Foot-reading cult Ho-no-Hana Sampogyo, whose leader Hogen Fukunaga faces charges of fraud, has been slapped with tax penalties exceeding 400 million yen, sources said Friday.
The cult was penalized after failing to collect taxes on payments it made to 55-year-old Fukunaga and several other Ho-no-Hana executives, and slapped with heavy additional taxes, apparently for attempting to conceal the payments.
In addition, Fukunaga was personally ordered by the Tokyo Regional Taxation Bureau to pay taxes exceeding 20 million yen for failing to declare 750 million yen he collected from the cult up until 1999.
The Tokyo and Nagoya Regional Taxation Bureaus conducted the investigations into the cult's income. Sources said Fukunaga received 730 million yen of the cult's money during the four years ending last December. But despite being required to declare the earnings, which were deemed by tax officials as bonuses to Fukunaga, the cult reportedly disguised them as expenses for events it held. Tax officials said the organization falsified its accounts to hide the money, leading them to impose heavy additional taxes on the religious organization.
It is not the first time Ho-no-Hana has been penalized for dodging taxes. In 1996, the cult was fined for failing to declare 2.63 billion yen in income. Fukunaga was also penalized with heavy additional taxes and ordered to pay 400 million yen for not declaring 1.3 billion yen he raked in.
Sources close to the cult said the amount it collected from its adherents over 12 years totaled about 90 billion yen. It reportedly gathered a further 10 billion yen from the 24 companies it ran.
About 25 billion yen of the money was spent by the cult on its facilities, while 40 billion yen was spent on personnel and running costs. Fukunaga personally used about 1.8 billion yen on credit card purchases, hotel costs and other expenditures, the sources said.
Fukunaga and nine other cult executives have been charged with preying on the weaknesses of the group's adherents and swindling them out of about 149 million yen.
They reportedly led the adherents to believe that they had supernatural powers and could read their futures via the soles of their feet, telling the followers they would encounter misfortune if they did not participate in the cult's expensive training sessions.
The Tokyo and Nagoya Taxation bureaus have discovered that Honohana-Sanpogyo, a religious cult based in Fuji, Shizuoka Prefecture, failed to report payment of 850 million yen in salary over a five-year period to former leader, Hogen Fukunaga, sources said.
The 55-year-old founder of the foot-reading cult is currently standing trial on fraud charges.
According to the sources, the cult tried to avoid criticism of the self-styled guru's high-rolling income by included his entertainment expenses and rent on the cult's list of expense-account spending.
The taxation bureaus have ordered the cult to pay about 400 million yen in income taxes withheld at source--including penalty taxes--because they determined that the expenses and rent were in fact part of Fukunaga's salary.
Both Fukunaga and his cult were inspected by the bureaus in 1996. The bureaus discovered that the group had paid 2.6 billion yen for its leaders' personal expenses, including 700 million yen in rent for a luxury apartment rented by Fukunaga and his family as well as for a one-month stay at a first-class hotel. They determined that these perks in fact constituted salary and found the cult guilty of failing to report part of the salary paid to Fukunaga.
According to the sources, this time around the bureaus decided that the cult's action constituted intentional tax evasion because it had continued trying to pass off entertainment expenses for Fukunaga and his family as business expenses, despite the bureaus' warnings in 1996.
Since that date, the cult has been under fire by former believers who have filed lawsuits against it demanding a return of fees donated for "religious training."
Because Fukunaga has been criticized in these trials for his high personal expenses, he tried to avoid further such criticism by having the cult use inventive accountancy, the sources said.
TOKYO - The founder and former leader of the Ho-no-Hana Sampogyo foot-reading cult failed to declare some 750 million yen in taxable income for four years until 1999, sources close to the case said Friday.
Tax authorities have apparently ordered Hogen Fukunaga, born Teruyoshi Fukunaga, 55, to pay a combined 400 million yen in income tax and penalties, the sources said.
Of the 750 million yen judged by the authorities as his income, some 700 million yen was from the cult's money Fukunaga allegedly spent for personal use, including stays at luxury hotels, dining at restaurants and purchases of name-brand products, they said.
The remaining amount was his undeclared income from his ''foot-reading'' practices on people who consulted with the cult on their illnesses and other troubles, the sources said.
Fukunaga is now standing trial on fraud charges but he has pleaded not guilty.
Fukunaga started preaching in 1980, claiming to be the world's final savior following Jesus Christ and the Buddha. He based his claim on what he called the ''voice of heaven.''
He has claimed he can read people's past and future by examining the soles of their feet. He resigned as the leader of Ho-no-Hana in January after the police search.
Ho-no-Hana has said it once had about 30,000 members.
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