The Truth Behind Emi Fukada's Tax Evasion Scandal (Part 1)

Translated from an article first published online by 現代ビジネス編集部

In February this year, JAV talent Eimi Fukada, who has more than 13 million followers on various social media outlets, made headlines when it was reported that she had been penalized with 80 million yen (USD600,000) in additional taxes from the Tokyo Regional Tax Bureau. Fukada herself acknowledged the penalty during a (now deleted) YouTube upload in April, confessed and elaborated upon the circumstances. In the video, she expressed feeling "disregarded "and "betrayed" after she had been informed by her management that they had indeed previously filed her taxes and she lay the fault solely the owner of her former agency.

Now, let's put everything in context with some background.

What happened was after being approached for an interview by The Weekly FLASH, a person who claims himself as "an acquaintance of Fukada in the know" testify upon the following

'It's true that Fukada had been assigned to a new agency. However, she had been penalized with 80 million yen (USD600,000 in 2022) in additional taxes over her salary from her previous management. During her time in her previous agency, her monthly payout was about 2 million yen (Approx USD12,000 in 2019-2020) with her annual income totaled some 24 million yen (Approx USD144,000 in 2019-2020). Her accumulated income during her 7 years with the old management was more than 150 million yen (Approx USD 1,170,000 in 2023). But this was never declared and hence, the penalty for what technically counts as tax evasion.'

'Fukada was informed by her former management that her taxes were being handled properly. But, however, it appears that the firm had not kept up with its promises, and so Fukada and the company were subjected to an investigation by the bureau. And here we are, with the owner on the run and the agency effectively dissolved.'

The above essentially sums up the FLASH exposé. The article also points out that Fukada's savings amounting some approximately 20 million yen (USD 156,000 in 2023) at the start of the investigation which dwindled to almost nothing in April 2023 and that she is currently struggling to pay off everything.

Soon after, Fukada responded and clarified on X in a now deleted post that she was indeed under Forty Four Management, stating one Kenichi Yoshida by name as the overall in charge, implying she had issues with how things were run. And pointing out after she had been transferred to Mines, a rival agency, everything had been smooth sailing.

Then, in a video collaboration on YouTube with popular YouTuber Plotan, which was also uploaded in April, she said:

'The (tax evasion) incident happened a year back. While I had been trying to cover it up all along, I guess it's time to do some explanation.'

After confessing to that she had indeed been penalized. Fukada mentioned that as her wages had been paid correctly on time and that the former agency had assured her that her taxes had been submitted accordingly, the fact that tax investigators still arrivied knocking unexpectedly at her door came as a shock.

(ZENRA admin note: in Japan there are two types of audits the tax office will carry out: "voluntary" and "involuntary". "Voluntary" audits are extremely common to the point where most self-employed/company owners will experience a few over their lives. It usually starts with a phone call from the tax office explaining they wish to perform on and they come at a time convenient for everyone. If you report and record income and expenses and thus pay your taxes properly, there is nothing to worry about. On the flip side, "involuntary" audits are what most assume when one hears "tax audit"; no notification, just a sudden hard knock on the door by tax office employees ready to look into books whether or not one made preparations. If the latter happened to Eimi, they probably already had enough evidence on hand that things were very wrong when it comes to her income reporting history.)

'That moment, when the tax inspector materialized and rang my doorbell, I was traumatized and in tears. And I kept receiving calls from unknown numbers on my phone.'

At least this was how things were according to her.

But is this really the whole truth? We, the Gendai Business editorial team, tracked down and interviewed the Kenichi Yoshida (52) who was, of course, the owner of the troubled, now defunct, agency Forty Four Management in May at varied locations across Tokyo for this two-part exclusive to get his perspective. Yoshida revealed details, as an insider, on the payments made to Fukada and how things usually works. Everything we learn from the three hour long interview is in stark contrast to Fukada's version of events.

'Look at how's she's all humbled saying "I really have no relation or dealings with my previous management ", seems she's truly believed that she had seen the last of me, her former boss, eh?'

'I like to think she thought of me as an adoptive parent. Though with financial incentives getting involved I can never truly be a second dad to her. But there's no denying that there were some paternal feelings, and it really hurts to know that everything's gone now, that traitor.'

What Yoshida is referring to is that now-deleted video, in which Fukada put the charge of tax evasion solely on the negligence of her former agency. Those accusations against her old management were picked up by online outlets, and from there to the ears of industry personnel's and soon, the general public. Thus, damaging the reputation of Yoshida.

A summary of the detailed account provided by him for this exchange is as follows

─ ─ First of all, please elaborate upon your relationship with Fukada right from the beginning, starting from the establishment of your company.

'I, being a financial consultant by trade, established the company in 2015, and we were a complete newcomer in the JAV industry when it's already overflowing with much more well-established firms. As fate will have it, I had been introduced to a girl who had been moonlighting as an idol under Yellow Cab by another JAV agency. Somehow things didn't plan out with that agency, so I took the girl on under my start-up.'

'She, as the future Fukada, came in about a year after the founding of the company. We debuted her in '16 as Kokoro Amami, giving her the background as a member of the underground idol group B Shoujo Senshi Go Fighter. That was the idea of one of my juniors, something that he had come up with specially for her in preparation for her JAV debut.'

