Third-Party in Interest Tiffany Jennifer Lam's OBJECTION to the 132 United States' MOTION for Order… (Dkt. 149)

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Third-Party in Interest Tiffany Jennifer Lam's Objection to the United States' Motion for Order Authorizing Application of Defendant's Bond Deposit to Payment of Special Assessment and Restitution [Dkt 132], with her declaration, Document 149, filed 02/13/25 in United States v. Martin Kao, Case No: 1:21-cr-00061-LEK (D. Haw.). Lam states that she is married to Kao and has an ownership interest in the $2,000,000.00 cash bail posted for him, so 28 U.S.C. § 2044 does not apply to that interest. She says the bail came from a joint marital account and that, under Hawaii's partnership model for marital property, her interest was at least $1,500,000.00. She asks the Court to deny the motion as to her interest and to return it to her because the conditions of the bond have been satisfied. Philip W. Miyoshi signs with /s/.

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Case 1:21-cr-00061-LEK Document 149

MIYOSHI & HIRONAKA LLLC

PHILIP W. MIYOSHI #7459

201 Merchant Street, Suite 2240

Honolulu, Hawaii 96813

Telephone: (808) 888-5042
philip@808-law.com

Attorneys for Thid-Party In Interest
TIFFANY JENNIFER LAM

Filed 02/13/25 Page. of Baeagelb.1274

UNITED STATES DISTRICT COURT
DISTRICT OF HAWAII

FEB 13 2025 apd

at 4 o'clock and VO min. PM
Lucy H. Carrillo, Clerk

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

UNITED STATES OF AMERICA,
Plaintiff,
vs.
MARTIN KAO,

Defendant.

Case No: 1:21-cr-00061-LEK

THIRD-PARTY IN INTEREST
TIFFANY JENNIFER LAM’S
OBJECTION TO THE UNITED
STATES’ MOTION FOR ORDER
AUTHORIZING APPLICATION
OF DEFENDANT’S BOND
DEPOSIT TO PAYMENT OF
SPECIAL ASSESSMENT AND
RESTITUTION [DKT 132];
DECLARATION OF TIFFANY
JENNIFER LAM; CERTIFICATE
OF SERVICE

HEARING:

Date: February 13, 2025

Time: 3:30 PM

Judge: Hon. Kenneth J. Mansfield
Case 1:21-cr-00061-LEK Document149_ Filed 02/13/25 Page 2of8 PagelD.1275

THIRD-PARTY IN INTEREST TIFFANY JENNIFER LAM’S OBJECTION TO
THE UNITED STATES’ MOTION FOR ORDER AUTHORIZING
APPLICATION OF DEFENDANT’S BOND DEPOSIT TO
PAYMENT OF SPECIAL ASSESSMENT AND RESTITUTION
Third-Party In Interest TIFFANY JENNIFER LAM (“Tiffany”), by and
through her counsel Miyoshi & Hironaka LLLC, hereby submits her Objection to
the United States’ Motion for Order Authorizing Application of Defendant’s Bond
Deposit to Payment of Special Assessment and Restitution [Dkt. 132] (“Motion”).
Tiffany has an ownership interest in the cash bail posted on behalf of Defendant
Martin Kao (“Martin’s Bail”) and therefore 28 U.S.C. § 2044 does not apply to
such interest. Accordingly, the Motion should be denied with respect to Tiffany’s

ownership interest in Martin’s Bail.

I. FACTUAL SUMMARY

A. Marriage Partnership

Tiffany is married to Martin Kao (“Martin”). Tiffany and Martin have been
married since February 7, 2007. Tiffany was 31 years of age and Martin was 34
years of age at the time. Tiffany and Martin have two children aged 10 and 12.

Tiffany and Martin did not have any substantial liquid assets at the time they
were married in 2007. Their primary asset was real property located in Manoa
(“Manoa Property”) that Tiffany owned prior to marriage and which she inherited

from her grandfather. Tiffany owned the Manoa Property free of any mortgage or
Case 1:21-cr-00061-LEK Document149 _ Filed 02/13/25 Page3of8 PagelD.1276

other encumbrance. The Manoa Property is a marital asset which Tiffany and
Martin currently own jointly.

After Tiffany and Martin married, Tiffany relinquished her career as a
certified public accountant and did not work. Tiffany’s role in the marriage was to
be the primary homemaker, wife, and mother.

At the time Tiffany and Martin married, they agreed that all their financial
assets, including the Manoa Property and all their joint and individual bank and
financial accounts (collectively ““Accounts”), were joint marital assets to be
considered part of their marital estate (“Marital Agreement”). Tiffany relied on
the Marital Agreement in making decisions regarding her personal life, career,
finances and other marital matters. All the funds in their Accounts that were
accumulated during their marriage were considered to be marital property.

