Suspended sentences for senior Olympus officials in $1.7B fraud

Suspended sentences all around.

The Bloomberg report, Ex-Olympus Chairman Gets Suspended Sentence for Fraud, says the three senior staff charged a year ago received suspended sentences after their guilty pleas.

The individuals and their sentences:

• Chairman – Tsuyoshi Kikukawa – 3 years in jail suspended for 5 years
• Executive vice president – Hisashi Mori – 3 years in jail suspended for 5 years
• Audit officer – Hideo Yamada – 2 ½ years in jail, suspended 4 years.

Here is the article’s quote of sentencing Judge Hiroaki Saito:

“Kikukawa and Yamada succeeded in a negative legacy and weren’t involved in the decision-making process to hide losses,” Saito said in court today. “They were distressed and didn’t benefit personally from hiding losses. Mori followed their orders.”

That’s the end of the reporting. Now it’s time for an editorial.

Interpretation of the sentencing from the judge’s perspective

Let’s rephrase the judge’s comment through the lens of objectivity:

The Chairman and EVP inherited a mess which they didn’t cause from their predecessor so they had to gradually unwind the fiasco. As a result, they should not get jail time. 

The Audit officer was following his supervisor’s instructions and thus should also get only a suspended sentence.

Interpretation of the sentencing from perspective of another culture

Now I’ll rephrase the comment through my lens of being a member of American society:

The chairman and EVP, who are admitted accessories-after-the-fact, engaged in a multi-year conspiracy to cover-up a multi-billion dollar fraud by engineering a series of fraudulent transactions to slowly bury the deception inside the income statement, so they shouldn’t go to jail.

As for the audit officer, the Nuremberg defense (“I was only following orders”) is an acceptable mitigating factor in Japan, so he shouldn’t go to jail either.

Obviously, culture makes a big difference in the disposition of criminal cases. What is appropriate in one cultural context is not appropriate in another. And yes, you can tell I have a strong opinion on the sentencing.

I really hope I missed something that the article left out, but I doubt it. 

The article points out why the previous presidents couldn’t be charged:

Kishimoto and Shimoyama haven’t been charged because the statute of limitations has expired, Kyodo News reported on April 23.

Another interpretation

Let me provide another translation, this time of the defense team’s argument.

Their position, according to the article:

Lawyers for the defendants said jailing them would be unfair because other executives involved weren’t charged, the news service reported.

My interpretation as a non-attorney and parent:

Not fair! My clients got caught before the statute of limitations ran out for them. They were engaged in this fraudulent cover-up so long that their predecessors get to walk! That’s not fair!

My previous posts:

• 9-25-12 – Former president of Olympus and two others plead guilty – The above three entered guilty pleas. News reports at the time indicated possible sentences were up to 10 years in prison and US$128K fine individually and ¥700M (US$9M) for Olympus.
• 3-7-12 – Prosecutors file official charges in Olympus fiasco – Above three were officially charged along with 3 bankers.

(Hat tip: Going Concern)