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Ex-Moritomo Gakuen boss to be investigated for alleged fraud

Kyodo

Prosecutors are set to search sites this weekend linked to the nationalist school operator at the center of a scandal tied to Prime Minister Shinzo Abe and his wife, for evidence of fraud related to subsidies for its preschool, investigative sources said Friday.

The criminal investigation into Yasunori Kagoike, 64, would come some four months after the school operator, Moritomo Gakuen, was found to have received a hefty ¥800 million ($72,800) discount on state-owned land in Osaka. The revelations fueled scrutiny of Abe and his wife, Akie, who was named honorary principal of an elementary school Kagoike planned to open on the land, and even went there to give a speech promoting Moritomo Gakuen.

In May, the prosecutors received a criminal complaint alleging that Tsukamoto Kindergarten in Osaka, run by Moritomo Gakuen, had swindled some ¥62 million in subsidies from the Osaka Prefectural Government.

They have also received a complaint alleging that Kagoike illegally won ¥56 million in subsidies to build the elementary school, which was scheduled to open i April. He is suspected of inflating the construction costs to get the subsidies.

Adding to the suspicions, three versions of the construction contract for the school listing differing cost amounts, were submitted when he applied for various subsidies.

Kagoike is also in hot water over some ¥20 million obtained from the state by allegedly padding bills for a land-cleansing project that was a prerequisite for building the elementary school.

As for the flap over the land discount, the prosecutors have received a separate criminal complaint filed against a local finance bureau official, alleging breach of trust.

The public uproar over the case resulted in the school project being suspended, and Akie Abe stepping down as honorary principal. Abe’s conservative defense minister, Tomomi Inada, has actually represented the school operator in court but denied any links to it in the Diet.

Through its own probe, the Osaka Prefectural Government found that the kindergarten unlawfully claimed ¥34.4 million in subsidies between fiscal 2011 and 2016 for such ordinary expenses as personnel and teaching materials, as well as ¥27.4 million in subsidies between fiscal 2011 and 2015 for accepting children with disabilities.

Moritomo allegedly received subsidies for ordinary expenses given on condition of staff working full-time, even though Kagoike and his wife, Junko, who was head and deputy head of the kindergarten, worked part-time. To obtain an additional ¥2.5 million in subsidies from the city, it is alleged that he falsely claimed a nursery school run by Moritomo Gakuen had full-time nutritionists. The school operator is also suspected of falsely registering a child without disabilities to obtain disability subsidies.