Director: Daniel C. Levy

Embezzlement in Japanese Private University

(Summary by Prachayani Praphamontripong)

PROPHE Summary:
The owner and a former treasurer of a provincial private Japanese university have been charged with embezzling millions of dollars in government funds, reporting forged donations, and other transgressions. As a result, the university is now under the government's supervision. There has been thought to shutting it down but the new owners express confidence that it will remain open. Some repayments appear in the offing. The provincial government provides funds to encourage local students to stay instead of leaving to attend universities elsewhere.

For the full story see the Chronicle of Higher Education, September 2004. "Head of Japanese University Faces Charges of Defrauding Government," by Alan Brender.

PROPHE Observation:
Most of the world's private higher education operates mostly on private money and most charges about fraud concern the relationship between fee-paying students and the institutions or their boards. However, Japan is a three-decade old example where significant government funds join private funds and so the Tohoku Bunka Gakuen University case of financial fraud by administrators involves public funds. The case is significant for how it can affect the legitimacy of private institutions and for how it may affect the evolving relationship between such institutions and government.