OSAKA -- Yasunori Kagoike, former chairman of scandal-hit school operator Moritomo Gakuen, and his wife pleaded innocent to charges of subsidy fraud as their trial opened at the Osaka District Court on March 6.
Public prosecutors accuse the pair of fraudulently obtaining state and local subsidies for the school operator, which became embroiled in a cronyism scandal linked to Prime Minister Shinzo Abe and his wife Akie.
"The prosecutors' arguments are not true. An investigation based on a national policy is unacceptable," Kagoike, 66, said in the first hearing. He has denied the bulk of the charges against him. His 62-year-old wife Junko, meanwhile, told the court, "I was not involved in the applications for the subsidies."
According to the indictment, the Kagoikes submitted false contracts in connection with the construction of an elementary school on a property in Toyonaka, Osaka Prefecture. By February 2017, they had allegedly swindled some 56 million yen from the state in subsidies. The school operator had purchased the property from the government at a heavily discounted price.
Kagoike and his wife are also accused of defrauding the Osaka Prefectural Government and the Osaka Municipal Government out of some 120 million yen in subsidies by padding data including the number of children with disabilities at a kindergarten run by the school operator between fiscal 2011 and 2016.
The Kagoikes were arrested in July 2017 by a special investigation unit of the Osaka District Public Prosecutors Office. They were subsequently released on bail in May last year.
Prosecutors plan to make their specific demands for punishment on Oct. 30 when the trial is scheduled to be concluded, after a total of 15 hearings, in which 19 people are expected to appear as witnesses.
(Japanese original by Masayuki Takashima and Shiho Matsumoto, Osaka City News Department)