Three men got arrested in Japan on Wednesday on the suspicion of making fraudulent applications for the government funds for businesses suffered due to the coronavirus or COVID-19 pandemic in a scheme that might have cost taxpayers up to 400 million yen ($3.77 million), NHK reported.
The suspects got the money from a government program for distributing more than $20 billion in aid that was contracted to a not-for-profit group linked to advertising giant Dentsu Group Inc, police informed Reuters.
3 Men Arrested for Suspected COVID-19 Relief Fraud
The three, who all live in central Japan's Aichi prefecture, were arrested on suspicion of falsifying documents showing that their income had fallen since the beginning of the pandemic to get 1 million yen ($9,418) each in government aid. The arrests follow a string of scandals involving government payouts for businesses struggling during the pandemic.
NHK identified the three and said that two of them denied the charge. Reuters was not able to contact them and it was not clear if they had lawyers. Police confirmed that three people had been arrested on suspicion of fraud but did not identify them or give more details. NHK said the three were also suspected of involving about 400 other people in falsifying applications to get government subsidies, and taking a cut of the 400 million yen that was handed out.
The program was subcontracted from the government to a non-profit organization called Service Design, which was co-founded by Dentsu, one of Japan's most influential companies. Dentsu said in July that in response to public reaction over its dealings with the government in the small business program, it was conducting a review of its involvement in such projects.
(With agency inputs)