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March 24, 2016

TEPCO employee faces prosecution over alleged nuke accident compensation fraud

http://mainichi.jp/english/articles/20160324/p2a/00m/0na/011000c

Police sent papers on a Tokyo Electric Power Co. (TEPCO) employee to the Tokyo District Public Prosecutors Office on March 23 for alleged fraud after advising members of a nonprofit organization in a fake compensation scheme after the Fukushima No. 1 Nuclear Power Plant disaster, it has been learned.

• 【Related】TEPCO insider helped cook up false nuke crisis compensation claims: ex-NPO exec

The employee, a man in his 40s, was referred to prosecutors by the third division of the National Police Agency organized crime policy unit for his connection to the fraud. According to individuals connected with the investigation, his role involved instructing two former senior executives of the NPO in how to submit false compensation claims to TEPCO on the basis of revenue being lost due to the nuclear accident.

According to the allegations, the TEPCO employee worked together with the two employees of the Nakano, Tokyo-based NPO -- the "Higashinihon Daishinsai Genshiryoku Saigaito Hisaisha Shien Kyokai" (support association for victims of the Great East Japan Earthquake and nuclear disaster) -- between December 2011 and January 2012 to submit the fraudulent claims on behalf of a civil engineering and construction firm in Fukushima Prefecture, for which the NPO was acting as an agent.

A total of between 10 and 20 million yen in compensation fees was consequently received from TEPCO, among which the employee pocketed more than 4 million yen.

When questioned by the police agency's organized crime unit officials regarding the case, the suspect admitted that he had received the funds from the NPO officials. He said, however, "I did not believe that I was involved in making fraudulent claims."

Meanwhile, an official with the TEPCO public relations department said, "We understand that prosecutors are continuing to investigate (this case), and we are declining to comment upon it -- including with respect to whether or not the company is aware of the individual in question."

The two NPO affiliates were arrested by the police unit in August 2014 for their alleged role in the scheme. Kazuaki Shindo, 44, is presently undergoing court proceedings for fraud in conjunction with the case, while Hiroshi Murata, 57, received a nine-year prison sentence for the same crime, which he is presently appealing.

During a court hearing conducted at the Tokyo District Court in January last year, Shindo testified that 5 percent of the fraudulently-received compensation funds had been paid to the TEPCO employee "for the information provided and the quality of the instructions."

According to TEPCO, companies seeking compensation must prove that their revenue fluctuated before and after the nuclear disaster by submitting tax returns -- or financial statements showing account settlements of income and expenditures -- in addition to other documents specified by TEPCO. Either original or copied versions of the documents are accepted.

With respect to the incident in question, the materials submitted by the NPO included copies of tax returns that had been falsified in order to inflate pre-disaster profits. TEPCO, not realizing the fraudulent nature of the materials, approved the compensation requests.

An official connected to the investigation commented, "Copies of documents are easier to falsify than originals, which is one explanation for the submission of the bogus claims."

Police officials in both Osaka and Fukushima prefectures have detected additional fraudulent claims following the nuclear disaster.

"Such incidents are likely being enabled by an insufficient system for screening (such claims)," commented one investigator. "TEPCO bears a portion of the responsibility."