• Kyodo

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The former head of an Osaka-based meatpacking company pleaded guilty Friday to swindling the government out of more than 5 billion yen through a state beef-buyback plan.

“I would like to offer my apologies for causing trouble to many people by abusing the program,” Mitsuru Asada, former chairman of Hannan Corp., told the Osaka District Court at the opening session of his trial.

Asada, considered the don of the meatpacking industry, admitted to conspiring with others to falsely label beef to qualify for government subsidies, which were introduced after the domestic outbreak of mad cow disease in September 2001. He also pleaded guilty to attempting to hide evidence.

He entered his plea reading from a paper given to him by his lawyer.

Asada, 65, is one of 26 people charged in a series of crimes stemming from abuses of the beef-buyback plan. Eleven of them — all from the meat industry in the Kansai region — appeared in court alongside Asada, and all pleaded guilty.

According to prosecutors, Asada defrauded the government out of 5.03 billion yen from November 2001 through May 2002 by falsely labeling imported beef as domestic so he could receive money for it from the government.

Prosecutors said Asada made 1.34 billion yen out of the scam.

Asada contacted the Ministry of Agriculture, Forestry and Fisheries in October 2001 asking for state aid to ease the losses he sustained from from plummeting beef sales after the discovery of the nation’s first case of bovine spongiform encephalopathy.

He used his political contacts to gather information on the government program to help BSE-affected dealers.

He had told investigators that he received a briefing on the buyback plan “from farm ministry bureaucrats.” The ministry has denied providing favors to Asada.

Asada then falsely labeled imported beef and ordered his group companies to procure imported beef, according to the prosecutors.

He applied for subsidies on some 1,700 tons of beef purchased through an Osaka prefectural meat cooperative federation, which he controlled, and through the All Japan Meat Industry Cooperative Association. Of the total amount, 434 tons were imported or were types not covered by the program.

Asada’s lawyers are arguing that the charges against their client should refer only to the beef that did not qualify for the program.

Seven of nine others who have already appeared in court have also pleaded guilty.

Asada is charged with fraudulently obtaining about a quarter of the 21 billion yen in BSE-related subsidies that the government has paid out.

Of the more than 1 billion yen in profit that he allegedly earned from the scam, Asada was earlier quoted by investigators as saying: “Part of the money was spent on supplying operational funds to group companies and loans to firms run by friends. With some of the money, I don’t recall how I spent it.”

Osaka prosecutors and police have been trying in vain to discover where the unaccounted-for money went.

The application process for the buyback plan required only proof of inventory issued by storage companies, resulting in several cases of fraud, including one involving Snow Brand Foods Co. and another with a subsidiary of Nippon Meat Packers Inc.

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