The director and four executives of the scandal-ridden Yasuda Hospital group were arrested July 28 on suspicion of swindling the government out of 8 million yen by filing fraudulent medical expense claims, prosecutors said.

The Osaka Prefectural Government meanwhile will deprive the group hospitals of the right to acquire public funds for medical practices. Mototaka Yasuda, 77, and the four other executives under arrest are suspected of filing claims for phony medical bills to collect public funds, according to the Osaka District Public Prosecutor’s Office.

On July 18, prosecutors and police raided the group’s three hospitals in Osaka Prefecture: Yasuda Hospital and Osaka Ensei Hospital in Sumiyoshi Ward, and Yamatogawa Hospital in Kashiwara. Investigative sources said the total of falsely claimed bills comes to 2 billion yen in the last 2 1/2 years and prosecutors are expected to probe further into the hospital group’s alleged dubious operations.

The arrest of the five hospital officials was connected to 8 million yen in public funds that the hospitals acquired between January and March 1995 by allegedly padding the number of doctors and nurses on their payrolls. According to the sources, Yasuda Hospital claimed it employed 108 nurses and that the ratio of inpatients to nurses was 4 to 1 in October 1994.

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