Prepare the Panade: In a small bowl, mix breadcrumbs and milk. Let sit for 5 minutes until it forms a paste.
Combine Ingredients: In a large bowl, add the Wagyu beef, egg, Parmesan, shallot, garlic, parsley, salt, pepper, and the soaked breadcrumbs.
Mix Gently: Use your hands to combine the mixture. Mix only until just combined—do not overwork the meat or it will become tough.
Shape: Roll the mixture into 1.5-inch meatballs. If the meat sticks, lightly wet your hands with water.
Sear: Heat olive oil in a large skillet over medium heat. Brown the meatballs for 4-5 minutes, turning until a crust forms on all sides.
Simmer: Pour the marinara sauce into the skillet. Reduce heat to low, cover, and simmer for 10-15 minutes until the internal temperature reaches 160°F.
Serve: Serve warm over spaghetti, polenta, or in a toasted roll.