SENDAI – The Sendai Municipal Government intends to file a criminal complaint against the former chief director of bankrupt Touhoku Bunka Gakuen University, city officials said Sunday.
The move comes in the wake of allegations that Shoichiro Hotta, 57, submitted a window-dressed financial statement and defrauded the city out of 94 million yen in subsidies it granted to the university in fiscal 2003.
The school is currently undergoing court-mandated rehabilitation.
Police sent Hotta to prosecutors after arresting him Friday for allegedly defrauding the national government of about 575 million yen in subsidies from fiscal 1999 to fiscal 2003.
Also arrested was Tetsunari Sato, 49, the former treasurer of the university, on the same charge.
The city’s move follows a criminal complaint filed Friday by the education ministry.
According to the city’s investigation, the university applied for subsidies for such purposes as additional construction work in fiscal 2002, and attached a receipt of about 220 million yen from Nishimatsu Construction Co., a major construction firm based in Tokyo.
The city issued 94 million yen in subsidies, which amounts to one-fourth of construction and other expenses worth some 376 million yen, according to the officials.
But after the city found the receipt had been part of school construction expenses in 1999, it branded the university’s application as false.
The city also intends to file a civil suit against Hotta over the scandal.