Connect with us

Published

on

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 getting fleeced by a member of his inner circle is a tale as old as time.

From Billy Joel to Alanis Morissette to athletes including Dennis Rodman and Mark Sanchez, there’s a long list of celebrities and athletes who lost effective control of their assets and found themselves victimized by people they once trusted.

According to a 2021 report from global accounting and consulting firm EY, professional athletes alleged they lost nearly $600 million due to fraud from 2004 through 2019. The research also showed that fraud was growing as athletes’ income from endorsements and salaries also rose.

“You also have a group that’s very young, with high earnings, which is very unique, and they’re very focused on their careers. And 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 somebody to trust. And unfortunately, people take advantage of that trust.”

Mizuhara was well known for being Ohtani’s interpreter, working closely with him during Ohtani’s six years in the major leagues. But Mizuhara’s relationship with Ohtani stretched well beyond the clubhouse and included responsibilities such as driving him around, handling his daily tasks and managing 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 helped Ohtani open in 2018. Mizuhara allegedly used the money to cover gambling debts he amassed with 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 “trick and deceive” bank employees into authorizing wire transfers to the illegal bookmaking operation.

“You have those financial advisers and business managers that have been bad actors,” said Anthony Smalls, the head of entertainment, sports and media for MGO, a global accounting firm. “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.”

Some examples include:

  • In 1989, Billy Joel sued his former manager Frank Weber — who was also his ex-wife’s brother and his oldest daughter’s godfather — for $90 million, claiming fraud and breach of fiduciary duty, among other allegations. Joel eventually settled out of court after Weber declared bankruptcy.

  • In 2017, the former business manager for Alanis Morissette was sentenced to six years in federal prison after he withdrew $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 duped NBA Hall of Famer Dennis Rodman, former NFL player Ricky Williams and other athletes out of millions of dollars by falsely claiming that she was a Harvard-educated financial adviser. In 2018, she pleaded guilty to one count of 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 different counts of fraud in 2023 after he allegedly defrauded NBA players Jrue Holiday, Chandler Parsons and Courtney Lee out of $5 million. Each of the two counts of wire fraud carries a maximum sentence of 20 years, and the count of investment adviser fraud has a maximum five-year sentence. In a statement to ESPN, an attorney representing Cohen said, “Mr. Cohen has pleaded not guilty and continues to vigorously fight these allegations. Trial is scheduled for February.”

  • Former San Antonio Spurs star Tim Duncan accused a former financial adviser of scamming him out 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 cheated out of more than $30 million by Ash Narayan, an investment adviser who “secretly [siphoned]” money from their accounts using forged or unauthorized signatures, federal authorities said in 2016. Narayan pleaded guilty in 2019 to wire fraud and subscribing to a false tax return, was sentenced to over three years in federal prison and ordered to pay $18.8 million in restitution.

Smalls said that many athletes have the tendency to split responsibilities between different members of their team, which creates silos and in turn leads to a lack of transparency in roles. Ideally, the assembled team should be meeting with the athlete or entertainer at regular intervals, ensuring a closed circle that allows for checks and balances, Smalls said.

“Of course anything can happen in any scenario, but the chances of six different disciplines colluding together to cause some kind of bad act is a lot less likely than someone who’s able to operate in their silo with autonomy being able to do it in their area and that area not have a mechanism that touches another area,” he said.

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

“If athletes were financially literate, they would know better than to hand over their finances to anyone,” Constantinou said. “Because, your advisers, they have the role of informing you about your options. But you are the one who is making the final decisions, and you are the one who bears the repercussions.”

Constantinou said that leagues and players associations have a duty to give their players a financial education.

The NFL Players Association (NFLPA) requires agents and financial advisers to be registered with the association, meeting a list of educational and work experience, background checks and examinations.

Agents maintain NFLPA certification by paying an annual fee, attending a seminar, obtaining professional liability insurance from an approved carrier, 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 advisers.

The NBPA and MLBPA do not have certification requirements for financial advisers but do have regulations for player agents. The MLBPA also certifies minor league agents, limited certified agents and expert agent advisers.

Zach Miller, a former NFL player who won the Super Bowl with the Seattle Seahawks in 2014, recalled signing his first contract and relying on his dad’s recommendation of a broker. Miller is now a certified financial planner and private wealth adviser at AWM Capital, a wealth management family office. He said that while mandatory educational sessions might be helpful, engaging players on financial literacy might be hard until they have some experience managing their money.

“It’s no different than your job on the NFL field. You’re either winning your one-on-ones, doing your assignments correctly, doing all those things. You got to do that for your money, too,” Miller said. “You got to know how much you’re paying in taxes. You got to know how much you saved that year. Very few players actually even know how much money they spend each year. It’s the wildest thing.”

