TOKYO – Just over two years after former Nissan boss Carlos Gon fled Japan to avoid criminal charges, a Japanese court on Thursday convicted his former U.S. deputy of helping him hide some of his compensation from regulators.
A judge sentenced Deputy Greg Kelly to six months in prison for his role in evading Mr. Gonn’s pay in one fiscal year, but released him from participating in similar efforts in other periods spanning nearly a decade. The sentence will be suspended for three years, which will effectively allow Mr Kelly to walk free. Prosecutors demanded two years.
The verdict – in fact, rejecting much of the government’s case – is likely to be the last in Japan’s long-running battle with Mr Gon, a titanic clash that many critics say illustrates serious shortcomings in Japan’s legal system.
Mr Weirham, Mr Kelly’s US lawyer, called the verdict an attempt by the Japanese government to save the person in light of the lack of evidence against his client.
In December 2019, Mr Gon fled Japan to Lebanon to avoid what he called the unjust Japanese legal system, leaving Mr Kelly behind to face what many saw as a proxy for the senior former boss of Nissan.
Mr Gon has long argued that his arrest was part of a coup by Nissan executives and top Japanese officials to prevent the carmaker from merging with French partner Renault.
Following Mr Gon’s escape, Japanese prosecutors came under strong pressure to win a conviction against Mr Kelly and to justify their decision to make arrests in one of the most notorious white-collar criminal cases in Japanese history.
The decision to detain Mr Gon and Mr Kelly at the end of 2018 was severely criticized both at home and abroad, with critics saying Japan relied on so-called hostage justice, with prosecutors try to extract confessions from detainees by holding them for long periods in inhospitable conditions without bail.
The case shocked the international business community, tarnishing Japan’s reputation among foreign leaders. This has had serious consequences for Nissan, one of Japan’s largest carmakers, struggling to recover from reputational damage and chaos among its executive ranks created by the sudden arrest of its former leader.
Updated
March 3, 2022, 4:04 p.m. ET
Prosecutors have accused Mr Kelly of helping to conceal agreements that would effectively increase Mr Gon’s already substantial compensation without sharing this information with shareholders or regulators.
In their defense, Mr Kelly’s lawyers claim that the agreements were never final and that, since Mr Gon never received the compensation in question, he was not obliged to report it.
Apart from Mr Kelly, Mr Gon has faced three additional charges, including one allegation of misappropriation of corporate funds. He denies any wrongdoing.
He fled Japan in 2019, sneaking into a private plane in a box and then flying first to Turkey and then to Lebanon. This country does not have an extradition treaty with Japan, which means that as long as he stays there, he is actually outside the scope of Japanese law.
Two Americans who helped him escape were subsequently arrested in the United States and extradited to Japan, where they were sentenced to prison for their caper roles.
Mr Gon said he had fled Japan after he was convinced the country would not give him a fair trial. He spent his time after his escape, campaigning to rehabilitate his shattered image and drawing attention to the shortcomings of the Japanese judiciary.
While Mr Kelly’s sentence determines the likely end of Japan’s criminal case against Mr Gon, the civil cases resulting from his arrest are likely to last for years.