SFS Chapter 303 Compliance Blind Spots
Chapter 303 Compliance Blind Spots
(Sorry, I set it to be posted on a schedule, but I don't know why it didn't work.)
Abandoned shipyard of Mitsubishi Heavy Industries in Kawasaki City, Kanagawa Prefecture.
The two heavy iron doors were pushed open by several workers wearing hard hats.
The dust swirled in the thin beams of morning light, and the air was filled with a strong musty smell and the pungent odor of long-term oxidation of engine oil.
Five technical supervisors from the Saionji Information System (SIS) stood outside the gate. The supervisor in charge adjusted his rimless glasses and looked over the rusty threshold into the factory building.
Inside this sprawling, high-ceilinged factory building, thousands upon thousands of kraft paper filing boxes are stacked densely. These boxes are piled up along the load-bearing columns, almost touching the steel truss of the factory roof, forming a suffocating wall of paper.
An official from Mitsubishi's General Affairs Department emerged from the shadows behind the factory door.
"Good morning, senior supervisors of the Saionji family."
The officer stopped in front of the five people, wearing a formulaic smile, leaning slightly forward, and striking an impeccable welcoming pose.
"As instructed by Chairman Iwasaki, the Mitsubishi Group will fully cooperate with your request to establish a joint special resettlement office. In order to demonstrate our sincerity in thoroughly investigating the flow of funds, the General Affairs Department transported all the original vouchers related to personnel scheduling, logistics procurement, and outsourcing work orders from the underground warehouse of the Marunouchi headquarters over the past ten years to this location overnight."
The SIS team leader adjusted his frameless glasses and glanced at the cardboard boxes that stretched all the way to the ceiling.
"Sir, the joint supervisory team's responsibility is to oversee the flow of those 20 billion yuan in newly added special funds." The supervisor's voice was calm. "The fact that you provided old files from the past ten years seems to deviate from the focus of the investigation."
The clerk stepped aside, raised his right hand, palm up, and pointed to the mountain made of stacked file boxes inside the factory.
"Supervisor, this is precisely where Mitsubishi Group's commitment to absolute financial transparency lies."
The officer put his hands down and placed them, folded, on his abdomen.
"Your purpose in stationing us is to monitor the whereabouts of these 5,000 newly recruited workers and the implementation of their funding. To prove to you that Mitsubishi has not used this special fund to cover up past financial debts, nor has it disguised any existing employees as newly recruited unemployed workers."
He smiled and looked at the SIS supervisor.
"We need you to first establish an objective 'historical financial and personnel baseline.' Only by having everyone thoroughly verify the list of existing personnel from the past ten years and the regular procurement documents, and establishing an exclusive database, can we ensure through cross-referencing that every expenditure of the 20 billion special fund in the future is truly used for 'new' unemployment relief."
"There are 23,000 standard file boxes here, containing millions of original invoices and pay slips."
The clerk took half a step back.
"There is a compliance regulation that I need to explain to everyone in advance. This factory area was involved in the processing of heavy machinery parts for the Japan Maritime Defense Agency and is a restricted and classified area. To prevent leaks, we cut off all telephone lines and network interfaces connecting this archive to the outside world last night."
He glanced at the several black briefcases the SIS supervisor was carrying.
"All data verification must be completed within the physical boundaries of this factory. Any attempt to remove paper documents or copies from this gate will result in Mitsubishi's legal department immediately initiating charges of commercial espionage. To ensure the dignity of both parties, we request that all supervisors verify the data here themselves."
After saying that, the clerk took half a step back and made a gesture of invitation.
He stood by the door, ready to witness the expressions of despair on the faces of these auditors in their expensive suits as they faced the pile of moldy papers. At the normal pace of manual calculation, even if these five men didn't eat or drink for three years, they wouldn't be able to find the true whereabouts of those five thousand workers among those twenty thousand-plus boxes.
The SIS supervisor listened quietly to the lengthy warning about secrecy.
