Japanese Police Step Up Enforcement Against Scam-Related Money Laundering

Japanese law enforcement is preparing a significant overhaul of its approach to tackling money laundering linked to fraud, as scams increasingly rely on illegally traded bank accounts to move stolen funds. New measures outlined by the National Police Agency signal a shift toward earlier intervention and stronger penalties aimed at dismantling the infrastructure that enables scam operations.

According to police data, bank transfers remain a primary channel for fraud-related payments. In 2024, around half of all telephone-based fraud cases involved victims sending money directly to bank accounts. The proportion was even higher for investment and romance scams conducted through social media, where roughly 80 percent of cases relied on account-based transfers. Many of these accounts were obtained through illegal sales tied to so-called remittance side jobs that recruit individuals to provide or control accounts for criminal use.

To address this, authorities are seeking to revise the criminal proceeds transfer prevention law. The proposed changes would strengthen punishments for the illegal transfer or sale of bank accounts and expand oversight of informal remittance work that has become a key entry point for laundering scam proceeds. Police are also considering more aggressive investigative tactics, including the use of decoy bank accounts created under assumed identities to trace criminal networks and fund flows.

Enforcement data suggests the scale of the issue is growing. Police investigated more than 4,300 cases of illegal bank account trading last year, more than three times the level recorded when penalties were first increased over a decade ago. Officials say this reflects both rising scam activity and deeper reliance on account-based laundering structures.

Japan’s approach mirrors a broader regional trend toward faster financial intervention. South Korea, for example, is reviewing powers that would allow regulators to suspend suspicious accounts before funds can be moved out of regulated markets.

By tightening controls on account misuse and targeting the mechanics of fund movement, Law enforcement are aiming to disrupt scams at the transaction level rather than after losses have already occurred.