The Tokyo District Court sentenced former Labor Minister Toshio Yamaguchi to four years in prison Thursday in connection with illicit loans involving two failed Tokyo credit unions.

Presiding Judge Hiromichi Inoue convicted Yamaguchi, 59, of breach of trust, embezzlement, fraud and perjury.

Yamaguchi appealed the decision to a higher court later in the day.

According to the court, Yamaguchi committed breach of trust by arranging some 2.7 billion yen in illegal loans from Tokyo Kyowa Shinyo Kumiai and Anzen Shinyo Kumiai for a golf course developer operated by his sister, Yoshie Yamaguchi, 64, between June and December 1994, with little prospect for repayment.

He conspired with her and Harunori Takahashi, former president of Tokyo Kyowa, and the loans soon became irrecoverable, causing massive losses to the two now-defunct credit co-operatives, the court said.

Yamaguchi used assets belonging to the Leisure, Welfare and Culture Foundation, a nonprofit organization for which he was a board member, as collateral to obtain 180 million yen in loans from Tokyo Kyowa for a firm run by a relative, and used land held by the Musashino Welfare and Culture Foundation, another public body, to borrow 200 million yen from Tokyo Kyowa for another company with links to his family, it said.

The court said Yamaguchi falsely testified before the Lower House Budget Committee in June 1995 that his brother, Katsuto Nemoto, had used the foundations for collateral without his knowledge.

Yamaguchi also swindled Kumamoto Institute of Technology out of about 170 million yen in connection with his failed plan to establish a university in the United States, the court said.

Prosecutors had demanded a six-year sentence for Yamaguchi, who served as labor minister from 1984 to 1985 in the Cabinet of Prime Minister Yasuhiro Nakasone.

Yamaguchi maintained his innocence throughout his trial, claiming his relatives and aides were involved without his knowledge.

He claimed prosecutors had framed him and falsely made him part of the conspiracy.

Eleven people, including Yamaguchi's sister, brother, secretaries and Takahashi, have been convicted in connection with the scandal.

Three secretaries, who received suspended terms in 1996 for their role in the conspiracy, told the court that Yamaguchi was to blame, claiming they had to obey his orders like "robots."

Meanwhile, Yamaguchi's sister and 56-year-old brother have denied he was involved, claiming they were responsible for running their business and only sought advice from the lawmaker.

His sister has filed an appeal with the Supreme Court, while his brother's conviction has been finalized.

Takahashi, with whom Yamaguchi had close personal ties, said at the beginning of the trial that he had been approached by the lawmaker to arrange illegal loans for his family business. However, Takahashi later denied his own involvement in the conspiracy.

The Tokyo District Court sentenced Takahashi to 4 1/2 years in prison in October. He has filed an appeal.

While denying any wrongdoing, Yamaguchi also told the court that he was sorry for consulting with his sister on business matters without seriously considering his position as a politician.

Yamaguchi won 10 straight terms in the Diet from a Saitama Prefecture constituency. He was first elected to the Lower House in 1967.

Formerly with the Liberal Democratic Party, he changed parties several times during his career and held a key post at Shinshinto, the main opposition party, when he was arrested in 1995.

"He was a very active man," said Satsuki Eda, of the Democratic Party of Japan, who was also a member of Shinshinto. "We were able to tell which direction politics were going just by watching his moves."

While some politicians who knew Yamaguchi lamented the verdict, most have shown less concern.

"I think he was only interested in the game of politics," a Lower House LDP member said.

"Even after Yamaguchi's arrest, the tendency (for politicians) to make money using their political power is still in the air," said Zenmei Matsumoto, of the Japanese Communist Party. "I think the conviction was just, and we need to use this to reform the political world."

Voters in the city of Higashi-Matsuyama, Saitama Prefecture, Yamaguchi's election base, also showed a lack of concern for their former representative.

"I think he became blind and ruined himself with his greed," said a 47-year-old man who said he used to support Yamaguchi.