The Justice Ministry may help out loan sharking victims by imposing penalties on and seizing the assets of loan sharks via criminal trials and channeling the money into victim compensation funds, government sources said Wednesday.
The ministry's proposal comes following a high-profile loan-sharking case involving the Goryo-kai, a group affiliated with the Yamaguchi-gumi, Japan's largest underworld syndicate.
The proposal calls for the government to help the victims because they often fear reprisals.
Current law makes it difficult to confiscate the full amount of money earned from loan sharking. Only the portion that can be verified by analyzing the victims' money transfer activities can be seized.
The measure is part of new guidelines the ministry will propose to the Legislative Council when it holds a general meeting July 21. The ministry then plans to submit a bill to the Diet this fall.
Under the guidelines, prosecutors would play a key role in collecting penalties or seizing assets from loan sharks and determining whether and how much to compensate the victims.
Victims would be able to file complaints against the prosecutors' decisions.
Moneylenders providing loans at illegally high interest rates and engaging in unscrupulous collection methods have been a growing social problem.
Susumu Kajiyama, known as the "loan shark king" and the effective No. 2 figure in the Goryo-kai, since renamed the Mio-gumi, was sentenced to seven years in prison in February on charges of laundering money.
About 150 of his victims filed collective lawsuits against him, but many did not out of fear of reprisal.