Moritomo Gakuen raided for suspected subsidies fraud

Kyodo, JIJI

Prosecutors staged overnight raids through Tuesday morning on the premises of scandal-tainted school operator Moritomo Gakuen in Osaka Prefecture on suspicion of defrauding authorities to receive subsidies.

The criminal investigation drew nationwide attention as Akie Abe, wife of Prime Minister Shinzo Abe, was a one-time honorary principal of Moritomo’s planned elementary school, and Yasunori Kagoike, former head of the school operator, testified under oath in the Diet in March over his ties to the Abes.

In one of the searches, the Osaka District Public Prosecutor’s Office carried away about 100 cardboard boxes of seized items from the Moritomo-run Tsukamoto Kindergarten and Moritomo Gakuen’s head office in the city of Osaka.

Investigators also raided a nursery school under Moritomo’s management in Osaka and the Kagoike home in Toyonaka in the prefecture. The searches lasted for about 11 hours until 6:20 a.m. Tuesday.

The investigators launched the raids after receiving a criminal complaint from the Osaka Prefectural Government, which alleged that in the six years to fiscal 2016, the kindergarten fraudulently received a total of ¥61.8 million. Last month, it filed a criminal complaint with the Osaka prosecutors against Kagoike on fraud charges.

In the criminal complaint, the prefectural government alleged that the kindergarten unlawfully received ¥34.40 million in subsidies between fiscal years 2011 and 2016. The funds were earmarked for personnel expenses specifically designated for full-time teachers, but some of the teachers at Moritomo actually doubled as staff at a nursery school, according to the government.

The local government also claims that the school operator received subsidies totaling ¥27.44 million between fiscal years 2011 and 2015 for accepting special needs students even though Moritomo did not actually provide any special education programs.

The prosecutors also allege that Moritomo Gakuen swindled the government out of a subsidy of ¥56 million to build an elementary school in Toyonaka. The school operator is suspected of padding construction costs and submitting conflicting documents for its school construction contract, including to the central and local governments. Moritomo in March gave up on the plan to open the school and filed for court protection the following month with a debt of about ¥2 billion.

Kagoike, a one-time admirer of Abe, tried to name the planned school after the prime minister. Kagoike’s wife, Junko, exchanged texts with Akie Abe even after the allegation emerged that the prime minister donated ¥1 million through Akie to Moritomo Gakuen.

“Prime Minister Abe, stop bullying my husband!” she shouted to reporters from a window on the second floor of the house as the investigation was carried out. At around 1:30 a.m., she even asked the investigators at the entrance of the house to stop the raid, saying, “Go away, please.”

Speaking to reporters on Tuesday morning, Kagoike said he intended no wrongdoing.

“I admit I must take a hard look at some matters, but I didn’t do them on purpose,” Yasunori Kagoike told reporters Tuesday morning at his home. He branded the prosecutors’ move as “outrageous” and said he was ready to be arrested when the investigators arrived.

He also expressed displeasure at the prime minister’s moves to distance himself from the Kagoikes after he was asked by reporters if he had a comment for Abe in connection with the raids.

“Mrs. Abe even took the post of honorary principal of the elementary school we had been building. Despite that I have been now left holding the bag,” Kagoike said.

The searches were conducted about four months after a shady land deal came to light in which Moritomo acquired a plot in Toyonaka from the central government for the construction of an elementary school for an unusually low price. The ¥134 million deal came after a discount of ¥822 million from the estimated value of ¥956 million.

But Kagoike argued that the allegations over the controversial land purchase were not included in the charges related to the raids because prosecutors do not want to target the Abes.

Kagoike said he believes relevant bureaucrats made “all” decisions on the land purchase considering Abe’s instruction and influence.