Investors bilked in Japan look to Las Vegas mayor for restitution

Los Angeles lawyers Robert Cohen and James Gibbons say they know what Mayor Carolyn Goodman should do with the $50,000 in campaign contributions she got from the alleged mastermind of a $1.5 billion international Ponzi scheme:

She should give it to their clients — thousands of Japanese investors who lost their life-savings in a scheme allegedly run by Edwin Fujinaga through his Las Vegas-based company, MRI International Inc.

"Ultimately, there's no question that all the money Fujinaga has really belongs to the victims," Cohen said. "He stole from the victims and gave it to the mayor."

Cohen suggested the idea in a July 16 letter to Goodman, but he said that so far all he's gotten from the mayor's staff is a cold shoulder.

Goodman, whose campaign finance reports show a $14,100 deficit, refused comment Thursday.

Fujinaga, 68, and two of his executives in Japan were indicted by a federal grand jury in Las Vegas earlier this month on fraud charges. Fujinaga pleaded not guilty and was released on his own recognizance, with travel restrictions. The other two defendants, Junzo Suzuki, 66, and his son, Paul Suzuki, 36, are not in custody.

Fujinaga was the largest individual contributor to Goodman's first campaign in 2011, according to campaign reports on file with the Nevada secretary of state's office.

In a statement to the Las Vegas Review-Journal after Fujinaga's indictment, Goodman said she plans to "let the justice system run its course," before making a decision on the $50,000.

Cohen suggested in his letter that the justice system has already run its course for the victims. On January 27, a federal judge in Las Vegas slapped Fujinaga and defunct MRI International with a $585 million U.S. Securities and Exchange Commission civil judgement, he said.

"The massive fraud ..., which had been underway at least since 2005 and continued unabated until its discovery in April 2013, is not just a matter of allegations; it is an adjudicated fact," Cohen wrote.

"For the thousands of victims and their families, the damages have been devastating," Cohen added. "As the statements in the court files attest, for many of the victims the investments represented their sole nest eggs, and thousands have lost their entire life savings."

MRI, which was incorporated in Nevada in 1998, purportedly specialized in a practice called "factoring," in which accounts receivable were purchased from medical providers at a discount and an attempt was made to recover more than the discounted amount from the debtor, the indictment states.

In fact, authorities say, money from new investors was used to pay off older ones to make it look like the business was a sound — a classic Ponzi scheme.

Fujinaga and the Suzukis stand accused of fraudulently soliciting investments from the Japanese residents from 2009 to 2013. They used investor money to unlawfully pay themselves sales commissions, subsidize gambling habits and fund their personal travel by private jet, the indictment alleges.

Fujinaga also used money in the scheme to cover his personal credit cards, buy luxury cars and pay a total of $25,000 in alimony and child support, according to the 2013 SEC civil complaint.

Cohen said that earlier this week he called the mayor's office, where an aide gave no clear indication if Goodman would be receptive his idea to return the $50,000 to his clients. The aide told Cohen that he might get a call from the mayor's campaign staff.

As of late Thursday afternoon, Cohen said he had not received a call.

A city spokesman for Goodman, who is "away from the office," had nothing to add to her previous statement, which he said "is still accurate."

How any money from the mayor might be sent to Japan remains unclear. Gibbons said a special trust fund could be set up, or the money could go to a court-appointed receiver for Fujinaga's remaining assets.

Contact Jeff German at jgerman@reviewjournal.com or 702-380-8135. Find him on Twitter @JGermanRJ.