61 Comments

Having worked a lot before on the accounting/tax side with professionals (dentists/doctors/orthodontists), I 100% buy that he didn't notice the money is gone. If you make a lot of money, enough that you don't really need to be concerned with budgeting, and you are not very comfortable with the area most of these people just want to pay someone to make the tax/accounting/numbers go away, and talk to them like once a year about how things are looking.

It isn't that they are dumb, they are obviously very skilled in the areas they are interested in, but they don't really want to think about this stuff, or have to deal with the minutia. And this extends to actually looking at the accounts themselves. Half of the time these people don't even get the statements on their accounts, we have their lawyers and bankers just email or send paper copies of everything to us directly with their consent, since they don't want to deal with it, and it avoids delays and missing info.

So then multiply that by the fact that Ohtani famously does not care about anything beyond baseball, for a professional baseball player, and that he was reliant on the con man as his main translator, and ya, it seems plausible to me.

There was actually a fun Bobby Lee interview a little while back where he talks about the fact he literally does not know how much money he has, he just calls his accountant before making a large purchase and asks can I do this? I have been in the room for the other end of that call many times before, and its a set up that seems common with people who have money who didn't get it by being business people.

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He may not care nor notice, but people that move the money do, so puzzled by your claim millions of dollars would not be noticed, especially with the banking records of where it was going.

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Apr 17·edited Apr 17

Not being snarky, but if you find this interesting the actual complaint is very well written and covers off a lot of these items.

TLDR none of his financial people had line of sight on the account, and when both his agent, and his accountant asked about it on separate occasions because of concerns over the possible tax liabilities, they were told by the con-man translator that the account was private, but had no interest income, donations, or other taxable transactions in it.

If I had a client who gave me that fact pattern directly (i.e. not through a translator), I would have a lot of concerns, but I would assume the account relates to weird sex stuff or an affair, not crimes. So you may want to fire the client, or get the clients representations in writing that there is none of "list of taxable transactions" or any tax slips related to the account. But end of the day you are not the auditor, not having this detail is not necessarily a deal breaker.

The true malpractice here was not having a single Japanese speaker working for you, who could talk to your largest client directly, to make sure he understood the possible implications of his weird sex stuff chequing account.

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Feels like Douglas was spying on me while I did my taxes--on April 15th, as any red-blooded American does.

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+1. That has been my experience, too.

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There's a story on Manny Ramirez who was asking sports reporters for money so he can buy a motorcycle; not realizing that he has more than enough money (in cash) to buy one himself and that he makes WAY more money than any reporter.

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The most implausible part to me is that a degenerate gambler, who is sitting in an MLB dugout every day and close to one of the best players in the game - never bet on baseball?

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One of my life maxim's is that 90% of what people ascribe to conspiracies can be explained by stupidity, sloth, or both. Early in my career, I worked in the prosecutor's office and I can attest that the math skills among the investigators and my colleagues were mostly lacking. It seems likely to me that Ohtani was out $16M--that should be pretty easy to figure out. The extent of the gambling losses, though, as Nate has pointed out, depend upon the bets being made. I am guessing that the bookie at some point figured out he was never going to get paid.

I have seen many instances of trust and betrayal, and yes, it is not uncommon among relatively well-to-do people. What is unusual in this instance is: a) the amount and b) that it is public. Many inside jobs like this, especially thefts within a family unit, used to go unreported. They would only get discovered when a third party was harmed--like if check bounced or if an agent or advisor did not get paid on a timely basis. The more closed a financial system is, and the one between Ohtani and Mizuhara appears to have been quite closed, the higher is the danger of fraud.

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The unique situation of Ohtani depending upon Mizuhara for essentially all communication with people in the US makes this about as ripe an opportunity for fraud as possible.

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Maybe this helps explain why Ohtani wanted defer so much money. He was like "damn, I'm making a lot of money right now, but my bank account empties pretty fast. I want to make sure I have a large income for decades, so I don't blow it all right now."

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It surprises me that the leagues don't require Big4 accounting firms be hired. All the firms have high net worth specialist partners that are particularly watchful over managers and other agents for their clients. I worked in San Diego and we have a Japanese manager come over just to help the Sanyo executives and they make way less money than Ohtani.

