• Kyodo

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Police arrested two former executives of Snow Brand Foods Co. on Saturday on suspicion of defrauding an industry body out of 196 million yen by falsely labeling beef to receive compensation for the outbreak of mad cow disease.

Hiromi Sakurada, 61, former senior managing director and head of the company’s meat department, and Masami Inoue, 60, a managing director, are suspected of complicity in the fraud along with five other executives who were arrested on May 10, the police said.

According to police, Sakurada and Inoue are suspected of falsely labeling some 30 tons of imported beef products as domestic beef in October and November last year after imported beef sales plunged following the outbreak of mad cow disease, swindling the industry body out of 196 million yen in a government buyback scheme in January.

The industry body, the Japan Ham & Sausage Processors Cooperative Association, purchased 280 tons of beef from Snow Brand Foods, including the 30 tons falsely labeled as domestic beef.

Under the buyback scheme, introduced following the discovery of mad cow disease in Japan last September, various private industry bodies were in charge of buying beef on behalf of the government, which paid them subsidies.

The company, a subsidiary of Snow Brand Milk Products Co., disbanded on April 30.

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