High Roller’s Past, Fortunes Fueled Probes


High roller Ken Mizuno is an enduring legend in this town, even though no one seems to know who he really is.

Casino insiders consider him the biggest high-stakes player in history, with unconfirmed reports of gambling losses going as high as $60 million.

Employees and business associates in California describe him as a generous, courteous and charismatic gentleman. He gave them free rides to Las Vegas in his personal corporate jet, tipped card dealers lavishly--even when he was losing--and wrote thank you notes to hotel housekeepers.

Police in Japan regard him as a con man, the quintessential bunco artist who allegedly conspired to swindle nearly $1 billion from a legion of gullible investors in a pyramid scheme involving golf club memberships.


And U.S. law enforcement officials believe that he is a money launderer. He is suspected of funneling about $250 million in ill-gotten gains from Japan into the United States and using some funds to invest in real estate in Palm Springs and Nevada. Search warrants executed at a casino suggest that they are also probing whether Mizuno used the money to pay off gambling debts--or, conversely, tried to use gambling debts to launder cash.

Indicting Mizuno would be a landmark for U.S. investigators, who for nearly a decade have been issuing stern warnings that criminally tainted money was flowing into the United States from Japan, hidden in a wave of legitimate investment.

Now on trial in Tokyo for fraud and tax evasion, Mizuno, 59, was identified as an “associate” of the yakuza , or Japanese criminal gangs, in a report issued in December by a U.S. Senate subcommittee probing Asian organized crime.

But Mizuno is a more complicated character than that: a bigger-than-life Japanese antihero with Charles H. Keating Jr.'s flair for avarice, Michael Milken’s knack for philanthropy, and a reputation equal to some American celebrities for palling around with mobsters.


“He was the courtliest, most gentlemanly, the kindest of them all,” said Stephen A. Wynn, chairman of Mirage Resorts, which owns the casino where Mizuno had been a regular at the baccarat table before his arrest in Japan a year ago.

The Las Vegas Review Journal has estimated Mizuno’s baccarat losses at about $60 million from 1989 to 1991.

In keeping with the rule of dealer-client privilege, Wynn declined to comment on the vicissitudes of Mizuno’s fortunes at the Mirage, where federal agents in June executed a search warrant for financial records relating to his gaming activities.

“Ken Mizuno never owed us money, any money. He paid promptly and in full,” Wynn said. “He is a very honorable man.”


Yet Mizuno had a checkered past, and it haunted him during his early visits to the United States.

Many longtime observers of the Las Vegas scene believe that Mizuno might have become the first foreigner to buy and operate a casino in Nevada if it were not for allegations of his yakuza ties, which surfaced here when he applied for a county liquor license in 1982.

A Japanese thug once bashed Mizuno on the head with a heavy glass ashtray, putting him in the hospital, Las Vegas police learned.


Mizuno also conducted business with members of a yakuza group that swindled and extorted money from him, according to documents in his application file.

The liquor license initially was denied because, as one Clark County commissioner put it at the time, Mizuno might “continue to be extorted by the yakuza and organized crime and . . . will continue to live in fear and succumb to their wishes.”

Mizuno emphatically denied any alliance with the yakuza , submitting a batch of character references--including a letter from Toshio Yamaguchi, a member of the lower house of Japan’s Parliament and a ranking lieutenant in the ruling Liberal Democratic Party.

The liquor license was awarded on appeal, allowing the politically savvy entrepreneur to serve alcohol at Mizuno’s Restaurant, the teppan-yaki steakhouse he ran at the Tropicana Hotel, where Mizuno also operated a health spa. (Ken Mizuno and his companies, it should be noted, have no relation to Mizuno Corp., the Osaka-based sporting goods manufacturer.)

Mizuno’s primary business in Japan was rescuing financially distressed golf course projects, and he retained the stigma of his yakuza associations. After all, it would have been difficult to operate in Japan’s shady world of golf course development without dealing with mobster land sharks and underground money lenders, say knowledgeable observers of the scene.

His name remained on U.S. customs and immigration watch lists, and he occasionally got the third degree when entering the United States.

One law enforcement official, speaking on the condition of anonymity, recalled an incident in 1989 when Mizuno arrived at Los Angeles International Airport with an entourage of more than 120 of his employees and friends from Japan on their way to a party in Las Vegas.

The boss was pulled aside, suspected as an illegal immigrant. But Mizuno, who speaks fractured English, danced deftly out of trouble with a sheaf of documents--including one on U.S. Customs Service stationery.


“He was very nice and wasn’t angry or upset, even though he might have lost a great deal of face,” the law enforcement official said. “In fact, he turned the situation around and made it look like he was getting VIP treatment.”

It was that same Las Vegas party in the spring of 1989 that marked the beginning of a new phase of U.S. activity for Mizuno.

