ID :
13751
Fri, 07/25/2008 - 12:07
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Defense industry consultant arrested for alleged tax evasion
TOKYO, July 25 Kyodo - Prosecutors arrested a senior official of a Foreign Ministry-linked organization Thursday on suspicion of evading income tax payments in an apparent move to step up a probe into what they see as the opaque flow of funds involving the government's procurement of defense equipment.
Naoki Akiyama, executive director of the Japan-U.S. Center for Peace and Cultural Exchange, is suspected of hiding approximately 232 million yen in consultancy fees and other income from 2003 through 2005 and of evading around 74 million yen in tax payments as a result, according to the prosecutors.
The allegation of tax evasion against the 58-year-old Akiyama emerged during prosecutors' investigations into a bribery scandal involving former Vice Defense Minister Takemasa Moriya, 63, and defense equipment trader Yamada Corp., prosecution sources said.
Akiyama has denied the allegation of tax evasion, according to the sources.
Akiyama, who is known to be well-connected to politicians and defense contractors both in Japan and the United States, allegedly received consultancy and other fees from Yamada Corp.'s U.S. affiliate, Yamada International Corp., and several major defense contractors.
The prosecutors have determined that the fees, barring expenses, constituted personal ''miscellaneous income'' subject to tax payments and that Akiyama evaded declaration of the fees by moving the funds to bank accounts in the United States, according to the sources.
The consultancy fees were paid to three entities including Add-Back International Corp., a Los Angeles-based company in which Akiyama serves as adviser, and the Council for National Security, a nonprofit organization based in Washington.
The prosecutors have determined that the funds effectively went to Akiyama because the three entities do not have substantial operations, according to the sources.
The prosecutors suspect the funds provided by Yamada included payments to reward Akiyama for his efforts to help Yamada maintain sales agency contracts with U.S. defense contractors and to promote a Japanese government project won by Yamada to dispose of poison gas shells found at Kanda port in Fukuoka Prefecture, the sources said.
Akiyama's Japan-U.S. Center for Peace and Cultural Exchange was established to promote cultural understanding between Japan and the United States and its main duties include sponsoring seminars on security issues. Many Diet members close to the defense industry have served as head of the center.
Fumio Kyuma, a former Defense Minister who is a director of the center, said after Akiyama's arrest that the prosecutors are probably investigating how Akiyama spent the money he obtained and if it was connected to other potential scandals.
''I do believe (the money) was not passed on to myself or other politicians,'' said Kyuma, a lawmaker of the governing Liberal Democratic Party.
Akiyama denied any wrongdoing when he testified in January as an unsworn witness at a House of Councillors committee looking into the bribery scandal involving former Vice Defense Minister Moriya.
Moriya has been charged with receiving bribes from former Yamada Managing Director Motonobu Miyazaki, 70.
According to the indictment, Moriya received from Miyazaki about 8.86 million yen worth of overnight trips, including one-day golf outings, on 120 occasions from 2003 to 2007, in exchange for giving favorable treatment to Yamada over the procurement of defense equipment.
Naoki Akiyama, executive director of the Japan-U.S. Center for Peace and Cultural Exchange, is suspected of hiding approximately 232 million yen in consultancy fees and other income from 2003 through 2005 and of evading around 74 million yen in tax payments as a result, according to the prosecutors.
The allegation of tax evasion against the 58-year-old Akiyama emerged during prosecutors' investigations into a bribery scandal involving former Vice Defense Minister Takemasa Moriya, 63, and defense equipment trader Yamada Corp., prosecution sources said.
Akiyama has denied the allegation of tax evasion, according to the sources.
Akiyama, who is known to be well-connected to politicians and defense contractors both in Japan and the United States, allegedly received consultancy and other fees from Yamada Corp.'s U.S. affiliate, Yamada International Corp., and several major defense contractors.
The prosecutors have determined that the fees, barring expenses, constituted personal ''miscellaneous income'' subject to tax payments and that Akiyama evaded declaration of the fees by moving the funds to bank accounts in the United States, according to the sources.
The consultancy fees were paid to three entities including Add-Back International Corp., a Los Angeles-based company in which Akiyama serves as adviser, and the Council for National Security, a nonprofit organization based in Washington.
The prosecutors have determined that the funds effectively went to Akiyama because the three entities do not have substantial operations, according to the sources.
The prosecutors suspect the funds provided by Yamada included payments to reward Akiyama for his efforts to help Yamada maintain sales agency contracts with U.S. defense contractors and to promote a Japanese government project won by Yamada to dispose of poison gas shells found at Kanda port in Fukuoka Prefecture, the sources said.
Akiyama's Japan-U.S. Center for Peace and Cultural Exchange was established to promote cultural understanding between Japan and the United States and its main duties include sponsoring seminars on security issues. Many Diet members close to the defense industry have served as head of the center.
Fumio Kyuma, a former Defense Minister who is a director of the center, said after Akiyama's arrest that the prosecutors are probably investigating how Akiyama spent the money he obtained and if it was connected to other potential scandals.
''I do believe (the money) was not passed on to myself or other politicians,'' said Kyuma, a lawmaker of the governing Liberal Democratic Party.
Akiyama denied any wrongdoing when he testified in January as an unsworn witness at a House of Councillors committee looking into the bribery scandal involving former Vice Defense Minister Moriya.
Moriya has been charged with receiving bribes from former Yamada Managing Director Motonobu Miyazaki, 70.
According to the indictment, Moriya received from Miyazaki about 8.86 million yen worth of overnight trips, including one-day golf outings, on 120 occasions from 2003 to 2007, in exchange for giving favorable treatment to Yamada over the procurement of defense equipment.
