In 1997, the Government devised an undercover scenario in which an Undercover Agent would pose as a distributor of American memorabilia in Asia. This scenario enabled the FBI to purchase evidence without being forced to sell forged items to the public. It also made the criminals more likely to openly discuss the counterfeit nature of the memorabilia because it was "going overseas" beyond the reach of U. S. law enforcement agencies. To support this "cover story," the FBI established the Nihon Trading Company in Oceanside, California. The goal of the Undercover Operation was to infiltrate the forged memorabilia market and obtain recorded statements from those individuals who were identified as forgers, authenticators, and distributors of fraudulent memorabilia.

The key evidence in this investigation was recorded statements which provided evidence of the individuals knowing involvement in forging, fraudulently authenticating, and/or distributing forged memorabilia. In total, the San Diego Division of the FBI conducted well over 1,000 consensually recorded audio and video tapes. During the consensually recorded conversations, numerous co-conspirators made incriminating statements which illuminate the nature and common practices involved with sports memorabilia fraud. For example, one of the conspirators joked to the Undercover Agent about how Mickey Mantle still has one arm out of the grave doing autographs. Other conspirators noted that Wilt Chamberlin was still available for signing weeks after his death.

During the investigation, various conspirators became suspicious a law enforcement investigation and scheduled a breakfast meeting at a restaurant in Carlsbad, California. The conspirators discussed how to avoid law enforcement detection, attempted to identify individuals who might cooperate with law enforcement, and developed a strategy if confronted by law enforcement, in which they would tell them to not say one word. All of these statements were overheard by several Agents having breakfast at adjacent tables.

The investigation also revealed that the conspirators attempted to avoid detection by conducting transactions in cash and by using nominee names on bank accounts and other assets. Many maintained substantial amounts of currency which they used to pay bills, and to purchase vehicles, real estate, and additional memorabilia.

The San Diego Office of the FBI also sought and received the assistance of professional baseball players Tony Gwynn of the San Diego Padres and Mark McGwire of the St. Louis Cardinals. Both athletes assisted the FBI by identifying forgeries of their autographs and thus provided investigators significant leads regarding the identities of individuals involved in this illegal activity.