Moritomo Gakuen case defendants sent to prison

A private school operator in western Japan and his wife are to spend time in prison for defrauding the government out of 170 million yen in subsidies, now that their appeal to the Supreme Court has been rejected.

Kagoike Yasunori, who operates Moritomo Gakuen in Osaka, and his wife Junko stood trial on charges of defrauding the national as well as prefectural and municipal governments out of a total of 1.3 million dollars in subsidies.

The money was to cover the costs of building an elementary school and operating a kindergarten.

Throughout the trial, Kagoike pleaded not guilty to most of the charges against him.

The Osaka High Court upheld a lower court decision to sentence Kagoike to five years in prison for fraud. The high court determined that he initiated the process of defrauding the government by telling an architectural firm to claim more subsidies than it was eligible for to cover costs.

His wife had been given a suspended sentence by the Osaka District Court. The high court struck it down and sentenced her to two and a half years in prison. The court said she must have been well aware of the subsidy fraud because she was a de facto partner in her husband's operation of Moritomo Gakuen.

Both defendants then appealed to the Supreme Court, whose First Petty Bench rejected the appeal.

The case drew much public interest when it came to light in 2017, as it was reported that Kagoike purchased state-owned land at a price well below market value to build the elementary school.

Former Prime Minister Abe Shinzo's wife was set to serve as honorary principal of a new school that was to open on the land. The school never opened.

The revelation started heated debate at the Diet and led to a former Finance Ministry official's suicide after he was forced to falsify ministry documents concerning the land deal.