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If I remember right he was paying 500k a week towards his debt with the bookie. Once he was in too deep the book had a choice to cut him off from any more action risking him deciding to cut the bookie off from paying him his weekly payments or keep letting him get in deeper and giving him the illusion of a hot streak and getting him even or lower in debt. At the amount Mizuhura was in debt I doubt if the bookie even cared if he won or lost his bets as long as he got his 500k every week. I think there were even some texts to that effect between them.

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Apr 16·edited Apr 16

This is for sure the most plausible explanation. This is a bookie, not DraftKings. At a certain point, him continuing to make bets is all funny money to him. Any money he gets is essentially profit to him because the guys probably not going to dig himself out of the hole.

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I'm surprised his banker and accountant only spoke English. I used to work for a major international bank, and we made a point of employing bilingual staff for the benefit of our "high value customers" which Ohtani certainly would have qualified as. It's not like Japanese is an obscure language where it's hard to find professionals that speak Japanese, English, and also have a business degree.

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Nate, just one thing about rich folks... Never underestimate their disregard for their finances. They are very, very talented at what they do... So good that they really see very little else (or even care to). I mean even quite smart folks were taken for decades by Bernie Madoff, so Ohtani not being aware of this doesn't surprise me in the least. His interpreter was incredibly astute when it came to keeping him in the dark.

Think about that interpretor's job... The amount of actual interpreting would average to probably, what, 30 minutes a day? It's like when I see my cats rolling a jar of their treats to eventually open them. They have all day and all night!

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My gut is the government is just messing up the numbers. Probably totalling all the losses together and discounting the wins. Like the opposite of the people who go to Vegas and tell you they won a bunch, ignoring that they lost more often.

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This reminds me of the economic and public policy cost/benefit analysis world. Where often what the client is paying for and the real "art" of it is omitting costs/benefits in such a way that you can produce a very extensive and thorough piece of research while delivering a predetermined result.

I remember once working on an analysis of a big federal program and we enumerated and calculated every single benefit imaginable from that program and placed some dollar value on it. The costs on the other hand we were only allowed to count direct outlays. No knock on, incidental, or secondary impacts like on the positive side.

It would be like doing an analysis for a tannery and being told you should count the positive notional dollar value in the town being associated with leather goods, but being told not to include any of the downside related to the smell or environmental damage.

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I loved that you picked an obscure business like a "tannery" as an example. lol

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I think Ohtani’s track record of coming to the US 2 years before he should have shows how little he cares about optimizing and tracking his earnings

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Can you expand on why he came 2 years early, and how that cost him money?

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The MLB - Japanese posting system subjects players under 25 to the rookie contract system that suppresses wages for the first 6 years of their MLB career. If he came over 2 years later at 25 he would have gotten a market rate contract then and would have easily gotten more MLB earnings in the 4 years 25-29 that he got in the 6 years 23-29.

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Apr 16·edited Apr 16

It's a good point, but I don't think the decision to come early is irrational even so. The biggest reason is the declining marginal utility of money. Sure, he'd get a ton more dollars by coming later. But he would have to spend two years not being rich. Or, at least, not being so rich that more doesn't really matter...I can't find his final NPB earnings but I expect his total income was under $1M, and I think Japanese taxes would take an even bigger bite than US+CA. By signing early he got a bit over $2M signing bonus, ~550k annual salary, and endorsements, all in 2017 instead of 2019. Certainly in percentage terms that's tiny compared to what he'd have gotten later...but it's plenty for most practical purposes. It also locks that money in; making the other choice, there's a small but nonzero risk of a career-ending injury before he ever gets paid.

And then there are the non-pecuniary factors. He gets to start being a global superstar immediately. His MLB career will be two years longer overall, which will pad all his counting stats. If he has a long career that could mean breaking records he wouldn't have otherwise touched; by contrast if his career gets cut tragically short maybe he still gets into Cooperstown when he wouldn't have otherwise.

But the main thing is that for two years of his life, he has a transformative upgrade in status, fame, and income. And then after those two years, while he makes a lot less in nominal terms his life isn't really appreciably different. There's room for reasonable people to disagree here, but if I had been in his shoes I'd have made the same choice and never looked back.

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Yeah, it's the unlikely but catastrophic downside of a career-ending injury that sells me on it.

I think reasonable minds can differ, though!

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Thanks, I did not know that.

