The former head of a school operator and his wife, who are at the heart of a cronyism scandal linked to Prime Minister Shinzo Abe, pleaded not guilty Wednesday to charges of fraud related to public subsidies for their schools, claiming their arrests were politically motivated.
Yasunori Kagoike, the 66-year-old former chief of Moritomo Gakuen, and his 62-year-old wife Junko have been charged with defrauding the central government of roughly ¥56 million ($500,000) in subsidies between March 2016 and February 2017, by alleged padding of construction costs for an elementary school in Osaka Prefecture on land purchased from the government.
The two were also indicted for allegedly reporting an incorrect number of teachers at their preschool, to unlawfully receive a total of around ¥120 million in subsidies from the prefecture and the city of Osaka between fiscal 2011 and fiscal 2016.