Three arrested in Japan on suspicion of coronavirus relief fraud

TOKYO (Reuters) - Three men were arrested in Japan on Wednesday on suspicion of making fraudulent applications for government funds for businesses hit by the coronavirus in a scheme that may have cost taxpayers up to 400 million yen ($3.77 million), NHK reported.

The suspects received the money from a government programme to distribute more than $20 billion in aid, which was contracted to a not-for-profit group linked to advertising giant Dentsu Group Inc, police told Reuters.

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 organisation 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 programme, it was conducting a review of its involvement in such projects.

(Reporting by Sakura Murakami; Editing by Robert Birsel)