Photo/Illutration Kohei Tsukamoto on June 2 at the Metropolitan Police Department’s Mejiro Police Station (Soichi Tsuchidate)

Tokyo police arrested a tax official suspected of being involved in a major case of pandemic subsidy fraud, the latest in a series of related arrests of a group investing in cryptocurrency.

The Metropolitan Police Department announced the arrest of an employee of the National Tax Agency’s Tokyo Regional Taxation Bureau on June 2 for allegedly misappropriating public funds.

Kohei Tsukamoto, 24, a resident of Yokohama who works at the bureau's Tsurumi tax office in the city, was arrested on the charge, along with Rinka Sato, 22, a company employee who lives in Mitaka, western Tokyo.

The two are alleged to have made a 19-year-old high school student pose as a sole proprietor and apply for the central government’s COVID-19 subsidy, issued for those feeling the economic pinch from the pandemic, by falsely claiming that he was eligible.

They received a 1 million yen ($7,700) subsidy by doing so, police said.

Tsukamoto has remained quiet on the matter, while Sato told investigators that she did not know it was fraud, police said.

These are just the latest in a string of related subsidy fraud arrests, one of which was also a former tax bureau staffer.

Tokyo police arrested five people between April 2021 and March this year for receiving the COVID subsidy using a similar method.

Those included a 27-year-old former employee of Daiwa Securities Co. and a 24-year-old former employee of the Tokyo Regional Taxation Bureau.

All seven suspects are members of the same group that invests in cryptocurrencies, police said.

Using the names of 200 or so university students and others, the group has illegally received some 200 million yen in COVID subsidies, police said.

Most of the money has been used to fund the group’s investment activities, police said.

The group solicited cooperation from high school students and university students to apply for COVID subsidies so they could invest the money in a cryptocurrency business called Mining Express, according to police sources.

Tsukamoto and the former employee of the Tokyo taxation bureau are childhood friends and had started working at the bureau at the same time.

The former employee told investigators he invited Tsukamoto to become an accomplice in the fraud scheme, police said.

Tsukamoto had prepared the tax return documents for the students, police said.

One of the university students who took part in the fraud scheme surrendered to police in August 2020.

Police suspect a man in his 30s who has left Japan after the fraud case came to light played a main role in the group.

This case is separate from the recent revelations about a family arrested for their alleged involvement in a massive COVID subsidy fraud scheme, for which one family member is still wanted but is believed to have fled the country.

(This article was written by Ryo Oyama and Soichi Tsuchidate.)

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