'As per what was scheduled, the girl left the group after a few months and make her appearance in JAV as Kokoro Amami, now an ex-underground idol. I budgeted some 800,000 yen (Approx USD 7600 in 2016) for her, spreading across 3 to 4 titles. Things didn't take root, however. But the girl now had some ideas of her own, she declares that she will take on another persona. Using her own savings in combination with funds from me as capital, she will overhaul her boobs, face, everything, completely remaking herself. That's how 'Eimi Fukada' came about. The way she carries herself at that moment leaves quite an impression, swearing that "You will definitely make your returns and more from me.", not something you see in other girls.'

'After her re-launch in 2018, I didn't managed to get any studio exclusivity contract for her initially. What I got her were a couple of budget friendly freelance gig to start her off. 3 of those if memory serves, and one of them turns out to be her breakout title.'

'From there, request for Fukada came flooding in. There was that period I managed to negotiate a fee of 600,000 yen (USD 5500 in 2019) per appearance on a title with various studios. During her peak, Fukada landed an exclusivity contract with a major JAV studio, one of them DMM-affiliated. What they propose is a one-year contract offering 700,000 in yen (Approx USD 6100 in 2021) per title, 12 titles per month, making a total of 144 films for that year. Resulting in a payout of 100,800,000 yen (Approx USD 880,000 in 2021) annually. An obscene amount, unheard of in the industry.'

'As one might expect from those contractual terms, Fukada suffered a burnout physically before the year was up. In accordance with her wishes, I re-negotiated with the studio after the contractual period is up and had the terms of extension of the contract modified to a payout of 5.5 million yen (Approx USD 40,000 in 2022) for a title per month in exchange for her to bow out of JAV after the new contracted year is up.'

'Looking back, what was given to her could be second or even comparable to what Yua Mikami was earning, which was of course top dollars during that era in the industry. With that amount, she was literally printing out doughs for us at the back office. Making us amongst the top 5 agency during that period, enabling us to contract 30 other girls under us. That's something to be proud of. And we have to thank her for that.'

--When did she start to go out of line?

'Fukada did not cause much trouble initially. But that changed not too long after. She starts to skip scheduled filming without prior notifications, ruining 10s of sets with just a lighthearted laugh. Every time she does that, we as her management had to compensate some 300,000 (Approx USD 2200 in 2022) to 1 million yen (Approx USD 7300 in 2022) back towards the studios for what they had invested towards productions and intended expenditure for each one of those set. You can say perhaps her head had swelled due to her newfound fame as a prima donna'

'We did caution her over this. But given the unpredictability of our trade, we cannot be too confrontational towards her. What if she quits out of spite? Or worse, poached by other players over more favorable terms.'

--So just how did Fukada emerged as a huge social media personality on YouTube and Instagram?

'Well, we outsourced her to CyberAgent Inc for the creation of her YouTube Channel with them sparing no expense., and the response in return was as good as one might expect.

'Just when I thought everything's going smoothly, sometime around 2020, Yuki Iida, the (now resigned) CEO of the video streaming company LIVER, poached Fukada the YouTuber over, just when Fukada had begun to take over the running of her channel herself. Best of all, that girl only informs me of what happened after the finalization of their contract. I voiced my displeasure to Iida with through a mutual acquaintance, and all he could say was "She made that first move". Did I managed to get more out of him at the end? Not with the way Iida keeps avoiding me. In any case, that's how all the effort invested with CyberAgent falls to ruins.'

'Anyway, the agency chooses not to break contract with Fukada over the matter. What I foresee was that possibility of Fukada's popularity exploding over her YouTube channel. Don't think I had much of a choice but to tolerate her and accept everything with a "give-and-take" attitude.'

'So, you probably see how things are now, with Fukada having two main sources of income. The earnings from JAV actings with some other gigs arranged by us at the agency, and the streams from YouTube of which we had a totally hands off approach.'

--And that's how things were until the Tax Agency raid.

'Correct, which bring things to December 2022. We got burnt along with Fukada when the taxman came calling. They were thorough with their job that day, taking every and all documents relating to our payrolls of Fukada and the 30 other girls under us after ransacking through everything. Though I suspect they were only interested in Fukada, due to how she stands out in both JAV and other media outlets, being a more prominent figure.

--You heard about Fukada saying that she was informed that her management will file taxes on her behalf. Just how were the matters regarding tax explained to her from the beginning?

'No such promise were made. When her contract was minted, I stated to Fukada outright that she is not an employee of the agency, just a contractor and it is her and her responsibility alone to file her tax returns correctly. The same goes for the other girls. We do not have an obligation to make an exception only for her. Here, take a look at this Line exchange where Fukada had the cheek asking me to cook the books for her.'

Next up, just how Emi Fukada, the JAV diva commanding 5.5 million yen (Approx USD 40,000 in 2022) for a single title managed to conjure up 2 different accounts for her taxes out of thin air? We have her former boss reveal all the facts with evidence provided to expose how everything can and will happen in the JAV industry.