Kagoike, his wife arrested over alleged subsidy scam

August 1, 2017

OSAKA- Japanese public prosecutors arrested Yasunori Kagoike, former head of school operator Moritomo Gakuen, and his wife on Monday on suspicion of illicitly receiving subsidies from the national government. The arrests came after the Osaka District Public Prosecutors Office conducted a second round of questioning of Kagoike, 64, and his wife, Junko, the same day, following an initial grilling on Thursday. The couple is suspected of fraudulently receiving state subsidies totaling some 56 million yen in March 2016 and February this year for a project to open an elementary school in Toyonaka, Osaka Prefecture, western Japan, by submitting falsified documents on a construction contract in the project. Moritomo Gakuen, based in the city of Osaka, came under the spotlight in February when it was revealed that the operator had bought a land plot in Toyonaka from the state at a huge discount for the elementary school project. The scandal has engulfed Prime Minister Shinzo Abe as his wife, Akie, temporarily served as honorary principal of the planned school. When he was summoned as a sworn witness to the Diet, Japan's parliament, in March, Kagoike described the huge discount as "kamikaze (divine wind)," indicating that someone close to the prime minister may have worked for the school plan. The prosecutors have been analyzing materials confiscated from locations related to Moritomo Gakuen on June 19, while gathering information from other individuals, including the couple's first daughter, who serves as head of the school operator. The June 19 raid was conducted also on suspicion of defrauding the Osaka prefectural government of some 62 million yen in subsidies for Tsukamoto Kindergarten, a Moritomo Gakuen-operated kindergarten in the city of Osaka. Kagoike, who oversaw operations at Moritomo Gakuen, is believed to have played a leading role in applying for the subsidies. His wife, who was deputy principal of the kindergarten, is also believed to have been deeply involved in managing the school operator. Kagoike has denied any role in the wrongdoings on such occasions as his appearance before the Osaka prefectural assembly as unsworn witness, while refusing to offer detailed explanations, citing the possibility of criminal prosecution. The prosecutors have accepted criminal complaints that accuse the Finance Ministry's Kinki Local Finance Bureau of selling the Toyonaka plot at unfairly low prices. They have started investigations by questioning bureau officials.Jiji Press