By that time, Mizuno and his confederates in Japan had made headway selling memberships in the Ibaraki Country Club, a golf course under construction about two hours north of Tokyo, which would become the focus of his alleged financial malversations.

In a sales brochure, the developers assured investors that membership would be limited to 2,830. But Mizuno’s brokers sold 52,000 memberships, raking in nearly $1 billion, according to Japanese press reports.

So it was that Mizuno was in a particularly magnanimous mood during the Japanese Golden Week holiday in 1989. He turned his celebrity-studded party, attended by the mayor of Las Vegas and other local dignitaries, into the first of three annual fund-raisers for the Philadelphia Childrens Hospital.

Altogether, Mizuno raised or donated $1.3 million for research in sickle cell disease. The hospital dedicated a wing to him: the Ken Mizuno Research Laboratory.

“Ken Mizuno has been a good friend of this hospital,” spokesman Pat Rocchi said. “The money he raised has gone to help children who wouldn’t have gotten help otherwise.”

Mizuno started spending more than half his time in the United States in 1989. In September, he bought a golf course in Henderson, south of Las Vegas, renamed the Royal Kenfield Country Club. In May, 1990, he purchased the Indian Wells Hotel and Country Club near Palm Springs, acquiring a venerable golf course that is one of the sites for the PGA’s Bob Hope Desert Classic.

Both properties were seized by federal agents last summer, along with K.M. Aviation, which operated Mizuno’s private DC-9.

Together with his Olomana Golf Links in Hawaii, which he acquired in 1981 and which was not seized, the value of Mizuno’s U.S. assets totaled nearly $400 million, according to filings at the bankruptcy court in Tokyo.

He had jumped on the Japanese bandwagon of investing in U.S. real estate--and taken his gambling binges to new heights--just as the speculative bubble in land values was about to burst back home. By the time Japanese tax authorities started looking into his golf membership sales scheme in 1991, Japan was on the road to severe financial troubles.

Mizuno’s real weakness was baccarat, a fast-paced card game akin to blackjack; he would play for hours, part of an exclusive club of Japanese devotees who bet more than $100,000 on a single hand.

“In the end, maybe he was doing us a favor,” said George Togliotti, an FBI agent in Las Vegas. “He was coming over here and losing his ass.”


Ken Mizuno was not always Ken Mizuno. He used to be Takeshi Arai.

Mizuno took on his wife’s surname when he married Taeko Mizuno, the daughter of a prominent politician in the city of Takamatsu. Adopting sons-in-law is common in Japanese families without male heirs. But in Mizuno’s case it opens sensitive questions about his true origins.

U.S. and Japanese law enforcement officials say Mizuno is by birth a Korean resident of Japan. To a large extent, Koreans in Japan have assimilated, typically adopting Japanese names and sometimes becoming naturalized citizens. But they remain subject to widespread discrimination.

Mizuno’s ancestry is significant to law enforcement investigators because of his links to Toa Yuai Jigyo Kumiai, a yakuza gang led by ethnic Koreans, which law enforcement officials say is active in Southern California.

Mizuno had many ethnic Korean friends, according to his business associates, but carried a Japanese passport. He told friends that his father served in Manchuria in World War II as a Japanese Imperial Army officer, a status that would have been denied to someone of known Korean origin.

A trusted business associate, who asked not to be identified, recalls that Mizuno told the tale of entering Japan from Korea after the war at age 10. Mizuno’s mother had returned to Japan and his father was captured by the Soviets and shipped off to a Siberian prison camp, the story went.

Young Ken joined a group of other abandoned Japanese children in Manchuria and walked several hundred miles to a seaport in the liberated Japanese colony of Korea for repatriation to Japan, the business associate said.

Yet in a sworn affidavit given to U.S. officials when he visited in March, 1987, Mizuno said he was born in Utsunomiya, in Japan’s Tochigi Prefecture.

He told authorities his original name was Takeshi Mizuno, not Ken Mizuno. (Ken and Takeshi are alternative readings of the same Chinese character, meaning “health.”) He did not mention his Korean ancestry or adopting his wife’s surname.

Mizuno remains incarcerated and could not be reached in Japan. His wife, who lives in Hawaii, declined through her lawyer to be interviewed.

Not all of Mizuno’s past is in dispute. He was a star high school baseball player in Takamatsu and went on to pitch for Waseda University and for the Kintetsu Pearls professional baseball team, according to documents he submitted to the Clark County Liquor and Gaming Licensing Board.

An injury to his arm cut short his pro baseball career in his rookie year. Mizuno became a pro scout, a job that brought him to Las Vegas for his first visit in 1961.

Also that year, Mizuno started his own business, Mizuno Shoji, a trading company that bought several small hotels. He plunged into golf course development under the corporate name Mizuno Kogyo, a firm whose “special expertise” was in acquiring financially distressed golf course projects, infusing cash and finishing construction.