He nodded.
"Mitsubishi Group has stringent financial compliance requirements, and we endorse this proposal."
The supervisor spoke in a calm tone. He didn't step into the factory building, but turned around and gestured to a row of black SUVs parked outside the factory area.
The off-road convoy quickly dispersed to both sides.
Three heavy-duty vans bearing the words "SA Data" slowly reversed, their engines humming, their rear ends pointing towards the shipyard gate.
The smile on the Mitsubishi executive's face faltered slightly. He looked at the massive trucks and frowned.
Several movers in dark overalls jumped off the truck. They skillfully opened the metal barriers on the side of the truck and pushed several industrial-grade diesel generator sets with huge cooling fans to the ventilation openings.
Then, the tailgate of the truck slowly lowered.
The Mitsubishi executive stared wide-eyed.
Inside the carriages, instead of the usual tables, chairs, or shelves, there were enclosed spaces covered by all-metal anti-static panels. Inside each of the three carriages, there were two rows of black UNIX graphics workstations, two sets of local server racks with redundant arrays, and six large, American-made high-speed roller scanners with gleaming metallic casings.
The SIS supervisor walked to the tailgate of the truck and patted the cold metal cargo box.
"Sir, since Mitsubishi has emphasized that the data must not leave the country, we have specifically brought in this regional network mobile data center."
The supervisor turned his head and looked at the clerk whose face was stiff.
"This system removes all external communication modules and radio transmitters, retaining only the LAN data exchange function. Data only flows on the local hard drive, perfectly meeting your physical isolation requirements."
The clerk's lips twitched slightly.
"As expected of the Saionji family, their preparations are truly thorough." The secretary bowed slightly, his tone even revealing a hint of admiration. "However, as the assisting party, I still have an obligation to offer a reminder."
The officer pointed to the nearest cardboard box.
"The slips in these tens of thousands of boxes are mostly handwritten notes from ten years ago by long-time employees. Many of the papers are yellowed and brittle, and some even have mold spots. We hope that your advanced machines can successfully read those old ink marks."
He politely stepped back half a step, making room for him.
"If, after the trial, any supervisors still require manual review, please feel free to let us know. Mitsubishi will provide you with the most adequate lighting equipment and safety goggles."
In the mind of this Mitsubishi general affairs department staff member, current scanning technology is simply incapable of recognizing those illegible and water-stained old-fashioned Japanese kanji characters. The machine would only produce a bunch of blurry, unusable photos.
All he had to do was stand aside, maintain a cooperative posture, and watch as the Saionji family members collapsed in front of the screen in the face of garbled text, eventually having to manually flip through those scraps of paper again.
The supervisor did not respond to the officer's "good intentions." He raised his hand and gave instructions to the technicians behind him.
The diesel generator set ignited, and a deep roar reverberated throughout the empty factory area.
Two technicians strode into the factory and used a utility knife to cut open the outermost cardboard box. They grabbed a stack of personnel files with yellowed and curled edges, brushed off the dust, and stuffed them directly into the paper tray of the high-speed roller scanner in carriage number one.
The technician tapped a few keys on the mechanical keyboard of the UNIX workstation and pressed the Enter key.
The Mitsubishi executive stared at the CRT screen inside the carriage, trying to find a flaw in the other party's operation.
He saw yellowed forms, scanned into digital images, flashing rapidly across the screen. The handwriting on those forms was illegible, and in some places, the ink had even smudged into black blobs.
However, the image on the screen remained for less than 0.1 seconds.
Immediately afterwards, a code execution window with a completely black background popped up on another monitor on the right side of the workstation. Lines of green numbers began to refresh downwards like a waterfall.
As the code runs, a clean spreadsheet is generated at the bottom of the screen.
[Name field: Unrecognized] [Department field: Unrecognized]
[Funds Flow: 2,500,000 JPY] [Account Number Ending in: 4458]
The officer's breathing stopped.
