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Yamaguchi, an old friend of Togusa's and a police detective working in the the Laughing Man task force, is murdered after he calls Togusa, requesting to see him concerning what Yamaguchi terms "suspicious internal activity" by higher ups in the police department. At Yamaguchi's wake, Togusa is approached by Yamaguchi's wife, who delivers an envelope from him to Togusa that contain a series of strange photographs. Upon scrutinizing the photographs, Togusa realizes that none of them are taken using a camera. Continuing his investigation, Togusa interviews another detective in the Laughing Man task force, who coincidentally mentions that the task force is waiting to bug a primary suspect in the case with cybernetic surveillance devices called "interceptors". The interceptors allow constant audio and visual monitoring of the subject via their own senses. Togusa puts two and two together, concluding that the Laughing Man task force members were bugged with these devices illegally for monitoring, although the purpose of such illegal surveillance remains unknown. Shortly thereafter, the information about the illegal use of the interceptors is leaked by Section 9, prompting the police Commissioner to call a press conference regarding the growing scandal. The Commissioner publicly denies any responsibility, instead blaming the head of the "Laughing Man" task force, Nibu Kunihiko, and announcing Nibu's immediate resignation. News reporters press the Commissioner about the possible involvement of higher officials, as well as the Commissioner's own ties to nanomachine maker Serano-Genomix, who manufactured the interceptors, but the Commissioner continues in his denials. At that point, the mysterious hacker known as The Laughing Man returns. Hijacking a police official's cyberbrain, the Laughing Man denounces what he refers to as the "previous farce", and announces that due to the police's efforts to cover up the truth, he will reluctantly challenge them again. Finally, he delivers a death threat to the commissioner, stating that he will remove him (mimicking a gun with the hijacked police official's hand) if the truth is not revealed in full.
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