Ideally, besides an agent, an athlete should surround themselves with a certified financial planner, a tax certified public accountant, an independent registered investment advisory group and a personal attorney to read through all contracts they sign, said Erik Averill, a former professional baseball player and co-founder of AWM Capital.

But ultimately, the onus falls back on the athlete or celebrity to know their cash flow, he said, and that a lack of knowledge about money leaving an account is “unacceptable.”

“This is your money, and you own everything,” he said. “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.”

Continue Reading

Sports

Canes’ Andersen, 35, secures deal before Round 2

Published

on

By

Canes' Andersen, 35, secures deal before Round 2

RALEIGH, N.C. — The Carolina Hurricanes have signed goaltender Frederik Andersen to a one-year contract for next season, worth $2.75 million for the 35-year-old veteran.

General manager Eric Tulsky announced the deal Saturday, a little over 48 hours before his team starts the second round of the playoffs against the Washington Capitals.

Andersen could earn up to $750,000 in incentives for games played and his participation in a potential run to the Eastern Conference finals next season. He would get $250,000 for playing 35 or more games, another $250,000 for getting to 40 and $250,000 if the Hurricanes reach the East finals and he plays in at least half of the playoff games.

“Frederik has played extremely well for us and ranks in the top 10 all-time for winning percentage by an NHL goalie,” Tulsky said. “We’re excited that he will be staying with the team for next season.”

Andersen and the Hurricanes, the No. 2 seed in the Metropolitan Division, advanced past the New Jersey Devils in Round 1 last week. They will meet the Capitals, who won the division crown, for the right to make the NHL’s final four.

Extending Andersen could give the team a goaltending tandem with Pyotr Kochetkov for less than $6 million combined.

Anderson, a Denmark native who previously played for the Anaheim Ducks and Toronto Maple Leafs, has become coach Rod Brind’Amour’s most trusted option in net. He is expected to return to the starting role for Game 1 of the Capitals series after getting injured in the first round against New Jersey.

The Associated Press contributed to this report.

Continue Reading

Sports

Sovereignty outduels Journalism to capture Derby

Published

on

By

Sovereignty outduels Journalism to capture Derby

LOUISVILLE, Ky. — Sovereignty outdueled 3-1 favorite Journalism down the stretch to win the 151st Kentucky Derby in the slop on Saturday.

Trainer Bill Mott won his first Derby in 2019, also run on a sloppy track, when Country House was elevated to first after Maximum Security crossed the finish line first and was disqualified after a 22-minute delay.

This time, he knew right away.

Sovereignty won by 1½ lengths and snapped an 0-for-13 Derby skid for owner Godolphin, the racing stable of Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum.

It was quite a weekend for the sheikh. His filly, Good Cheer, won the Kentucky Oaks on Friday and earlier Saturday, Ruling Court won the 2,000 Guineas in Britain.

Sovereignty covered 1¼ miles in 2:02.31 and paid $17.96 to win at 7-1 odds.

Journalism found trouble in the first turn and jockey Umberto Rispoli moved him to the outside. He and Sovereignty hooked up at the eighth pole before Sovereignty and jockey Junior Alvarado pulled away.

Baeza was third, Final Gambit was fourth and Owen Almighty finished fifth.

Rain made for a soggy day, with the Churchill Downs dirt strip listed as sloppy and horse racing fans protecting their fancy hats and clothing with clear plastic ponchos.

The Associated Press contributed to this report.

Continue Reading

Sports

Zilisch to miss Xfinity race in Texas after wreck

Published

on

By

Zilisch to miss Xfinity race in Texas after wreck

FORT WORTH, Texas — Connor Zilisch, the 18-year-old driver already with two NASCAR Xfinity Series race wins, will miss Saturday’s race at Texas because of lower back injuries sustained in a last-lap wreck at Talladega.

Trackhouse Racing said Wednesday that its development driver will return as soon as possible to the No. 88 JR Motorsports Chevrolet. The team didn’t provide any additional details about Zilisch’s injuries.

Cup Series regular Kyle Larson will drive the No. 88 in Texas. After that, the Xfinity Series has a two-week break before racing again May 24 at Charlotte.

Zilisch, sixth in points through the first 11 races, was driving for the win at Talladega Superspeedway when contact on the backstretch sent his car spinning, and head-on into inside wall.

Zilisch won in his Xfinity debut at Watkins Glen last Sept. 14. He added another win this year at Austin, the same weekend that he made his Cup Series debut. He has six top-10 finishes in his 15 Xfinity races.

Continue Reading

Trending