How could the numbers be extracted? The numbers were clearly mixed in with the handwritten Chinese characters in the same frame.
He quickly adjusted the slightly stiff muscles in his face and put on a polite smile again.
"The equipment at the Saionji family is truly eye-opening." The secretary bowed slightly, his tone filled with admiration. "As far as I know, even the most advanced image recognition technology seems to struggle to separate numbers so accurately from old, water-stained handwritten Chinese characters. I wonder what kind of advanced recognition algorithm you use? It's truly an eye-opener for us."
The supervisor looked up from the screen and at the staff member, speaking in a flat tone.
"This is a core internal secret of Saionji's intelligence system. I apologize, sir."
The person in charge could only sneer.
In fact, the successful data extraction was thanks to Mitsubishi's rigorous bureaucratic system.
For the past ten years, the "Financial Expenditure Form No. 4A" and "Personnel Scheduling Form No. 7B" that they have been using have remained unchanged, with no alterations whatsoever to the size of the borders, the position of the tables, or even the spacing of the margins.
Based on this rigid physical layout, the underlying scraping script skipped over the handwritten notes. The program only locked onto the pixel block at a specific coordinate point of 150 on the X-axis and 300 on the Y-axis for each scanned image. That was exactly the 2x4 cm square where Mitsubishi had fixedly filled in the financial statements and bank numbers.
The batch data scraping based on fixed coordinates rendered the paper maze that the project manager was so proud of useless. The program didn't need to know the specifics of the list. It only needed to extract the core elements from each of the 20,000 boxes and hand them over to the backend server.
These ten truckloads of waste paper will be transformed into a vast and clear "historical exclusive database" within 48 hours.
Once this baseline is established, every name of a newly recruited worker and every purchase invoice submitted by the Mitsubishi Group for the 20 billion yen special fund will be cross-referenced in this database in real time.
If even one old invoice, duplicated, appears on the list of 5,000 people, the Saionji family can use this data to directly accuse Mitsubishi of using outdated records to impersonate unemployed workers, involving a 20 billion yen accounting fraud.
Rigid bureaucratic forms became the breakthrough point that shattered the defenses.
As the secretary watched the total amount on the screen increase, his legs felt slightly weak.
Are these people really going to see all of this data? No... wait, can all of this data be leaked?
"Thank you for providing such complete original documentation."
The supervisor looked at the ashen-faced staff member.
"Ten truckloads of inventory. The joint working group will complete the full audit within forty-eight hours." The supervisor pointed to the roaring diesel generator set next to the truck bed. "During the audit, please ensure Mitsubishi has a sufficient supply of diesel fuel and prevent the machine from stopping."
……
Vice President Kagawa stopped outside the half-closed blinds of a document room.
Fuji Bank Akasaka Branch, second floor corridor.
Kagawa pressed his body against the wall, peering into the document room through the slightly tilted gaps in the blinds.
There was only one finance department employee in the room. The employee had unbuttoned two buttons on his shirt, his tie was askew, and his forehead was covered in fine beads of sweat.
He was sitting in front of an old-fashioned English typewriter, his fingers rapidly and forcefully striking the metal keys.
"Click, click, click..."
The crisp sound of mechanical knocking was particularly jarring in the quiet room.
Kagawa's gaze passed over the employee's shoulder and locked onto the piece of paper clipped to the typewriter roller.
It was a fixed deposit certificate with the Fuji Bank logo printed on it.
As the rollers rotated, a clear string of black ink numerals was printed on the denomination column: 5,000,000,000 JPY.
Five billion yen.
Kagawa's eye twitched slightly.
It's actually true... How did the young lady know about this...?
After Kagawa gained the board's trust, Satsuki sent a letter through a messenger to congratulate him on his "further advancement." She also casually gave him an instruction—to go to the Akasaka branch, where someone was forging false deposit slips, and to assist him.
The typing stopped.
