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U.S. Securities and Exchange Commission

United States of America
before the
Securities and Exchange Commission

Securities Exchange Act of 1934
Release No. 48415 / August 27, 2003

Administrative Proceeding
File No. 3-11236


In the Matter of

Larry T. Osaki and
Van Y. Ichinotsubo,

Respondents.


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ORDER INSTITUTING PUBLIC ADMINISTRATIVE PROCEEDINGS PURSUANT TO SECTION 15(b) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") against Larry T. Osaki ("Osaki") and Van Y. Ichinotsubo ("Ichinotsubo") (collectively, "Respondents").

II.

In anticipation of the institution of these proceedings, Respondents have submitted an Offer of Settlement (the "Offer"), which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over them and the subject matter of these proceedings, and the findings contained in Sections III. C., III. D. and III. E. below, which are admitted, Respondents consent to the entry of this Order Instituting Public Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions ("Order") , as set forth below.

III.

On the basis of this Order and Respondents' Offer, the Commission finds that:

A. Osaki, age 54, is a resident of Upland, California, and is the managing partner of J.T. Wallenbrock & Associates ("Wallenbrock"), a general partnership located in Pasadena, California, and the controlling shareholder of Citadel Capital Management Group, Inc. ("Citadel"), a Nevada corporation located in Pasadena, California.

B. Ichinotsubo, age 51, is a resident of Cerritos, California, and was an employee of Wallenbrock and Citadel.

C. On January 28, 2002, the Commission filed a Complaint in the United States District Court for the Central District of California against Osaki, Ichinotsubo and other parties captioned, SEC v. J.T. Wallenbrock & Associates, et al., Case No. 02-00808. The Commission's Complaint alleges that from at least 1999 to January 2002, Osaki, Ichinotsubo and others fraudulently offered and sold promissory notes issued by Wallenbrock, raising at least $230 million from over 6,000 investors in forty-eight states. The Complaint further alleges that Osaki, Ichinotsubo and others fraudulently misrepresented to investors in connection with the sale of Wallenbrock securities that their money would be used to generate profits in Wallenbrock's receivables "factoring" business in which Wallenbrock supposedly purchased discounted receivables of Malaysian latex glove manufacturers. Commission filings allege that, in reality, Osaki, Ichinotsubo and others engaged in a Ponzi and misappropriation scheme in which investors' funds were actually used to repay other investors and to provide funding for risky, start-up businesses.

D. The Complaint also alleges that from at least 1999 to January 2002, Osaki and Ichinotsubo acted as unregistered broker-dealers in connection with the offering of Wallenbrock securities as part of a fraudulent scheme.

E. On February 28, 2003, in SEC v. J.T. Wallenbrock & Associates, et al., a final judgment was entered by consent against Osaki and Ichinotsubo permanently enjoining them from violating Sections 5(a), 5(c), 17(a)(1), 17(a)(2), and 17(a)(3) of the Securities Act of 1933, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The final judgment also permanently enjoins Osaki and Ichinotsubo from violating Sections 15(a) and 15(c) of the Exchange Act and Rule 15c1-2 thereunder. Osaki and Ichinotsubo, without admitting or denying the allegations made in the Commission's Complaint, consented to the entry of the order of permanent injunction.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to accept Respondents' Offer.

ACCORDINGLY, IT IS HEREBY ORDERED, pursuant to Section 15(b) of the Exchange Act that Respondents Osaki and Ichinotsubo be, and hereby are, barred from association with any broker or dealer.

Any reapplication for association by the Respondents will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including, but not limited to, the satisfaction of any or all of the following: (a) any disgorgement ordered against the Respondents, whether or not the Commission has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the conduct that served as the basis for the Commission order; (c) any self-regulatory organization arbitration award to a customer, whether or not related to the conduct that served as the basis for the Commission order; and (d) any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the Commission order.

By the Commission.

Jonathan G. Katz
Secretary

 

http://www.sec.gov/litigation/admin/34-48415.htm


Modified: 08/27/2003