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Ohtani joins long list of scammed athletes and celebrities

Ippei Mizuhara's alleged theft of at least $16 million from his former employer, Los Angeles Dodgers superstar Shohei Ohtani, shocked the sports world, but the story of a celebrity being scammed by a member of his inner circle is as old as time the time.

From Billy Joel to Alanis Morissette to athletes like Dennis Rodman and Mark Sanchez, there is a long list of celebrities and athletes who have lost actual control of their wealth and become victims of people they once trusted.

According to a 2021 report from global accounting and consulting firm EY, professional athletes reported losing nearly $600 million to fraud from 2004 to 2019.

“There is also a group that is very young, has high incomes, which is very unique, and is very focused on their careers. So they ultimately trust,” said Chase Carlson, a Florida attorney who specializes in representing professional athletes and entertainers who are victims of investment fraud or mismanagement. “They have to choose someone they can trust. And unfortunately people take advantage of that trust.”

Mizuhara was known as Ohtani's interpreter and worked closely with him during Ohtani's six years in the Major Leagues. But Mizuhara's relationship with Ohtani went far beyond the clubhouse and included tasks such as driving him around, completing his daily tasks and handling certain business and personal matters outside of baseball. Federal authorities said Mizuhara was Ohtani's “de facto manager and assistant.”

According to an affidavit filed by federal authorities last week, Mizuhara stole millions of dollars from an account he opened to Ohtani in 2018. Mizuhara is alleged to have used the money to pay off gambling debts he racked up at an illegal bookmaking operation in Southern California.

Ohtani said he never gave Mizuhara control of his accounts, but Mizuhara allegedly told Ohtani's other advisers and accountants – none of whom speak Japanese – that Ohtani had denied them access to the account, according to the affidavit. Federal authorities also allege that Mizuhara falsely identified himself as Ohtani to use “deception and deceit” to get bank employees to approve transfers to the illegal bookmaking firm.

“There are these financial advisors and executives who were bad actors,” said Anthony Smalls, head of entertainment, sports and media at MGO, a global accounting firm. “But for the most part, we find that they are their trusted friends [and] Family members most commonly found to be able to bypass approval processes.”

Some examples are:

  • In 1989, Billy Joel sued his former manager Frank Weber – who was also his ex-wife's brother and the godfather of his eldest daughter – for $90 million, alleging, among other things, fraud and breach of fiduciary duty. Joel eventually settled out of court after Weber filed for bankruptcy.
  • In 2017, Alanis Morissette's former business manager was sentenced to six years in federal prison after withdrawing $4.8 million from the Canadian entertainer's account without her knowledge. The manager, Jonathan Schwartz, also embezzled nearly $2 million from two other clients, prosecutors said.
  • Peggy Ann Fulford defrauded NBA Hall of Famer Dennis Rodman, former NFL player Ricky Williams and other athletes out of millions of dollars by falsely claiming she was a Harvard-trained financial advisor. In 2018, she pleaded guilty to interstate transportation of stolen property, was sentenced to 10 years in prison and ordered to pay $5.8 million in restitution to her victims. Fulford was released early from her sentence in 2023.
  • Federal authorities charged a former Morgan Stanley adviser, Darryl Cohen, with three separate counts of fraud in 2023 after he allegedly defrauded NBA players Jrue Holiday, Chandler Parsons and Courtney Lee out of $5 million. For each of the two counts of wire fraud, the maximum penalty is 20 years; for the case of investment advisor fraud, the maximum sentence is five years. In a statement to ESPN, an attorney representing Cohen said: “Mr. Cohen has pleaded not guilty and continues to vigorously fight these allegations. The trial is scheduled for February.”
  • Former San Antonio Spurs star Tim Duncan accused a former financial advisor of defrauding him of more than $20 million. In 2018, a judge ordered Charles Banks IV to pay $7.5 million in restitution.
  • Former San Francisco Giants pitcher Jake Peavy, former NFL quarterback Mark Sanchez and other athletes were “secretly” defrauded of more than $30 million by Ash Narayan, an investment advisor [siphoned]“Money was withdrawn from their accounts using forged or unauthorized signatures,” federal authorities said in 2016. Narayan pleaded guilty in 2019 to submitting fraud and signing a false tax return, was sentenced to over three years in federal prison and ordered to pay $18.8 million in restitution.

Smalls said many athletes tend to divide responsibilities among different members of their team, which creates silos and in turn leads to a lack of transparency in roles. Ideally, the assembled team should meet with the athlete or entertainer at regular intervals to ensure a closed circle that allows for checks and balances, Smalls said.

“Of course, anything can happen in any scenario, but the likelihood of six different disciplines working together to cause a bad act is much lower than someone who is able to operate within their silo with autonomy and do so “can do in its area,” and that area has no mechanism that touches another area,” he said.

Athena Constantinou, director of international operations at the Sports Financial Literacy Academy, said most of these incidents were due to a lack of financial literacy.

“If athletes were financially literate, they would know better than to leave their finances to anyone,” Constantinou said. “Because your advisors are responsible for informing you about your options. But you are the one who makes the final decisions and you are the one who bears the consequences.”

Constantinou said leagues and players' associations had a duty to provide financial education to their players.

The NFL Players Association (NFLPA) requires that agents and financial advisors be registered with the association and meet a list of educational and professional experience, as well as background checks and examinations.

Agents maintain NFLPA certification by paying an annual fee, attending a seminar, purchasing professional liability insurance from an approved provider and negotiating at least one player contract within a three-year period. The NFLPA also has regulations and a code of conduct for players' financial advisors.

The NBPA and MLBPA do not have certification requirements for financial advisors, but do have regulations for player agents. The MLBPA also certifies Minor League Agents, Limited Certified Agents and Expert Agent Advisors.

Zach Miller, a former NFL player who won the Super Bowl with the Seattle Seahawks in 2014, recalled signing his first contract relying on his father's recommendation from an agent. Miller is now a certified financial planner and private wealth advisor at AWM Capital, a family wealth management office. He said that while mandatory training sessions could be helpful, it could be difficult to engage players in financial literacy until they have some experience managing their money.

“It’s no different than your job on the NFL field. Either you win your one-on-one games, do your tasks correctly, and do all of these things. That’s what you need to do for your money,” Miller said. “You have to know how much taxes you pay. You need to know how much you have saved this year. Very few players even know how much money they spend each year. This is the craziest thing.”

Ideally, in addition to an agent, an athlete should also surround himself with a certified financial planner, a tax advisor, an independent registered investment advisory group and a personal attorney who will read any contracts he signs, said Erik Averill, a former professional baseball player and co-founder of AWM Capital .

However, ultimately the responsibility falls on the athlete or celebrity to know their cash flow, he said, and that lack of knowledge about withdrawing funds from an account is “unacceptable.”

“This is your money and you own it all,” he said. “So you can hire a lot of people to do a lot of things, but you can never delegate responsibility for the bottom line of your finances and your withholdings.”

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