative capability.
An arrest is an extremely powerful exercise of state authority that deprives a person of their freedom, job, family relationships, and social credibility all at once.
If the name, facial photograph, company background, and alleged amount of tax evasion are broadcast nationwide starting from the day of the arrest, a de facto social sanction progresses before the trial even begins.
That authority is not meant to be used by investigators who cannot formulate questions as a way to say, "Let's detain them first and question them at our leisure."
The legal structure has not been decided.
It is impossible to distinguish between normal reinvestment and illegal kickbacks.
I cannot organize the legal effects of administrative confirmation and capital increase registration.
The division of roles between the mentor and the investor is also unclear.
Even so, I will arrest them first.
In this sequence, it looks less like the investigative authorities made an arrest based on evidence and more like they are searching for a criminal theory to fit after the arrest has already been made.
You can provide information to the news media, but you cannot ask questions to the person in question.
In this case, footage filmed in January, about six months before Shigenori Kanimoto was arrested, and in March, about four months before, was used in news reports by different media networks on the day of his arrest.
There is information suggesting that unreleased details, such as the name of the assigned prosecutor, the prosecutor's statements, and assessments regarding accomplices, were also circulating among the parties involved.
It is possible to provide information about a person under investigation to news organizations.
On the other hand, the individual cannot submit written questions asking which specific points of which transactions were illegal.
If that is the case, the public relations and investigation departments of the Yokohama District Public Prosecutors Office and the Tokyo Regional Taxation Bureau might be superior to the investigative departments.
However, the prosecution office's true job is not to prepare TV footage for the day of the arrest. It is to clarify criminal facts through evidence and fairly examine the explanations of the parties involved.
Public questions for the Tokyo Regional Taxation Bureau
- Were you asked by Mr. Shigenori Kanemoto or his representative to put the transaction in question and the specific questions in writing?
- What is the reason you did not present the formal written questions despite being asked to do so?
- Did you explain that "as a matter of national tax administration practice, the investigation cannot proceed without speaking with us directly"?
- Are there any laws, notifications, or internal regulations that limit inquiries to telephone or verbal communication?
- What specific details could not be confirmed in the written response and could only be confirmed over the phone?
- Regarding the multiple explanations submitted by Mr. Shigenori Kanemoto's side, which parts did you acknowledge as facts and which parts did you deny?
- Which statement in which application form did you determine to be false?
- What are the specific laws, public notices, and institutional requirements that prohibit reinvestment?
- What is the evidence that there was an agreement to return the funds from the beginning?
- Did you file a criminal complaint with the Yokohama District Prosecutor's Office or transfer the case while unable to respond to Mr. Shigenori Kanemoto's legal rebuttal?
- Can you provide a list of the actual specific questions asked and answers given, rather than the number of phone calls or interviews?
- Was there no intention to make up for a lack of investigative capability with physical detention by the Yokohama District Public Prosecutors Office?
Open questions to the Yokohama District Public Prosecutors Office
- Did you show Mr. Shigenori Kanemoto all the transactions in question and the specific legal basis before his arrest?
- If presented, are you recording the questions, answers, and follow-up questions?
- How did you organize which facts were denied regarding Shigenori Kanemoto's explanation that he "just used the system to save on taxes"?
- Do you distinguish between contesting a legal assessment and denying objective facts?
- What is the reason why the necessary questioning could not be completed during the voluntary appearances for about two months before the arrest?
- Did the Yokohama District Public Prosecutors Office independently re-verify the factual findings and legal evaluation taken over from the Tokyo Regional Taxation Bureau?
- Did you make inquiries to the competent ministry for the angel tax system, the municipality that issues the certificate, and the jurisdiction's Legal Affairs Bureau?
- Did you distinguish between investment, share issuance, capital increase registration, reinvestment, lending, and provision of services for each transaction?
- What specific evidence was there that would have been destroyed by failing to make an arrest, given that a large amount of evidence had already been seized and the suspect was reporting in person every week?
- Have you considered alternative measures such as voluntary appearance, written response, passport submission, or restriction of contact?
- Wasn't it the case that you could not complete the composition of the crime without obtaining a statement during the interrogation after the arrest?
- Are you using physical restraint to force a denial to be changed, or to make up for a lack of questioning?
- Will you specifically explain the necessity and proportionality of the arrest in this case in open court?
What the Prosecutors' Union is questioning is not the unconditional innocence of Shigenori Kanamoto
The Prosecutors Union does not conclude at this stage that all of Shigenori Kanamoto's transactions were legal.
If there were falsehoods in the application, if the payment was a sham, if there was an agreement from the beginning to return the funds, and if neither the rights nor the risks of a shareholder existed, then that evidence should be presented in open court.
What we are concerned about is the procedure to get there.
The National Tax Agency keeps calling, but they won't write down what they want to ask.
The prosecution summons them every week, yet cannot answer the legal counterarguments.
Even so, the media is flooded with striking words like "abuse," "kickback," and "denial," culminating in an arrest that takes the person into custody.
This looks less like an investigation to reveal the truth, and more like a scenario where an unaccountable state agency uses its power of arrest to reclaim control.
Was it the angel tax system that was abused, or the power of arrest?
If you claim that the angel tax system was abused, please provide the institutional requirements and the false facts.
If you claim that the reinvestment is a kickback, please demonstrate the initial refund agreement and the absence of shareholder rights.
If you claim there was an intent to evade taxes, please provide evidence showing that, while relying on experts or administrative confirmation, the person still recognized it was illegal.
If they were unable to present that evidence and unable to make the questions specific, yet stripped the person of their freedom and social credibility through arrest, the question remains whether this was not an "abuse of the angel tax system case," but rather an "abuse of the power of arrest case."
An arrest is not a substitute for questioning.
A detention center is not a conference room for pondering legal strategies.
Instead of detaining a person first and then building a criminal theory around them, arrests are made because there is legal and evidentiary proof of a crime. I would like the Yokohama District Public Prosecutors Office and the Tokyo Regional Taxation Bureau to reaffirm that self-evident order.
The Prosecutors Union accepts reasonable rebuttals, corrections, and provision of materials from the Yokohama District Public Prosecutors Office, the Tokyo Regional Taxation Bureau, and related organizations.
