The sports world was astonished to learn that Ippei Mizuhara had allegedly stolen at least $16 million from Los Angeles Dodgers phenom Shohei Ohtani, but the tale of a famous person being duped by a member of their inner circle is as ancient as history, There is a lengthy list of celebrities and athletes, from Dennis Rodman and Mark Sanchez to Billy Joel and Alanis Morissette, who lost effective control of their assets and were duped by people they had trusted.
Professional athletes said in a 2021 report published by international accounting and consulting firm EY that they lost close to $600 million as a result of fraud between 2004 and 2019. The study also revealed that fraud was increasing in tandem with players’ rising endorsement and salary revenue, There’s also a very young, extremely well-paid group that is highly focused on their jobs and extremely unique. Thus, in the end, they have faith,” stated Chase Carlson, a, An attorney from Florida with expertise in defending entertainers and professional athletes who have fallen prey to financial fraud or poor management practices. “They need to decide who they can trust. Unfortunately, some people abuse that confidence.
Having worked closely with Ohtani throughout his entire six-year major league career, Mizuhara was well recognized for being the baseball player’s interpreter. However, Mizuhara’s relationship with Ohtani went far beyond the clubhouse and encompassed duties like taking care of his everyday activities, driving him about, and addressing some personal and professional problems that weren’t related to baseball. Mizuhara was identified by federal investigators as Ohtani’s “de facto manager and assistant.”
Federal prosecutors submitted an affidavit last week alleging that Mizuhara misappropriated millions of dollars from an account that he assisted Ohtani in opening in 2018. Mizuhara is accused of using the funds to pay off debts he accrued from gambling through an illicit bookmaking business in southern California.
Although Ohtani claims that he never granted Mizuhara access to his accounts, the affidavit claims that Mizuhara informed Ohtani’s other advisors and accountants—none of whom know Japanese—that Ohtani had refused to grant them access to the account. In addition, according to federal officials, Mizuhara impersonated Ohtani in order to “trick and deceive” bank staff into agreeing to wire funds to the illicit bookmaking enterprise.
“There are those business managers and financial advisors who have been dishonest,” stated Anthony Smalls, worldwide accounting firm MGO’s head of entertainment, sports, and media. “But for the most part, we find that it’s their trusted friends [and] family members that are most often discovered as the folks who can circumvent approval processes, Among the instances are:
Billy Joel filed a $90 million lawsuit in 1989 against Frank Weber, his former manager and the brother of his ex-wife and godfather of his oldest daughter. Among other things, Billy Joel claimed that Weber had violated his fiduciary duties and committed fraud. Joel finally reached an out-of-court settlement following Weber’s bankruptcy filing.
In 2017, the Canadian musician Alanis Morissette’s former business manager was sentenced to six years in federal prison for secretly withdrawing $4.8 million from her account. Prosecutors said that the manager, Jonathan Schwartz, stole about $2 million from two more clients.
Claiming to be a Harvard educated financial consultant, Peggy Ann Fulford conned former NFL star Ricky Williams, NBA Hall of Famer Dennis Rodman, and other athletes out of millions of dollars. She entered a guilty plea to one count of interstate transportation of stolen property in 2018, received a 10-year jail sentence, and was mandated to reimburse her victims $5.8 million. In 2023, Fulford was given an early release from prison.
In 2023, federal prosecutors filed three separate fraud charges against Darryl Cohen, a former Morgan Stanley adviser, alleging that he had scammed NBA stars Courtney Lee, Jrue Holiday, and Chandler Parsons of $5 million. The maximum punishment for each of the two wire fraud counts is twenty years, and the maximum term for the investment adviser fraud count is five years. Cohen’s lawyer stated, “Mr. Cohen has pleaded not guilty and continues to vigorously fight these allegations,” in a statement to ESPN. February is when the trial is set to take place.
Tim Duncan, a former player for the San Antonio Spurs, claimed that a previous financial advisor had defrauded him of over $20 million. Charles Banks IV was ordered by a judge to pay $7.5 million in restitution in 2018.
Federal authorities claimed in 2016 that Ash Narayan, an investment adviser, “secretly [siphoned]” money from the accounts of former San Francisco Giants pitcher Jake Peavy, former NFL quarterback Mark Sanchez, and other athletes, defrauding them of more than $30 million. In 2019, Narayan admitted to wire fraud and filing a fraudulent tax return. He was given a sentence of more than three years in federal prison as well as an order to pay $18.8 million in restitution.
According to Smalls, a common practice among sportsmen is to divide up team duties among several players, which leads to the formation of silos and a lack of clarity in tasks. According to Smalls, a closed circle with checks and balances should be ensured by the assembled team meeting with the athlete or performer on a frequent basis.
Of course, anything can happen in any situation, but it is much less likely that six different disciplines will work together to commit a crime than it is for an individual with autonomy to act independently in their own area without having any mechanisms affecting other areas,” the speaker stated.
The majority of these events, according to Athena Constantinou, director of international operations at the Sports Financial Literacy Academy, are the result of a lack of financial literacy.
“If athletes were financially literate, they would know better than to hand over their finances to anyone,” Constantinou stated. “Because it is your counselors’ responsibility to inform you of your possibilities. However, you are the one who makes the final choices and is responsible for the consequences.”
According to Constantinou, it is the responsibility of leagues and players associations to provide its players with financial education.
Agents and financial advisors are required to register with the NFL Players Association (NFLPA), fulfill a series of requirements related to education and work experience, background checks, and exams.
Agents must pay an annual fee, complete an annual seminar, obtain professional liability insurance from a recognized provider, and negotiate at least one player contract in a three-year period in order to keep their NFLPA certification. Financial advisors to players are subject to rules and a code of conduct set forth by the NFLPA.
Financial advisers are not required to be certified by the NBPA or MLBPA, but player agents are subject to rules. Expert agent advisers, limited certified agents, and minor league agents are also certified by the MLBPA.
Former NFL player Zach Miller, who won a Super Bowl with the Seattle Seahawks in 2014, remembered signing his first contract and depending on his father’s broker suggestion. Miller is currently employed at wealth management family firm AWM Capital as a private wealth adviser and certified financial planner. He noted that while required education programs might be beneficial, it might be challenging to engage players in financial literacy unless they have some money management expertise.
It is identical to your work on the NFL field. Either you’re doing your responsibilities accurately, winning one-on-one meetings, or accomplishing all three things. You have to take care of your finances as well,” Miller stated. You must be aware of your tax liability. You ought to be aware of the amount you saved that year. The amount of money that gamers spend annually is actually unknown to very few of them. It’s absolutely insane.”
According to Erik Averill, a former professional baseball player and co-founder of AWM Capital, an athlete should ideally surround themselves with a certified financial planner, a tax certified public accountant, an independent registered investment advisory group, and a personal attorney to review through all contracts they sign, in addition to an agent.
Still, he noted, it is ultimately the athlete’s or celebrity’s responsibility to understand their financial flow, and that ignorance about money leaving an account is “unacceptable.”
You own everything and this money belongs to you,” he declared. “So, you can hire a lot of people to do a lot of things, but you can never transfer the responsibility for the ultimate result of your finances and your withholding.”