Osaka’s Yao City revokes designation of Type A disability employment support provider over ¥400 million in fraudulent claims

From The Sankei Shimbun

May 27 2026

OSAKA – Osaka’s Yao City revokes designation of Type A disability employment support provider over ¥400 million in fraudulent claims.

The city of Yao in Osaka Prefecture said on May 27 it revoked, effective the same day, the business designation of the Type A continuous employment support provider “Taylor’s Guild” in the city for fraudulently receiving about ¥440 million in additional subsidies and other payments intended for disability employment support services. The fraudulent claims were made across 28 municipalities in Osaka and Nara prefectures, including Yao. The total amount sought for repayment, including penalties imposed for the violations, is expected to reach about ¥614 million.

Under the Type A support system, providers receive additional subsidies in the following fiscal year based on the number of users who move into regular employment and remain employed for more than six months, as a way of evaluating job retention.

According to the city, the nonprofit organization Taylor’s Guild, which operates the facility, reported in April 2025 that 38 users had qualified for the subsidy during fiscal 2024. Of those, 15 found employment at companies where relatives of the organization’s representative served as directors, but they resigned within six months. Authorities also confirmed multiple irregularities, including applications for the same users within three years, which is prohibited under the system, and inflated user numbers.

Following an anonymous tip, the city began an audit of the organization in September 2025. Interviews with users revealed they had not actually been engaged in work duties, but instead had been made to study for computer qualifications. Based on these findings, the city determined that the subsidies had been fraudulently obtained.

The city certified about ¥160 million as improperly received and plans to demand repayment of approximately ¥240 million including penalties and additional charges.

The issue follows a separate scandal involving four facilities operated under Osaka City-based Kizuna Holdings, whose business designations were revoked after authorities found they had fraudulently received around ¥15 billion in employment support subsidies. Osaka City filed criminal complaints with Osaka Prefectural Police against five people, including representatives and former representatives of the four facilities, on suspicion of fraud over allegedly inflated claims totaling about ¥7.9 billion.