The clerk let out a long breath, turned the roller to remove the paper, and laid the triplicate form flat on the table.
The employee tore off the top "Customer Retention Copy" and set it aside. Then, he picked up the "Data Center Copy" and "Branch Receipt Copy" below, which were used for entering data into the clearing host, turned around, and stuffed these two internal vouchers, which should have been submitted to the back office for accounting, into the shredder in the corner.
Accompanied by the dull chewing sound of the paper shredder, the physical record of this five billion yuan deposit being entered into the bank was cut into a pile of scrap paper.
The employee returned to his seat. He pulled a heavy brass seal box from deep within the drawer. Kagawa recognized the design; it was a high-level authorized seal that only branch managers were qualified to possess.
He then pressed the seal into the red inkpad and stamped it heavily in the lower right corner of the "Customer Retention Copy".
The deposit slip is printed on genuine anti-counterfeiting paper and bears the genuine seal of the branch manager. Even if this deposit slip were handed over to an external non-bank financial institution (such as a real estate agency), their legal department auditors would not be able to find any flaws even with a magnifying glass.
Kagawa watched silently from the corridor.
After the Ministry of Finance issued its loan cutoff order, small and medium-sized real estate developers outside the region were willing to pay extremely high interest rates to secure loans. This employee forged a 5 billion yen fixed deposit certificate and gave it to an external client. This client could then use the certificate as collateral at non-bank financial institutions (such as housing investment banks) to fraudulently obtain huge loans.
This fabricated 5 billion yen never entered Fuji Bank's clearing system and remained completely outside the head office's monitoring scope.
As long as the customer repays the money within the deadline, the employee can extract a huge kickback and then quietly destroy the fake deposit certificate without anyone noticing.
Kagawa stood there, quietly watching the employee stuff the fake deposit slip into his briefcase.
According to the bank's compliance procedures, he should immediately push open the door, call the security personnel downstairs to pin the fraudulent employee to the ground, and then hand him over to the judicial authorities.
But Kagawa did not move.
He recalled the 7.5 billion yen promissory note that Executive Director Endo had pushed in front of him in that private meeting room at the S-Palace Hotel, and the agreement he had personally signed that betrayed the bank's secrets.
He has no way back now. Those old guys on the board of directors at headquarters will push him out as a scapegoat at the slightest sign of trouble.
He needs a nuclear bomb that can destroy Fuji Bank at any time and force the board of directors to beg for mercy.
The low-level employee in front of us, who forged deposit certificates out of greed, is a ready-made fuse. A hole of 5 billion yen is not fatal in the face of the massive Fuji Bank. This malignant tumor needs time to grow, needs a safe breeding ground, to expand to a scale of 100 billion or 200 billion yen.
Kagawa didn't push the door open, but took half a step back and left the Akasaka branch via the staff staircase.
……
Fuji Bank Headquarters, Vice President's Independent Office.
Kagawa sat behind his large desk. He removed the cap from his fountain pen and pressed the nib above the Akasaka branch section of the "Internal Inspection and Physical Seal Inventory Plan of the Entire Bank".
As the newly appointed "Head of the Internal Risk Investigation Team" by the head office, he has the final approval authority to review the audit schedules of all branches.
The pen drew a distinct circle next to the text "Akasaka Branch, Financing Department".
Then, Kagawa wrote a note in the blank space at the bottom of the table:
[This branch has recently demonstrated excellent business performance and sound internal risk control. Following a decision by the investigation team, it has been exempted from the head office's surprise vault inspection and physical seal verification this quarter.]
After writing the last word, Kagawa put down his pen. He opened the drawer and took out the red seal that represented the authority of the deputy bank manager.
At the end of that annotation, he stamped his seal.
From this moment on, the Akasaka branch became a lawless enclave.
That employee will completely lose all physical supervision and surprise inspections from head office in the coming months.
He could recklessly pound on that old typewriter and drag Fuji Bank into the abyss.