KOBE – Five former officials of the now-defunct Snow Brand Foods Co. were given suspended two-year prison terms Friday for defrauding the government beef-buyback program introduced after the mad cow disease outbreak last year.
The five had all pleaded guilty in the Kobe District Court to defrauding 196 million yen from the industry body Japan Ham & Sausage Processors Cooperative Association, by repackaging imported beef as domestic to receive government subsidies under the buyback program.
The two-year sentences were suspended for three years. Prosecutors had sought two-year terms for all five, who were arrested May 10 and indicted May 30.
It was the first ruling on a spate of beef-mislabeling scams involving several firms in the meat industry, including Nippon Meat Packers Inc. and Nippon Shokuhin Co.
Presiding Judge Akiyoshi Sasano said the five had conspired with two senior executives of the company, who have pleaded not guilty and are being tried separately.
The five receiving the suspended sentences are Shigeru Hatakeyama, 56, head of Snow Brand Foods’ meat sales and procurement division; Masao Hirose, 55, chief of the firm’s processed meat section; Shizuo Sugiyama, 51, a section chief in Hatakeyama’s division; Tetsuaki Sugawara, 48, head of the company’s Kansai Meat Center in Itami, Hyogo Prefecture; and Yusuke Tasaki, 56, who headed the company’s Kanto Meat Center in Kasukabe, Saitama Prefecture.
The court said the five conspired with Hiromi Sakurada, 61, a senior managing director, and Masami Inoue, 60, to falsely label some 30 tons of imported beef products as domestic in October and November 2001 and swindled the Tokyo-based industry body out of 196 million yen in the buyback program in January.
Sakurada and Inoue have both pleaded not guilty.
The court said the five plotted the fraud because beef stocks mounted after consumption plunged following the outbreak of mad cow disease in domestic cattle in September 2001.
Judge Sasano described their act as a “vicious crime that abused (the subsidy program) and betrayed people’s trust,” but added the five have expressed sincere remorse and have already been “socially punished” by being fired by the company.
Sasano also pointed out that it has been a long-standing practice in the meat industry to falsify product information, including product-origin labeling.
The fraud — at the company’s meat sales and procurement division, the Kansai Meat Center and Kanto Meat Center — was prompted by the introduction of the beef-buyback program, which was designed to purchase domestic beef from distributors hit by slumping sales as consumers shunned beef. It did not cover imported beef.
The Japan Ham & Sausage Processors Cooperative Association purchased some 280 tons of beef from Snow Brand Foods, including 30 tons falsely labeled as domestic.
The five initially told investigators they acted on their own but later admitted higher-level executives of the firm were involved.
Snow Brand Foods, a subsidiary of Snow Brand Milk Products Co., dissolved itself on April 30 after its sales plunged sharply as supermarkets nationwide pulled its products from shelves.
According to a member of the Snow Brand Foods labor union, about 20 percent of the former workers have yet to find new jobs, and many of those in their 40s and 50s have had to work for wages even lower than employment insurance benefits.
“Considering the social impact the incident has had, I wonder if a suspended sentence was appropriate,” said Muneo Yoshimura, a 49-year-old member of the Snow Brand Foods union.
Commenting on the ruling, Tadaaki Konose, president of Snow Brand Milk Products, said: “It was an illegal and inexcusable act that inflicted tremendous damages on us, and we have to take the ruling very gravely.”
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