Yamaguchi, a friend of Togusa's, is working on the Laughing Man case for the Tokyo police. He is murdered in order to silence him and his wife approaches Togusa for justice. Investigating what his friend was working on, Togusa can only find a large number of seemingly innocuous photos. Only later does he figure out that there was no camera in any of the photos, revealing they were taken with the subject's own eyes.
This convinces Togusa that the Laughing Man task force was under illegal surveillance using "interceptors" or eye cameras. However, their investigation is immediately shut down by the head of the task force willingly taking the fall. The incident clues Section 9 into the manufacturer of nanomachines, Serano Genomics, into someone involved in the case.
Matters come completely to a head, though, when the Laughing Man seemingly hijacks the brain of a police official during the press conference and issues a death threat to the police commissioner.
Tropes in this episode include:
- Back in the Saddle: The Laughing Man has been inactive for six years, for unknown reasons. The Police department, with their attempt to sweep the interceptor incident under the rug, piss him off enough to stage a dramatic return in the middle of their press conference.
- "Eureka!" Moment: Togusa has two of them. The first is when, while washing his hands in the bathroom, he catches his reflection in the mirror, which leads him to check reflections in each of the photos and realize there's no cameras in any of them. The second is when he has dinner with another detective, who mentions Interceptors, causing him to realize that's how the photos were taken.
- Every Car Is a Pinto: Yamaguchi's car flies off a highway overpass and lands upside down—then explodes in a huge fireball, to make it clear to the audience that the poor guy is dead.
- Law of Disproportionate Response: The Major visits a bartender to get him to leak certain information to the press. When she threatens to report him for associating with known cyberterrorists if he doesn't cooperate, he complies but otherwise seems unperturbed. Then the Major declines his offer to stay for a drink, accusing him of watering down his alcohol, and that gets more of a reaction from the bartender: "Now that was uncalled for."
- Make It Look Like an Accident: Yamaguchi's superiors kill him by using his interceptors to obstruct his vision, as he's driving in the middle of a rainstorm, resulting in a fatal car crash. Togusa, who talked with Yamaguchi mere minutes before his death, is the only one who suspects it wasn't a normal accident.
- Oh, Crap!: The Chief has this reaction when the Laughing Man hacks one of the guests behind him to deliver his threat.
- Revealing Cover-Up: Togusa would have probably considered the Interceptors a minor matter if not for the cop murdered. Subverted in Section 9 never proves Yamaguchi was murdered.
- Spotting the Thread: Togusa realizes there's no cameras in the pictures he's been given.
- Taking the Heat: The decision to illegally use interceptors went pretty high up the police chain of command, but the head of the Laughing Man task force protects his superiors by claiming sole responsibility, shutting down the investigation.
- Wham Episode: This is when the Laughing Man storyline officially begins.
