Living High On The Hog

YASUYOSHI KATO WAS NO ORDINARY salaryman. As chief financial officer of Day-Lee Foods, a meatpacking company in Santa Fe Springs, Calif., the Japanese executive dressed in Armani suits, tooled around Los Angeles in a Mercedes and flew to Las Vegas for weekends. He bought a $3 million estate and a 250-acre citrus ranch. He lavished money on several women, notably his estranged wife Doris Ann Kato. ""Yoshi's'' generosity allowed Mrs. Kato to sate her appetite for Ferraris, Arabian stallions and Tiffany jewelry. The disparity between the family's ostentatious life and Yoshi's $150,000 salary led to questions, and Mrs. Kato reportedly explained sometimes by confiding that Yoshi was secretly the inventor of Nintendo.

Actually, Yoshi Kato's hidden specialty was embezzlement. In 1989 or 1990, Kato began writing modest checks to himself on accounts at Day-Lee Foods. He did not stop until March 1997, when Internal Revenue Service agents arrested him. By then, prosecutors estimate, he'd cost Day-Lee a staggering $100 million: $62 million for himself and an additional $38 million to cover his tracks. Prosecutors believe that makes Kato the biggest embezzler in American history. Next month he begins serving a 63-month sentence, in exchange for a guilty plea to federal charges of wire and bank fraud, and filing false tax returns. His motivation was uncomplicated, federal prosecutor Mike Zweiback believes: ""Greed.''

Embezzlers tend to hide behind billowy smoke screens of offshore accounts and confusing aliases. Not Kato. He simply made out checks to himself on Day-Lee's account and deposited them at his ATM. ""The fraud was outlandish in its simplicity,'' says Nathan Hochman, a former federal prosecutor acting as a court-appointed receiver. To avoid detection, he used only handwritten checks, skipping the computer-generated variety, which company auditors routinely scanned. Using lines of credit to replace the missing cash, he then concealed the loans by cooking the company's books. It worked. For seven years, Day-Lee colleagues suspected nothing. Neither did executives at the parent company, the Osaka-based Nippon Meat Packers, a $7 billion powerhouse that also sponsors a baseball team called the Nippon Ham Fighters. ""We might have trusted him too much,'' a Nippon spokesman says.

Money transformed the drab, mustached exec in the 40-short suits. Kato became a rich guy with $20,000 casino accounts at two Vegas hotels, four sets of golf clubs and plenty left over to lavish on women. He lent $200,000 to a female friend's Torrance nightclub, Club Cha Cha, and bought Lexuses and condos for other girlfriends, according to prosecutors. He became partner and financier to a Century 21 real-estate office. Criminal cunning is evidently unrelated to acumen in real estate: he overpaid and bought in bad neighborhoods. ""Imagine the worst investments you can think of, and that's what he did,'' says Martin Laffer, a receiver.

He also lavished money on Doris Kato. The two married in 1984 and split in 1991, while Yoshi's depredations were still relatively modest. Doris Kato asserts in court filings that she had no idea her husband was stealing, and she has not been charged with a crime. (Neither Doris Kato nor her lawyer agreed to be interviewed.) But when the couple split, she and Yoshi agreed that he would pay her $600,000-a-year temporary family support--four times his salary. As it happened, he came to pay her as much as $5 million a year.

The money financed Mrs. Kato's taste for luxury. She bought her bags at Vuitton, her jewels at Van Cleef & Arpels. At home, she had a staff of nine, including round-the-clock bodyguards. She bought a string of 20 Arabian horses. In the yard, she kept emus and llamas, potbellied pigs and miniature cattle. ""She wanted to set up a petting zoo,'' Assistant U.S. Attorney Faith Devine believes. That might account for the pair of Hyacinth macaws, but why did she keep leopard sharks in 10-foot aquariums? Officials even found a pair of nurse sharks in a children's swimming pool in the garage. Her biggest money loser was a high-end used-car operation. She sank an estimated $2.4 million into a fleet that included a Rolls and a rare 1973 Daytona Spyder Ferrari.

Yoshi Kato is headed to prison. Federal prosecutors won't say whether Doris Kato or others are targets of an ongoing criminal probe. A small army of attorneys is laboring to recoup as much of the money as possible for Day-Lee and Nippon, where officials were fired, demoted and given hefty pay cuts. Doris has moved out of the house, and her belongings, as well as Kato's, are being sold by the court-appointed receivers. So far, they've recovered only $2.5 million, and experts don't expect them to collect more than $7 million. Perhaps the final oddity of Yoshi Kato's spree is that he didn't squirrel away vast sums. ""It was all just spent, frivolously spent,'' marvels prosecutor Devine. ""He's just blown it all.''

Uncommon Knowledge

Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.

Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.

About the writer


To read how Newsweek uses AI as a newsroom tool, Click here.

Newsweek cover
  • Newsweek magazine delivered to your door
  • Newsweek Voices: Diverse audio opinions
  • Enjoy ad-free browsing on Newsweek.com
  • Comment on articles
  • Newsweek app updates on-the-go
Newsweek cover
  • Newsweek Voices: Diverse audio opinions
  • Enjoy ad-free browsing on Newsweek.com
  • Comment on articles
  • Newsweek app updates on-the-go