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One thought I had about Mizuhara - it looks like he largely fabricated his resume up until he was hired by the baseball team during Ohtani's rookie year in Japan as a translator for English-speaking players. Is it possible his plan all along was to do whatever he could to get close to Ohtani to use him as a golden ticket? I would imagine people were already talking about Ohtani as a likely mega-star at the time, and Mizuhara seems like the kind of con artist who would attempt something like this.

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Well that and, judging by Ohtani's actions throughout all of this, he recognized Ohtani is a complete bumbling imbecile, with less awareness than the average Kindergartener when it comes to finances and personal relationships.

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I agree with most of the article, but I'd quibble with this, depending on how it is read:

"a level of trust that I’m not sure if it’s healthy to have in anyone except perhaps spouses and other immediate family members (and maybe not even them)."

If you aren't willing to trust your husband or wife with your money, you shouldn't trust her with your heart and your life, either. I'm with you on other immediate family members though. I know my brother would never rob me, but I just wouldn't see the need to give him my bank accounts. If I die, though, he'd be the executor of my estate, so...maybe I am trusting him that much?

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I agree with you 100% on the spouse front, but not everyone is as fortunate as you or I. The fact is, there are plenty of people who are married to people they love but whose financial acumen is at best suspect, and at worst untrustworthy (i.e., husband who buys super expensive golf clubs, or a wife with an addiction to Gucci - I apologize in advance of the stereotyping, it could absolutely be the reverse, the man addicted to Rolex, the woman into Ferraris!).

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It's true. But I think you would still want to START on the right foot and maybe institute stronger financial family rules after there's been a problem (unless you know going in you're marrying someone with a spending problem, gambling problem, just general inability to stick with a budget, etc.).

Real life can always get in the way of the ideal!

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Goodness, yes, absolutely! It's very sad to see couples like this, unable to trust the person you are most close to. I can only imagine the amount of stress it would cause, to busy lives which are stressful enough!

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Hopefully you shouldn't have to. If you both have access to all the accounts you can each log in and know that money isn't disappearing. Being able to see the money also helps with the heart aspect: affairs usually entail expenditures. Just by keeping the eye on cash flow that you should be keeping anyway, even if you are a single adult, you can avoid developing suspicions about each other.

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Here’s what I don’t get about Nate’s second question: Why does it matter what Bowyer’s records say Mizuhara owes him? It’s not like there are other bettors he needs to pay off with that loss — it’s just pure profit for him, right?

Obviously even illegal bookies will have credit limits to prevent them from being St. Petersburg’d. But it’s clear here that Bowyer wasn’t worried about that, and at some point in the texts he effectively waived Mizuhara’s credit limit as long as the weekly $500k checks kept coming in.

That’s probably when the overall paper balance ballooned to $25M or more — Bowyer was probably not really expecting to collect on all of it, but was happy to let Mizuhara keep pretending to bet if it meant the checks kept coming.

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Even if Mizuhara stole $41M, it's plausible for Ohtani not to have noticed.

- The AZ account was opened in 2018. Adding $2M/year to Nate's table gets to $44.5M deposited. That losses approached but didn't exceed this gross amount may not be a coincidence.

- Ohtani's other income & accounts were likely sufficient to cover his lifestyle, including taxes on baseball income.

- He's reported to have historically lived on a $1k/month allowance even while making millions. Even if that's not true, he was probably accumulating significant wealth prior to 2022.

- It's possible that taxes were his largest expense by a mile, but could have been covered by endorsement income. Spending millions requires time (e.g. private jet flights add up, but only if you are taking them frequently) or investing in hard assets, especially ones requiring $s to maintain. There's no indication either applies to Ohtani.

- I wonder if Mizuhara would have been caught if the baseball income spiked before endorsement income.

- The reports sponsorship amounts may be low. FTX paid Brady/Bundchen ~$25M/year, Steph Curry ~$12M per year, and paid Larry David $10M for a single ad. If Ohtani got $10M/year from FTX, the $20/$35M numbers might be right or might be a low estimate.

But it doesn't explain the $16 vs. $41M discrepancy unless the $25 was incurred recently and rapidly, possibly with the bookie having visibility to the account balance to substantiate the line of credit.

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Yeah I just think the story is bullshit and I frankly don't have that much faith in the FBI to get to the bottom of it. I work as a "fixer" on the financial side in the government world, and the quality and thoroughness of government employees (yes even at say the OIG) is...lets say...inconsistent.

