OSAKA (Kyodo) Prosecutors on Wednesday indicted 10 people for allegedly evading ¥645 million in postal fees by abusing a discount system for handicapped people when sending millions of fliers for major electronics discount store operator Best Denki Co.

Among the 10 are Toshiharu Kubo, 51, former sales promotion manager at Best Denki, whose case was sent to the Osaka Summary Court, and Kazuyoshi Wakabayashi, 57, former chairman of printing company Wellco Corp. whose case was sent to the Osaka District Court.

Wakabayashi has said he was “not aware of the illegality (of sending the fliers for lower fees) because the postal company (Japan Post Service Co.) accepted the mail,” according to the Osaka District Public Prosecutors Office’s special investigation squad.

Under the discount scheme for handicapped people, mail charges are sharply discounted to around 8 yen per mail item instead of the regular fee of 120 yen. Using the scheme requires approval from the postal company.

Meanwhile, the prosecutors plan to serve a fresh arrest warrant soon on Wakabayashi and others over their suspected involvement in illegally sending mail fliers for a Tokyo company that sells health foods via mail-order, investigative sources said.

According to the written indictment, the 10 people abused the discount system to send a total of 5.7 million Best Denki fliers between February 2007 and February 2008.

The investigative sources said Best Denki actually sent nearly 12 million fliers by abusing the system between around August 2005 and February 2008. The illegal practice ceased after Kubo was transferred to a different position.

The suspected evasion of postal fees during the period totals 1.3 billion yen. Hakuhodo Erg Inc., a subsidiary of major advertising agency Hakuhodo Inc., gained about 150 million yen and Wellco received about 160 million yen as commissions and other fees for their involvement in the direct mail, according to the sources.

Best Denki, based in the city of Fukuoka, is listed on the First Section of the Tokyo Stock Exchange and Wellco, based in Ishikawa Prefecture, is listed on its Second Section.

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