KOBE — Five former executives of Snow Brand Foods Co. were arrested Friday on suspicion of defrauding an industry body out of 196 million yen by mislabeling beef.
Among those named were Shigeru Hatakeyama, 55, former head of the company’s meat sales and procurement division, and Tetsuaki Sugawara, 47, who headed the company’s Kansai Meat Center in Hyogo Prefecture.
The others were Masao Hirose, 54, former head of the firm’s processed meat section; Shizuo Sugiyama, 51, a former chief of the meat procurement division at the firm’s headquarters; and Yusuke Tazaki, 56, former head of the Kanto Meat Center.
All five were dismissed in March by the company, a subsidiary of Snow Brand Milk Products Co. after the scam was uncovered.
The company reportedly passed off Australian and American beef as Japanese meat to obtain subsidies under a government buyback program.
The program was introduced in the wake of the September outbreak of mad cow disease.
Investigators also searched the headquarters of Snow Brand Foods in Chuo Ward, Tokyo, as well as the homes of Hatakeyama, Hirose and Sugawara, in connection with the alleged fraud, police said.
The company disbanded April 30, and its remaining staff members are engaged in liquidation proceedings.
According to investigators, the five conspired to falsely label some 30 tons of imported beef products as domestic in October and November, swindling the industry body out of 196 million yen in the buyback program in January.
The industry body, the Japan Ham & Sausage Processors Cooperative Association, purchased some 280 tons of beef from Snow Brand Foods, including the 30 tons falsely labeled as domestic.
Under the buyback program, various private industry bodies were in charge of buying beef on behalf of the government, which paid them subsidies.
Immediately after the scandal came to light Jan. 23, the company denied that there was any indication of systematic fraud.
Investigators revealed, however, that Hatakeyama and other company officials had secretly contacted each other before the firm applied for the subsidy program.
Police are continuing investigations and suspect more than a dozen other officials of the firm were involved in the fraud.
A case may also be filed against the company for violating the Food Sanitation Law by falsifying the origin of its meat products, the sources said.
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