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Dormant nonprofit failed to report up to 10 million yen, listed deceased man as member

Financial statements of the activities of an incorporated nonprofit organization indicate that the organization is dormant. The year remains blank in the statement for fiscal 2013 (foreground), and crosses appear in places where monetary amounts should be, indicating that the organization submitted an unchanged sample prepared by the Ishikawa Prefectural Government. (Mainichi)

An incorporated nonprofit organization (NPO) in Ishikawa Prefecture that reported to the prefecture that its income and expenditure over several years was zero had as much as 10 million yen deposited into a bank account it operated, the depositor has told the Mainichi Shimbun.

The organization also had a deceased person registered as a member, and an attempt was made to sell it online, prompting the Ishikawa Prefectural Government to launch a probe and question the organization's director.

The discoveries come amid a recent finding by the Mainichi Shimbun that many incorporated NPOs in major cities are dormant, and some are being used for crimes.

Japan's NPO law requires such bodies to annually submit information including a business report detailing their activities; a financial report that lists membership fees, donations and other forms of income along with expenditure; and a list of the names and addresses of executives and other members. The body can be fined up to 200,000 yen for each violation of not listing items it should, making false entries, or failing to file a report.

The incorporated NPO in question was ostensibly set up to help disadvantaged people. However, paperwork obtained by the Mainichi Shimbun documenting five years of the organization's activities up until fiscal 2016, showed that it was dormant, with each year stating "no activities." The financial statement of its activities for fiscal 2013 merely showed crosses matching a sample provided by the prefecture, while for the other four financial years, its income and expenditure remained at zero.

However, a man in his 60s living in Tokyo, who was one of 11 listed members of the organization as of March 2017, told the Mainichi Shimbun, "I deposited about 300,000 yen per month into the NPO's bank account as requested by the director. Over the four-year period up until around January last year, the total amount would have been in the range of several million yen to 10 million yen."

The Tokyo man said he had known the director for about 40 years, and said, "The director told me, 'I'm hard up. Could you give me some support, making it a donation?' In actual fact I thought it was going to be his living expenses."

Among the other listed members was a man who died 16 years ago. When a Mainichi reporter visited the stated address of the director to obtain more information, the landlord of the residence said that the director had moved out "about four years ago" (in around 2014), after falling behind on rent.

The Mainichi Shimbun also visited two other listed addresses of members, but there was no sign that they were living there. Separately, another man in his 70s commented, "I didn't even know that I was a member until I was approached for a comment. I feel uncomfortable that my name has been used without my knowledge."

People familiar with the NPO says that at one point, it was offered for sale online through a broker for several million yen. A man listed as the auditor-secretary, who should know the state of the NPO's assets, commented, "I just lent my name. I don't know anything."

The Ishikawa Prefectural Government declined to comment on the organization, citing its probe.

A survey by the Mainichi Shimbun found that 2,138 specified nonprofit corporations in central Tokyo and 20 other major cities nationwide, or about 12 percent of the total, are dormant.

(Japanese original by Yasuji Mukaihata and Ryuji Tanaka, Special News Group)

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