Photo/Illutration Yasunori Kagoike and his wife, Junko, speak at a news conference in Osaka’s Kita Ward following the Osaka High Court's ruling on April 18, 2022. (Takuya Tanabe)

The Supreme Court rejected the appeals of a couple who ran the scandal-hit Moritomo Gakuen educational institution, effectively finalizing their prison sentences for defrauding the central and local governments.

Presiding Justice Takuya Miyama of the top court’s First Petty Bench, in a decision dated Jan. 10, upheld the Osaka High Court’s ruling that sentenced Yasunori Kagoike, 69, to five years in prison, and his wife, Junko, 66, to two years and six months behind bars.

The Kagiokes were found guilty of defrauding the governments of about 170 million yen ($1.3 million) in subsidies.

“The judiciary easily approved a politically motivated investigation, and we cannot accept it,” the couple said in a statement released on Jan. 12. “We will continue to fight to clarify the truth, including through such procedures as requesting a retrial.”

According to the Osaka High Court ruling, the Kagoikes in 2016 swindled about 56 million yen in subsidies from the central government by inflating the costs to build an elementary school.

They also defrauded the Osaka prefectural and municipal governments of around 120 million yen in subsidies between fiscal 2011 and 2016 by padding data, including the number of teachers employed at a Moritomo Gakuen-run kindergarten, according to the ruling.

The problems for the couple started in 2016, when the Finance Ministry’s Kinki Local Finance Bureau was found to have sold state-owned land in Osaka Prefecture to Moritomo Gakuen at a substantial discount.

Akie Abe, then the first lady, had been named honorary principal of the elementary school that Moritomo planned to build on that land.

Opposition parties argued government bureaucrats slashed the price for the land because of the operator’s connection to Akie.

The school never opened.

The scandal drew heated debate at the Diet, and Yasunori testified there about his interactions with Akie in March 2017.

Her husband, then Prime Minister Shinzo Abe, said that he would resign if proof was found that he or his wife were involved on the discount.

After the Kagoikes were arrested in July 2017, it came to light that the Finance Ministry had tampered with documents related to the sale of the state-owned land, such as deleting the names of Akie and other people involved.

One of the bureaucrats involved in the falsifications committed suicide.

Prosecutors decided not to indict Nobuhisa Sagawa, then director-general of the ministry’s Financial Bureau, and other officials involved.

Only the Kagoikes were prosecuted, but in a separate case related to the subsidies.

(This article was written by Takuro Negishi and Arata Namima.)

Related News