Osaki

I. Factual and Procedural Background3

From at least 1997 to October 2003, the defendants raised nearly $253.2 million from thousands of investors through the fraudulent sale of unregistered promissory notes.4 The defen- dants misrepresented to investors that they were using the proceeds of the notes, matched by Wallenbrock, to purchase accounts receivable of Malaysian latex glove manufacturing companies and that the investments would yield returns of 15- 20 percent every 90 days. The defendants told investors that there was little or no risk in the Wallenbrock investments and emphasized the safety of profits. In fact, the defendants did not purchase such receivables but instead used the investors’ funds to engage in a high-stakes Ponzi scheme and invest in speculative business ventures.5 2 We also include Ichinotsubo in our reference to “the defendants.” 3 The undisputed facts are based on the allegations in the SEC’s com- plaint and the district court’s disgorgement order. In accordance with a February 28, 2003 order of permanent injunction, the defendants are pre- cluded from denying or arguing that they did not violate federal securities law in the manner set out in the…