A look back at the Olympus Affair scandal

CALIFORNIA — One of the biggest scandals of the 21^st century in Japan was the Olympus Affair of 2011, a case of accounting fraud involving the famed optical equipment manufacturer. It concerned a pattern of irregular payments by Olympus, including exorbitant brokers’ fees, for over valued acquisitions in tax free havens. The purpose of the payments was to hide massive corporate losses, in a practice known as tobashi.

To cite one example, Olympus had paid $2.2 billion to purchase a little known  medical device company named Gyrus which generated an annual revenue of only $600,000, while paying a broker’s commission of some $687 million to two little-known firms, AXES and AXAM. The figure was several multiples of the fees brokers usually charged in such cases.

Companies with links to organized crime played a role in the transactions.