Japan's recession-hit gangsters are claiming millions of pounds in unemployment and other benefits despite a ban on members of crime syndicates receiving welfare.

Scores of cases of suspected benefit fraud have been reported since March 2006, when the health and welfare ministry banned such payments to the estimated 80,000 members of Japan's mafia, known as the yakuza, the Yomiuri newspaper reported.

Of the estimated 400m yen (£3m) paid out, only a fraction – 15m yen – has been recovered, although just under half the local governments surveyed by the newspaper said they had ceased payments after learning of the claimants' underworld origins.

The actual figure could be more than 500m yen, the Yomiuri said.

Gangsters who have fallen on hard times or simply want to boost their income are using a variety of ruses to receive unemployment, housing and other benefits.

In one case, a claimant presented a fake letter stating he had been expelled from his organisation and was therefore entitled to assistance.

The widespread fraud is taking place against a backdrop of mounting financial pressures on the yakuza as the global financial crisis forces them to compete for dwindling spoils.

The recession has dramatically reduced income from property, construction and the stock market, at the same time as tougher laws have hit more traditional cash cows such as prostitution and loan sharking.

Now that yakuza dons can be sued in court for the misdemeanours of their henchmen, many gangs are conducting purges of more volatile operatives.

While excommunicated mobsters have a legitimate right to claim welfare, active yakuza are well placed to play the system, say experts.

"If they declare no income and pay no taxes, it's very easy to pretend that they qualify for welfare," says Jake Adelstein, a leading authority on the Japanese underworld.

"It's easy if they're heavily tattooed, but if you're talking about white-collar yakuza, who turn up in a suit and don't look shabby, then how are they going to be found out?

"Some yakuza are having trouble making enough money these days, and few can claim to have a regular income. The people they used to shake down for protection money can no longer afford to pay up, and money-lending rackets are easier to uncover and come with heavier penalties."

The welfare ministry admitted it had yet to gauge the true extent of the fraud.

"It's very difficult to say exactly how big the problem is as we don't have reliable data," a ministry official, who asked not to be named, told the Guardian.

"We've strengthened our cooperation with the police in recent years, but there are no special measures in place. It is already against the law for gang members to receive welfare, and those that do receive money are legally required to pay it back."