[2][3][4] Kagoike sought to expand the kindergarten into a full-fledged Japanese elementary school and applied to buy a parcel of government-owned real estate in 2013, but was turned down as he could not pay a satisfactory price to the government.
[1] On February 9, 2017, the scandal began when Asahi Shimbun reported that the central government of Japan had sold the 8,770 square metres (94,400 sq ft) property in Toyonaka, Osaka Prefecture, to Moritomo Gakuen for around ¥134 million, about 14% of the land's estimated value.
[5][6] Osaka prosecutors eventually suspected that Kagoike and his wife had falsified the numbers of teachers and students at the school, and the expected construction costs, when applying for state subsidies.
[7][8] Former Meiji University law professor Lawrence Repeta [ja] argued that the scandal was a factor in the timing of the 2017 general election called by Abe.
[9] Moritomo Gakuen filed for civil rehabilitation (bankruptcy restructuring) proceedings in October 2017, seeking to write off around 97% of its approximately ¥3 billion debt burden.