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Kagoikes arrested over alleged subsidy fraud involving Moritomo Gakuen schools plugged by Abe’s wife

Moritomo Gakuen pair targeted over money for nationalist schools plugged by Abe's wife

Kyodo

Prosecutors on Monday arrested the former chief of a scandal-mired nationalist school operator and his wife for allegedly defrauding the central government of public subsidies for their business.

The arrest of Yasunori Kagoike, 64, former chief of Moritomo Gakuen, and wife, Junko, 60, follows the scandal over a sweetheart land deal allegedly linked to Prime Minister Shinzo Abe.

Abe’s wife, Akie, was honorary principal of an elementary school Moritomo Gakuen intended to open in April.

Before their arrests, prosecutors had questioned the Kagoikes on Monday afternoon after quizzing them for the first time last Thursday. Junko Kagoike served as a senior official at the schools.

Yasunori Kagoike told reporters after the first round of questioning that he had “remained mostly silent.”

He drew attention for securing a huge discount on a parcel of state-owned land in Osaka Prefecture where he wanted to build an elementary school.

Moritomo Gakuen was found to have acquired the 8,770-sq.-meter plot in June last year for just ¥134 million, or roughly 14 percent of its appraisal value, after holding negotiations with the Finance Ministry’s local bureau in the area.

Abe’s wife resigned her honorary post at the school after the deal came to light, but the possibility that she and the prime minister were linked to it came under scrutiny in the Diet. Abe denied that he or his wife played any role in the real estate deal, which some dubbed the “Akheed scandal,” playing on the infamous 1976 Lockheed scandal and the first name of Abe’s wife.

The Osaka District Public Prosecutor’s Office’s special investigation squad opened an investigation into the Kagoikes after receiving a complaint in March that the school entity unlawfully claimed state subsidies worth about ¥56 million ($505,000) related to the construction of the elementary school in Toyonaka.

Moritomo Gakuen gave up on opening the school as the scandal grew, and Yasunori Kagoike stepped down as its head in March.

He also faces a criminal complaint filed in May accusing him of swindling Osaka Prefecture out of about ¥62 million in subsidies between fiscal 2011 and 2016 for a kindergarten in the city of Osaka.

In June, the prosecutors raided sites linked to Moritomo Gakuen.

In applying for the state subsidies, Moritomo Gakuen submitted a document listing around ¥2.38 billion in construction costs. But the operator is suspected of padding the costs to obtain higher subsidies, investigative sources said.

The office intends to build cases on the two allegations in the belief that Yasunori Kagoike initiated the actions, the sources said.