Executive Gets 5 Years in Embezzlement Case
A top executive of a Santa Fe Springs meat-processing firm who managed to pull off what may be the largest embezzlement in U.S. history was sentenced Monday to only slightly more than five years in federal prison by a judge who said the term should be longer.
“It seems remarkable that the sentencing guidelines, as stringent as they are in other areas, only permit a sentence of this amount for something as extraordinary as this case,” U.S. District Judge Stephen V. Wilson said as he imposed a sentence of 63 months on Yasuyoshi Kato, former chief financial officer of Day-Lee Foods Inc.
Kato could have faced 76 years in prison and up to $3 million in fines in the embezzlement of more than $60 million from Day-Lee, most of which allegedly went to Kato’s estranged wife, who has not been charged. Kato pleaded guilty in July to two counts each of wire, bank and tax fraud.
Kato, 40, confessed to stealing perhaps as much as $100 million by simply writing checks to himself from Day-Lee’s accounts. Kato covered up the thefts by arranging lines of credit for the company with U.S. subsidiaries of Japanese banks.
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Kato, in court documents, said about 70% of the stolen money went to his wife, Doris Beiler-Hozumi, to support her, their two young daughters and her money-losing luxury car dealership. Kato and Beiler-Hozumi spent the money on stocks, luxurious homes, fancy cars, a citrus ranch, jewelry from Beverly Hills shops, interest in a Torrance bar called Club Cha Cha and a bizarre menagerie featuring two $10,000 macaws and a pair of pot-bellied pigs.
Kato, dressed in a gray suit and listening to court proceedings through a Japanese interpreter, did not address the court because he “emotionally would prefer not to say anything,” said his lawyer, John Yzurdiaga.
Yzurdiaga tried to explain Kato’s theft by saying: “He married a very unusual human being whose excesses could not be satisfied by anything.”
Wilson said he found that argument weak.
“I haven’t been married,” Wilson said. “But I can’t understand how a man can be stimulated to embezzle $100 million or not because his wife was a profligate.”
Yzurdiaga argued for leniency for Kato because his “level of cooperation” with the federal receiver searching for assets to liquidate “has been extraordinary.”
“As was his theft,” Wilson retorted.
Kato’s sentences Monday on all of the fraud counts added up to more than 26 years. But federal sentencing guidelines require grouping the sentences for similar crimes so that they run concurrently.
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As a result, Kato’s sentence totaled 63 months in federal prison, the length of the longest sentence he received on Monday. Kato must serve at least 85% of that sentence.
He also pleaded guilty to one count of criminal forfeiture, which means he will repay what was stolen. His assets have been seized and will be sold to pay creditors.
Documents filed as part of the plea agreement peg the embezzled amount at $60 million, which is the total of embezzled funds that auditors could trace. Kato, in a statement filed in a $95-million civil lawsuit by Day-Lee Foods, said he remembered embezzling between $85 million and $95 million between 1990 and 1997. Day-Lee, a subsidiary of Nippon Meat Packers of Osaka, one of Japan’s largest meat processors, is in the process of repaying $100 million in loans and accrued interest that Kato arranged in Day-Lee’s name.
Assistant U.S. Atty. Michael Zweiback declined to say if Beiler-Hozumi is being investigated or if there are any plans to charge her in connection with the Day-Lee embezzlement.
Wilson allowed Kato to remain free until Nov. 3, when he must surrender to an institution designated by the U.S. Bureau of Prisons.
