/

Kagoike soon to receive second arrest warrant over subsidy fraud

Kyodo

Prosecutors plan to serve a fresh arrest warrant for subsidy fraud to former Moritomo Gakuen chief Yasunori Kagoike in connection with his steeply discounted purchase of state land in Osaka, sources close to the case said.

Kagoike, 64, was arrested last month on suspicion of defrauding the central government of subsidies. He is expected to be additionally charged for fraudulently seeking subsidies from the Osaka Prefectural Government, the sources said Friday.

Kagoike may be served the additional warrant as soon as Monday. Prosecutors are also investigating whether his wife, Junko, 60, was involved in the alleged fraud against the prefecture, the sources said.

The Kagoikes came into the spotlight earlier this year over school entity Moritomo Gakuen’s purchase of public land in Toyonaka, Osaka Prefecture, to open an elementary school with ties to Prime Minister Shinzo Abe’s wife, Akie. The plan has since fizzled amid growing scrutiny into the land deal, Akie Abe’s backing of the school and allegations of donations from the Abes.

The two were arrested July 31 for allegedly swindling around ¥56 million in central government subsidies by padding expenses for building the elementary school.

Kagoike, and possibly his wife, may face a new charge in connection with subsidies the prefectural government provided to a kindergarten run by Moritomo Gakuen.

In May, the Osaka Prefectural Government filed a criminal complaint in connection with the subsidies, claiming Kagoike fraudulently secured about ¥62 million in subsidies over several years.

The Osaka Municipal Government has also filed a criminal complaint alleging that Kagoike fraudulently obtained slightly more than ¥4.3 million in subsidies it provided to the kindergarten.

Regarding the shady land deal, Moritomo Gakuen acquired the 8,770-sq.-meter plot in June last year for ¥134 million, roughly 14 percent of its appraised value, following negotiations with the Finance Ministry’s regional bureau in Osaka.

Prosecutors are looking into whether officials at the bureau committed breach of trust in the process.