Perhaps foreshadowing the alleged pyramid scheme now being prosecuted in Japan, Mizuno explained in one document how he routinely commingled funds held in trust by his various subsidiaries: “Mizuno Kogyo can put together the necessary funds by use of surplus membership deposits collected at other Mizuno Group golf courses and its other financial resources.”

It appears likely, however, that Mizuno’s American employees had no involvement in or knowledge of the business back in Japan, which was the purview of Ken International, a Tokyo-based holding company. The transfer of tens of millions of dollars from the alleged golf membership scam in Japan did not raise eyebrows, one manager said, because Mizuno was assumed to be fabulously wealthy.

“When the bubble economy was at its peak in 1989 and 1990, a lot of big Japanese investors used to transfer $40 million to $50 million easily,” he said. “It didn’t look suspicious to us at all.”

U.S. prosecutors, working with a federal grand jury in Las Vegas, are expected to decide this spring whether to indict Mizuno on money-laundering charges.

It is not clear whether Mizuno’s business associates will be targeted in a second stage of the investigation. IRS and U.S. Customs agents last year searched the homes and offices of Tsutoshi (Joe) Myojo, the president of Mizuno’s two U.S. property management companies, Tiburon-based Universal Express and Los Verdes West in Indian Wells. Myojo invoked his 5th Amendment right to remain silent when called before the federal grand jury in Las Vegas, a knowledgeable source said.

Myojo’s lawyer, Gordon A. Greenberg of Los Angeles, declined comment on the case and said his client was not available.

U.S. law enforcement officials say they have obtained unprecedented cooperation from the usually secretive Japanese police in their investigation of Mizuno’s alleged money laundering. Japan’s Finance Ministry has identified about $250 million in fraudulent funds he transferred to U.S. banks.

Mizuno apparently felt no qualms about the bank transfers; he used accounts under his own name and dutifully filled out customs forms when he carried more than $10,000 in travelers checks into the United States, one federal investigator noted.

In Tokyo District Court, where he is on trial in connection with the golf membership sales scheme, Mizuno has pleaded not guilty to tax evasion charges. He argued that the income in question came to him in the form of a long-term, interest-free loan from Sanki, the company that allegedly oversold the memberships and to which he transferred ownership of the Ibaraki Country Club.

He also reasoned that although so many memberships were sold it would have been physically impossible for every member to play golf, most investors bought them as speculative financial instruments, never intending to tee off.

About the time Mizuno was arrested, the memberships were trading for about 20 times their face value, according to the Nikkei financial database. Now, like many junk bonds, they have little or no value--until Mizuno’s assets can be distributed by the courts.

In criminal court, Mizuno was vague in responding to fraud charges. In a hearing in October, he acknowledged attending a sales meeting in which the membership sales scheme was discussed. But he reportedly said: “I will leave it up to the court to make a judgment on fraud, the use of the golf course, and the speculative value of the memberships.”

Meanwhile, Kengo Ohashi--a lawyer appointed by the Tokyo bankruptcy court to represent Mizuno and his creditors--appeared in federal court in San Bernardino last August to place Mizuno into involuntary bankruptcy in this country. Ohashi is also claiming Mizuno’s U.S. assets.

It appears that Mizuno has no personal advocate in the United States, either in the criminal or civil case.

“I honestly don’t know who is representing him now,” said Gregg Nasky, Mizuno’s former lawyer in Las Vegas.

In Japan, the legal question seems to center on whether Mizuno will serve time in prison, or receive a suspended sentence with restitution to his alleged victims. Legal experts note that more than 99% of all criminal indictments in Japan result in convictions.

“I doubt he has a chance for probation,” said Mizuno’s trusted business associate. “I think they’re going to make a scapegoat out of him in the aftermath of the economic bubble.”

But at the Mirage, Wynn is anticipating Mizuno’s return as a free man--a gambling man.

“We’re waiting for him,” Wynn said. “He’s always welcome here.”

Mizuno’s Orient

Contradictory versions of the past confuse the portrait of Ken Mizuno, a legendary high roller in Las Vegas casinos and a real estate developer who is jailed in Japan, accused of operating a $1-billion pyramid scheme by overselling golf memberships in the Ibaraki Country Club. The tales of Mizuno’s origins stretch from Manchuria to Korea to Japan.


Baccarat has origins in medieval Italy and became popular in European casinos in the mid-19th Century. The card game vaguely resembles blackjack, but the aim is for cards that add up to nine, not 21. Face cards and 10s count as zero; when point totals go beyond nine, only the second digit counts. A variation of the game, baccarat-chemin de fer, was introduced to Las Vegas in the 1950s. This is the version favored by Asian and Latin American players today. Only one non-bank hand is dealt, but bets can be placed either for or against the bank. At Las Vegas casinos featuring high-stakes baccarat, minimum bets are usually $1,000 a hand, and wagers of up to $40,000 are not unusual. For players of more modest means, many casinos offer “mini-baccarat,” with a minimum bet of $25.