Japanese companies that voluntarily returned illegally received COVID grants during crackdown



Nobuteru Ishihara speaks with reporters at the prime minister’s office in Tokyo on December 6, 2021, four days before his resignation as cabinet special adviser. (Mainichi/Kan Takeuchi)

TOKYO — Increasing numbers of companies in Japan that have fraudulently received employment subsidies under special emergency measures to offset the impact of the coronavirus on businesses are voluntarily returning the money after disclosures of illegal and unethical receipts by major travel agency and offices of Diet members.

“From about November of last year, there has been an increase in the number of companies contacting us to apologize and repay the subsidies. Our investigation of these cases showed that they were all illegitimate receipts,” an official from the United Nations said. Kanagawa Labor Bureau. According to the Ministry of Health, Labor and Welfare, a total of 5.26 trillion yen (about $45.5 billion) had been distributed in employment adjustment grants on Jan. 21. Among them, 261 cases were paid to ineligible parties, with total payments of up to 3.2 billion yen (about $27.7 million) as of the end of 2021.

While specific case numbers of companies voluntarily repaying subsidies are unknown, employment offices in prefectures including Miyagi, Saitama and Tokyo have told the Mainichi Shimbun that they have seen a rise in revenues of several to tens of millions of yen from parties who have claimed to pay them fraudulently. manner to have received.

One possible reason for the increase in the number of cases is the efforts of the Ministry of Labor to tackle illegal subsidy revenues. Investigation teams set up at job centers across the country visit companies and conduct on-site inspections without notice. The ministry is also actively investigating cases brought to light by informants. An employee of the employment office said he had received extensive information from whistleblowers, including former employees.



A report on the income and expenses of a political group led by Nobuteru Ishihara, which includes an income section titled “Employment Adjustment Grants,” can be seen in this December 10, 2021 photo, taken in the district Chiyoda in Tokyo. (Mainichi/Yohei Koide)

If huge amounts of money are received unlawfully and the case can be considered very malicious, authorities will reveal information such as the name of a company and its representative, and in some cases even file a criminal complaint. Company name disclosures are increasing in many areas. A representative from the Miyagi Labor Bureau said they believe the revelations are proving to be effective.

In November 2021, it was found that approximately 180 million yen (about $1.6 million) in funds had been fraudulently received by the Tokyo-based travel agency World Air-Sea Service Co., which was then headed by Representative Jungo Kikuma, chairman of the Japan Association of travel agents at that time. It was also revealed that the branches of the ruling Liberal Democratic Party (LDP) led by former LDP Secretary General Nobuteru Ishihara and former Environment Minister Toshitaka Ooka, respectively, had also received employment subsidies for the coronavirus. Although the payments were received legitimately, the politicians were criticized by people who said the subsidies are intended to ensure job security for employees at companies whose turnover fell suddenly during the pandemic. The Saitama Labor Bureau reportedly saw cases where companies that fraudulently returned benefits were described as being scared after seeing the news.

Regional employment agencies will also crack down on cases of social insurance and employment consultants that lure companies into illegal activities. The Tokyo Labor Bureau has confirmed a case where a consultant approached a company with claims of a “anyone can receive” subsidy, guiding them to fraudulently receive the money using the names of former employees and family members who are not. actually work for the company. These are malicious fake application cases that use the simplified screening process that prioritizes fast payments. One person who works closely with an employment agency said: “We want to impose severe penalties, such as disclosing the names of advisers involved in illegal activities.”

If it turns out that companies have incorrectly received subsidies, they must repay the original amount plus a 20% fine. They are also excluded from employment-related grant applications for five years. Regardless of whether companies voluntarily return money, if their cases are considered benefit fraud, they are subject to the same penalties. However, consideration may be given to not disclosing company names.

(Japanese original by Natsuko Ishida, Lifestyle and Medical News Department)

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