TOKYO -- A group of four has been arrested for fraudulently receiving 1 million yen (about $9,580) in subsidies distributed to those including self-employed workers who have suffered from a decline in earnings amid the novel coronavirus pandemic.
Fifty-five people had been arrested nationwide in connection with benefit fraud cases by Oct. 21, and there has also been a drastic increase in inquiries about returning the benefits from those who fear their illegal activities will be exposed. The Ministry of Economy, Trade and Industry (METI) has implemented a system that exempts individuals who received the benefits illicitly from penalties such as imposing additional fines, and is urging the illegitimate recipients to return the money.
The Metropolitan Police Department's second investigation division arrested four individuals, including Takehiko Yamamoto, 45, an unemployed resident of the central Japan city of Ichinomiya, Aichi Prefecture, for alleged fraud on Oct. 27. According to sources close to the investigation, the suspects have been accused of fraudulently receiving benefits by creating fake tax returns and other documentation that falsely claimed a fall in earnings due to the novel coronavirus.
Three of the four suspects have been rearrested. Mizuki Ikuta, 36, an unemployed resident of the western Japan city of Matsuyama, is suspected to have been involved in some 100 cases where false documentation was filed, swindling around 100 million yen (about $958,000) in total. It is thought that he learned of the criminal tactics from Yamamoto, and repeatedly engaged in fraudulent activity.
The virus subsidies are distributed to small- and mid-size companies, as well as self-employed individuals whose monthly income for any month since January had dropped to below half of earnings recorded in the same month of the previous year. Online application procedures to receive the virus subsidies have been simplified in an attempt to guarantee swift payment, and recipients do not need to pay back the money received unlike other main forms of financial assistance. According to the National Police Agency, 13 prefectural police departments had arrested 55 people and sent papers on six people accused of fraud, among other charges, to prosecutors by Oct. 21. The total amount of damages has reached 43 million yen (about $411,940).
There are common methods for creating falsified documents, and many suspects partake in illicit activities on an individual level without belonging to criminal groups. There have also been cases where suspects lure young people to assist them on social media. A senior investigator pointed out the inadequate nature of inspections for the subsidies by saying, "Benefit fraud cases that surface once parents find payment notices sent to their homes after university students light-heartedly applied for the subsidies stand out."
Meanwhile, inquiries from individuals wishing to return benefits as they claim to have "mistakenly received them" have increased since late July when benefit fraud cases had begun to be reported in the news. It is believed that the inquiries were made out of fear of being caught themselves. About 1,800 inquiries had been made to police across Japan by Oct. 21, while some 200 inquiries had been made to nationwide consumer affairs centers by Oct. 15.
The economy ministry had initially imposed a penalties including adding 20% interest on individuals refunding the money, in cases where they had been recognized as having fraudulently received the funds. However, the ministry made a new proposal on Oct. 6 to exempt individuals who make voluntary reports before the ministry's investigation from being penalized.
An economy ministry official explained, "The economy was in a terrible state in April when the subsidy was being discussed. We prioritized distributing the benefits swiftly in accordance with ethical principles." Furthermore, the ministry reportedly decided to encourage individuals to return the money as it appears that many people received benefits illicitly without much deliberation after being approached on social media.
Police appear to have been reviewing cases individually by determining factors such as the extent of their maliciousness.
National Police Agency Commissioner General Mitsuhiro Matsumoto commented, "We'd like to take rigid measures if there are cases that should be handled as criminal incidents."
(Japanese original by Kunihiro Iwasaki, Kotaro Adachi and Naritake Machida, City News Department)