Police arrested the vice chairman of the World Youth Visit Exchange Association and four executives Friday for allegedly bilking a public organization out of 12 million yen in subsidies in fiscal 2001.
Hiroki Suzuki, 67, vice chairman of the Tokyo-based group, and the other four allegedly participated in defrauding Japan Keirin Association, a bicycle racing group. The youth exchange association is chaired by former Prime Minister Yoshiro Mori.
The police have suspected the exchange association of fraud since it was established nearly 40 years ago, sources said.
The Metropolitan Police Department arrested Suzuki, a former lawyer, and the four after they admitted Friday during questioning to fraudulently obtaining the money, the police said.
Mori said in a statement that it is “regrettable” the officials were arrested.
He said he does not know the details yet because his lawyer is still looking into the case.
The arrests come after the police raided the nonprofit organization in late July on suspicion of fraudulently receiving about 270 million yen in state subsidies in the five fiscal years through fiscal 2003.
The association told police at the time that the money was used to pay operating costs as well as for wining and dining. The money has not been accounted for.
Investigative sources said the organization is also suspected of fraudulently receiving an additional 210 million yen in other forms from the state during the five-year period.
The police have searched the association’s office to check their accounting books. They have also been investigating subsidies the association received from the bicycle racing association and other public entities.
The sources said the arrested officials asked a travel agency to give them fake bills that showed higher travel expenses for students who participated in the association’s exchange programs in fiscal 2001.
They then applied for an annual subsidy from the bicycle racing association using the fake bills and received about 12 million yen, the sources said.
The exchange group was established in 1965 and became an incorporated foundation in 1969 under the education ministry, which has since become part of the Education, Culture, Sports, Science and Technology Ministry.
It sends Japanese students to foreign countries and invites foreign students to Japan through exchange programs with more than 10 countries, including the United States, Germany and China.
The association is supported mainly by public funds from the education ministry. But it also receives subsidies from other public organizations and corporations.