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Ex-Moritomo Gakuen chief, wife slapped with additional fraud charges

Yasunori Kagoike, former chairman of Moritomo Gakuen, is seen in Toyonaka, Osaka Prefecture, in this July 27, 2017 file photo. (Mainichi)

OSAKA -- The Osaka District Public Prosecutors Office brought additional charges against Yasunori Kagoike, former chairman of the scandal-hit nationalist school operator Moritomo Gakuen, and his wife Junko on Sept. 11 for defrauding the Osaka prefectural and municipal governments out of subsidies for their school businesses, it has been learned.

The latest indictment, which accuses the couple of fraud and attempted fraud, comes after they were earlier charged with state subsidy fraud, with the amount they allegedly cheated or attempted to cheat totaling approximately 201.5 million yen.

According to the indictment by a special investigation unit of the district public prosecutors office, Kagoike, 64, and his wife Junko, 60, defrauded the Osaka Prefectural Government and the Osaka Municipal Government out of around 102 million yen in subsidies to Tsukamoto Kindergarten in Osaka between fiscal 2011 and 2016, which were allocated in accordance with the reported number of children with disabilities at the facility operated by Moritomo Gakuen. The couple is also accused of attempting to swindle another 25 million yen or so in fiscal 2016.

Furthermore, the couple was also prosecuted for swindling the Osaka Prefectural Government out of some 19 million yen in subsidies to Kaisei Kindergarten in Osaka between fiscal 2011 and 2013. The operation of the kindergarten, which is affiliated with Moritomo Gakuen, has been suspended. Both Kagoike and his wife remain silent about the charges against them, according to a source close to the case.

With regard to a shady land deal over a state-owned lot in Toyonaka, Osaka Prefecture, where Moritomo Gakuen once planned to open an elementary school, local assembly members and lawyers have filed a complaint against officials of the Kinki Local Finance Bureau on suspicion of breach of trust for selling the land tract to Moritomo Gakuen at a massively discounted price of 134 million yen -- some 800 million yen cheaper that the appraisal value -- in June last year on the grounds that Moritomo would have to bear waste removal costs. However, it is believed to be difficult for prosecutors to build a breach of trust case because they have to prove the finance bureau employees concerned had the intention to cause damage to the central government for the benefit of themselves and Moritomo Gakuen.

"It is difficult to prove whether the local finance bureau employees were aware that they would inflict damage to the central government, as it is a matter of their inner thoughts," said a senior prosecutor. Still, it remains unclear how the volumes of waste to be removed from the site were calculated and how the heavily discounted land price was finalized.

With the latest indictment of the Kagoikes, prosecutors have wrapped up their investigations into the series of subsidy fraud cases, while they are continuing to probe the breach of trust allegations against the finance bureau employees and suspicions that they destroyed records of their negotiations with Moritomo Gakuen over the murky land sale.

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