People are like "the FBI published this long report" as though the FBI is god or something. It is just regular civil servants doing their jobs, sometimes well, sometimes badly.

The story as laid out above doesn't really pass the smell test and I suspect further digging would turn up more. Also kind of suspicious it is exactly the results the powers that be would want...as you note.

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I’m shocked everyone puts so much trust in the effectiveness and altruism of the Feds. They repeatedly have shown their willingness to work illegally and against the American people if they so choose and think they can get away with it. And also, its not like the FBI has never hired an idiot before. Everyone thinks the FBI is filled with Mulder’s and Clarices.

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Martin - conspiracies and coverups only work when there are one or two people involved. Once you start getting tons of people involved, there's just too many to keep secrets.

You've got to actually think of the real world scenario.

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Back when I was a teen and heard this argument for the first time it convinced me the same as you, Andy, but real life experience + knowledge of real life scandals has taught me otherwise.

There is a million different ways how the investigation can be biased.

If you hand the investigators a fully-made, nice-looking case, there is a good chance they don't look further because that would be work, and who wants to do work?

A higher up can make clear what results he wants without being stupid enough to say anything that can be held against him in court.

Someone early in the chain can outright manipulate the evidence and nobody will find out especially if nobody WANTS to find out.

A toxic work culture holds people back from questioning anything the primary investigators are doing even if it seems fishy (hell, I've even heard the inversion of this, that by not blindly trusting you're coworkers you're creating a toxic work environment!).

Whoever is assigning tasks can appoint someone who they know will deliver the "correct" results, again without actually having to tell them so.

In practice, multiple of these will often be combined.

Naive conspiracy theorists imagine a dark room of hyper-competent villains openly talking about their plans. Naive anti-conspiracy theories correctly notice that this would be dumb and that somebody in the room would backstab everyone else for their own gain. Meanwhile in real life, most people either don't care, are incompetent, do what is expected of them, or refuse to even entertain an idea that goes against their chosen beliefs. A single dedicated, competent person can often steer a project far of from the intended course by exploiting this, and it will be mostly indistinguishable from a conspiracy.

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Frankly - that doesn't check out here for multiple reasons. These aren't local investigators just trying to get through a case, these are federal investigators on an extremely high profile case.

First - and foremost. If you don't think a prosecutor wants to blow open a case with Shohei fucking Ohtani and if there's any leads there won't dig completely on them, then you've actually never met a federal prosecutor. They will challenge assumptions from the investigators if they find holes in it.

Second - you have a alleged criminal here who is openly admitting to the crimes. You have a bookie (also an alleged criminal) who is stating a completely similar story. Then you have a alleged victim (Ohtani) who is stating a completely similar story. There are really no holes to poke. Nate's story is mentioning a couple things in the indictment that seem incredible, but even he admits they're not impossible and they could completely cleared up with more information.

Third - in this case - you would need quite a few people to get involved to make up a story. You'd need 1) The Bookie 2) Ohtani 3) Ippei 4) Some more powerful figure to know the story and pull the strings.

I think you're attempting to say that Ohtani, the Bookie, and Ippei all got their stories straight at some point and then the investigators are too lazy or too inept to poke any holes in that story and that Ippei is willing to go to Federal Prison for a substantial amount of time for his friend?

Maybe it's just the part that Ohtani knew about it and was willing to keep funding his friend's habit - if that's the case, there should be SOME evidence that shows that. But all the conversations on the phone, all the emails from Ippei, etc all support his story completely.

I am sympathetic for your attitude towards people I guess, but in this case, it's bullshit.

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>exactly the results the powers that be

Specifically what powers; and where do they be?

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One more possible explanation (for at least part of the) gap between $16 and $41 million -- namely, Mizuhara greatly increased the size of the bets (and the payments) near the end of the saga. After all, all we know (I think) that there were nine $500,000 transfers sometime back but that very recently there were $1 million and, then $2 million transfers (with the Bookie expanding the credit line accordingly) while Mizuhara greatly increased the size of the bets near the end in an attempt to recoup his losses. Note, this could also explain the seemingly impossible 12%+ loss rate. A bad run on 50 $2 million bets in the final weeks (say 29-30 losers), could explain a lot.

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> 50 $2 million bets in the final weeks

Quite a problem to have, said sarcastically and (after a moment of reflection) completely earnestly.

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