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Business group defrauds government; Prefecture demands money return

Date Posted: 2007-12-06

A business group promising a high technology method of extracting oil from tree resins hasn’t done its job, but filed a government claim for payment anyway.
Okinawa Prefecture and the central government awarded the Nago City group, ‘Forestry Structural Reforming Work’, a total of ¥138 million in subsidies, only to discover the group hasn’t even set equipment in place to begin the project. The group had earlier told the Prefecture “now the work is finished and money should be there (in the group bank account).”
The central government and Okinawa Prefecture believed the businessmen and transferred the money. An audit uncovered the false claim, and now the governments want the group to immediately reimburse ¥8 million for work not performed. “We did approve them because they said they’d be set up soon,” a Prefecture official says, “but they didn’t set up so we have told them they’re operating against the law and they have to return the money.”
Tokyo officials have told Okinawa Prefecture to recoup the subsidy money from the business group, or pay it back itself. The central government position is that Okinawa Prefecture approved the project without checking the final work, and is liable because the business group did violate the law. The group says it is now on track and will have equipment in place soon.

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