Tadao Koseki, former president of mutual aid foundation KSD, pleaded guilty Tuesday to embezzling about 81 million yen from the organization and to breach of trust that caused it to incur losses of 168 million yen.

Two other former KSD executives also admitted conspiring with Koseki — one of them, his son, on the breach of trust charge and the other on the embezzlement case.

In his first trial hearing before the Tokyo District Court, the 80-year-old KSD founder admitted he embezzled 80.95 million yen by funneling KSD funds to a female friend.

He also admitted to committing breach of trust by forcing a KSD affiliate to buy music compact discs with 168 million yen in KSD funds.

Koseki has also been charged with bribing two former Liberal Democratic Party lawmakers — Masakuni Murakami, 68, and Takao Koyama, 57 — to gain favors for KSD and its affiliates. The three will be tried for bribery by the same court.

Appearing before the court in a gray suit, Koseki apologized to KSD members and employees for damaging the organization’s reputation, which they worked for years to build up.

“I sincerely feel my grave responsibility, and deeply, deeply apologize to them,” he said.

In the hearing, Koseki’s 40-year-old son, Kimiyasu — KSD’s former senior managing director — pleaded guilty to conspiring with Koseki in the breach of trust.

Former Managing Director Hiroyoshi Yamada, 58, admitted conspiring with the elder Koseki in the embezzlement, but denied being involved in the breach of trust. His lawyer said it was difficult for Yamada to stop Koseki.

But prosecutors claim Yamada, along with the younger Koseki, were aware of but did not try to prevent the CD purchases because they wanted to protect their positions.

In their opening statement, prosecutors said the elder Koseki withdrew a total of 80.95 million yen in KSD funds on 81 occasions between 1994 and last year to cover the expenses of a woman with whom he was having an affair.

Yamada was aware of the embezzlement, but did not try to stop him for fear of incurring Koseki’s displeasure, prosecutors said.

Koseki also caused the organization to suffer losses of 168 million yen by forcing it to buy around 150,000 CDs between 1998 and 2000 through the affiliate KSD Homeikai, which provides a welfare service to KSD members, they said.

The CDs, featuring a female singer who appears in KSD ads, were then given away to KSD members, while thousands of leftover CDs were dumped, prosecutors said.

Koseki has also been charged with paying about 22.88 million yen in bribes to former Labor Minister Murakami in 1996 in his bid to secure government approval for the establishment of the Institute of Technologists in Saitama Prefecture.

The four-year private college, the brainchild of Koseki, received its first students last month.

He is also charged with giving about 11.66 million yen in bribes to former Upper House member Koyama in 1995 and 1996 to win the lawmaker’s favor for the institute and another organization that accepts foreign trainees under the state-run Foreigners’ Trainee System. Koseki also headed that organization at the time.

It is also believed Koseki provided bribes of 50 million yen to Murakami and 20 million yen to Koyama, but the statue of limitations on these allegations have expired.

KSD reportedly donated at least 1.7 billion yen to the LDP and its lawmakers in recent decades through various channels.

The former president is also suspected of falsely registering its members to the LDP’s list of rank-and-file members to make it easier for Murakami and Koyama to be elected through proportional representation in Upper House elections.

But prosecutors dropped this case, due to difficulties in presenting evidence.

Koseki resigned as president of KSD, which provides accident insurance to small enterprises, on Oct. 6.

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