The Economy, Trade and Industry Ministry has launched an investigation into fraudulent receipt of funds from a government program set up to help small and midsize companies, The Yomiuri Shimbun has learned.
Filing double applications or making sales figures of a particular month look smaller than actual are among the methods of fraud that have been detected in the Subsidy Program for Sustaining Businesses. In cases that can be confirmed, the ministry will demand the return of the funds.
Applications for the program began in May, and about 2.56 million have been filed as of last Friday. The ministry has distributed a total of 3 trillion yen to about 2.27 million applicants, or about 90% of the total. But because priority was placed on quickly distributing the funds, the application requirements were relaxed, and it has been feared that it is easy to file fraudulent claims.
According to the ministry, it has assigned officials in the Small and Medium Enterprise Agency since late June to work solely on the investigation with the help of lawyers and other advisers.
The program is aimed at small and midsize companies and individual business owners, including freelancers, whose monthly sales dropped by more than half compared with last year due to the spread of the novel coronavirus.
According to sources, there have been cases of companies intentionally delaying the recording of sales for the purpose of cutting that month's sales figure to less than half. Also, there have been cases in which a business owner has filed two applications as a corporation and a freelancer.
When the ministry finds such wrongdoing, it will order the culprits to pay a 3% annual interest for delay of payment and 20% of the total as a fine, in addition to the amount they wrongly acquired. If the case is more serious, a criminal complaint may be filed. The ministry did not disclose the number of fraudulent cases found so far.
There have been posts on the Internet that solicit the making of fraudulent claims.
"Fraudulent receipt of funds is a crime, so applications should not be made lightly," warned Takeshi Okano, a lawyer.
The ministry already plans to strengthen the screening process for an upcoming government program to subsidize rent payments, for which it will begin accepting applications next week.
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