TOKYO — Residents of a rural Japanese city were all looking forward to receiving a $775 payment last month as part of a coronavirus pandemic stimulus program.

But a municipal official mistakenly transferred Abu City’s entire Covid aid budget, nearly $360,000, to a single recipient on the list of low-income households eligible for the money. After the man promised to refund the amount paid by mistake, the man gambled it up.

The man, Sho Taguchi, 24, told police he had lost the money in online casinos, a police officer in Yamaguchi prefecture said by telephone on Thursday. The day before, authorities had arrested Mr Taguchi, the official said. The charge: fraud.

Japan is not the only country where corona aid money has been misappropriated. The fraud is so widespread in the United States that the Department of Justice recently appointed a prosecutor to solve the fraud. People have been accused of buying a Pokémon card, a Lamborghini and other luxuries.

But Abu, with 2,952 inhabitants, may be the only city in the world where an entire Covid stimulus fund has disappeared at the hands of an online gambler who received it through a clerical error. The details of the case and the rare coverage of the Japanese national news media come as a shock to residents of the resort.

“I was surprised to hear the news and also amazed at how he spent the money,” said Yuriko Suekawa, 72, who has lived in Abu since she was born. “It’s really unbelievable.”

The story began on April 8, when an official in Abu mistakenly asked a local bank to transfer Mr Taguchi 46.3 million yen, or about $358,000, said Atsushi Nohara, a city official. Mr Taguchi’s name topped the list of 463 households each eligible for 100,000 yen as part of a national stimulus package.

Credit…Kyodo News, via Getty Images

After Abu officials realized the mistake, they immediately visited Mr Taguchi and asked for the money back, the city’s mayor, Norihiko Hanada, said in a speech on the city’s YouTube channel.

Mr Taguchi agreed to travel with the officials to his bank in a government car, but he refused to enter the building and later said he intended to consult a lawyer, NHK public broadcaster said. Taguchi met with Abu’s deputy mayor on April 14, NHK reported, and his lawyer told the city the next day that his client would return the money.

“But in the end he didn’t,” said Mr. Hanada on YouTube. He said that Mr. Taguchi eventually told city officials that he had spent the 46.3 million yen, would not walk away and intended to “atone for the sin”.

Mr Hanada, on behalf of the city, apologized to residents for the loss of “such a precious and large amount of public funds”.

“The arrest will help us get closer to the truth,” he said on Thursday. “His testimony will give us a springboard to get the money back.”

Masaki Kamei, a prosecutor in the city of Osaka, said Abu officials were responsible for allowing Mr Taguchi to drain the city’s Covid relief fund.

“The city’s approach was not strict enough, and it allowed the case to progress to this point,” said Mr. kamei. “Perhaps their approach was based on a view of human nature as fundamentally good.”

Abu is located about 100 miles north of the nearest major city, Fukuoka, in an area of ​​Yamaguchi Prefecture where agriculture, fishing and forestry drive the economy. Mr Taguchi moved there about a year and a half ago as part of a program in which the local government provides subsidies to outsiders who move in and rent vacant houses, said Mr Nohara, the city official.

Following the mistake, city officials sent Covid relief payments to local households, Mr Nohara said, adding that the money came from another municipal source. He didn’t work out.

Abu resident Ms Suekawa said the event was an accident for a city that had successfully weathered the pandemic and hoped to draw visitors to the newly built seaside campground.

“I hope that this negative image of the city will subside and that it will become a sunny and calm place again,” she said. “Everyone makes a mistake, so I don’t blame this man, but I’d like him to confess to his crime and give us our money back.”

Regardless, Mr Nohara said, Abu sued Mr Taguchi last week for about 51 million yen, including legal fees.

Hisako Ueno reported from Tokyo, and Mike Ives from Seoul.

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