Over the course of their marriage, Tiffany and Martin deposited income and
other monies into their Accounts which were used to pay family living expenses
and accumulate marital savings. Tiffany made direct and indirect contributions to
those Accounts including the management of income and expenses, investment
decisions, and college savings for the children. Since being married, Tiffany and

Martin have always filed joint Federal and State tax returns.
Case 1:21-cr-00061-LEK Document149_ Filed 02/13/25 Page4of8 PagelD.1277

B. Posting Of Martin’s Bail

Martin was arrested on September 30, 2020. At the time of Martin’s arrest,
one of the Accounts was with Merrill Lynch, Account No. **-*2641 (“Merrill
Lynch Account”), which had a balance of approximately $5,000,000.00. On or
about October 1, 2020, the United States seized $2,000,000.00 (“Seized Funds”)
from the Merrill Lynch Account in connection with this case.

After Martin’s arrest, Tiffany was informed that Martin’s Bail was set in the ~
amount of $2,000,000.00. Tiffany immediately contacted Merrill Lynch to
withdraw funds totaling $2,000,000.00 from the Merrill Lynch Account to pay for
Martin’s Bail. On October 6, 2020, Tiffany requested that Merrill Lynch issue a
$2,000,000.00 cashier’s check from the Merrill Lynch Account to be made payable
to the United District Court of Hawaii for Martin’s Bail. As of the date that Tiffany
requested Merrill Lynch to issue the cashier’s check, and after removal of the
Seized Funds, the Merrill Lynch Account had an approximate balance of
$3,000,000.00.

On the morning of October 7, 2020, Tiffany went to the offices of Merrill
Lynch and picked up the $2,000,000.00 cashier’s check for Martin’s Bail. Later
that morning, Tiffany met Ms. Erin Patrick from United States Pretrial Services
Offices in front of the Federal Courthouse to hand over the $2,000,000.00 cashier’s

check and personally post Martin’s Bail. Tiffany was accompanied by her brother,
Case 1:21-cr-00061-LEK Document149_ Filed 02/13/25 Page5of8 PagelD.1278

Todd. Upon delivery of the $2,000,000.00 cashier’s check to Ms. Patrick, Tiffany
was not provided with a receipt for posting Martin’s Bail.

After issuance of the cashier’s check, the approximate balance in the Merrill
Lynch Account was $1,000,000.00. The Merrill Lynch Account was closed, and
the remaining funds were transferred to another Account and were subsequently
used to pay for Martin’s various legal expenses and costs (“Martin’s Legal Fees”)
expended in this and other criminal and civil matters. Pursuant to the Marital
Agreement, Tiffany had a joint marital interest in the Merrill Lynch Account,
which included the $2,000,000.00 used for Martin’s Bail and the $1,000,000.00
expended on Martin’s Legal Fees.

Il. DISCUSSION

The United States seeks to apply Martin’s Bail to the restitution/fines
ordered in connection with Martin’s sentence in this case. The United States
invokes 28 U.S.C. § 2044 as a basis for its request:

On motion of the United States attorney, the court shall order any
money belonging to and deposited by or on behalf of the defendant
with the court for the purposes of a criminal appearance bail bond
(trial or appeal) to be held and paid over to the United States attorney
to be applied to the payment of any assessment, fine, restitution, or
penalty imposed upon the defendant. The court shall not release any
money deposited for bond purposes after a plea or a verdict of the
defendant's guilt has been entered and before sentencing except upon
a showing that an assessment, fine, restitution or penalty cannot be
imposed for the offense the defendant committed or that the defendant
would suffer an undue hardship. This section shall not apply to any
third party surety.
Case 1:21-cr-00061-LEK Document149_ Filed 02/13/25 Page6of8 PagelD.1279

28 USCA § 2044 (emphasis supplied).' The United States “bears the burden of
showing, by a preponderance of the evidence, that” Martin’s Bail belongs to
Martin and that they are not owned by a third party. United States v. Gonzalez, No.
11-CR-80211, 2013 WL 654918, at *4 (S.D. Fla. Feb. 21, 2013) (28 U.S.C. § 2044
not applicable to bond paid by defendant’s sister). In other words, the United
States must show “(1) that the money was deposited by the defendant or on the
defendant's behalf; and (2) that the money belongs to the defendant.” United
States v. Arnold, No. 1:18-CR-30-1, 2020 WL 957415, at *3 (N.D. Miss. Feb. 27,
2020) (internal quotations and citations omitted) (28 U.S.C. § 2044 not applicable
to bond paid by defendant’s wife).

The United States cannot make such showing as the funds used to pay for
Martin’s Bail are owned by Tiffany. The cashier’s check in the amount of
$2,000,000.00 delivered by Tiffany to Ms. Patrick on October 6 was withdrawn
from the Merrill Lynch Account, a financial account owned by Martin and Tiffany
pursuant to their Marital Agreement. In instances, where as here, there is an effort

to divide a marital asset as between spouses, the Hawaii courts apply the

' See United States v. Equere, 916 F.Supp. 450, 453 n.4 (E.D. Pa. 1996) (stating
that “the [third party surety] disclaimer applies to” third party individuals).
Case 1:21-cr-00061-LEK Document149 _ Filed 02/13/25 Page7 of 8 PagelD.1280

partnership model. See e.g., Collins v. Wassell, 133 Hawai'i 34, 42, 323 P.3d 1216,
1224 (2014) (stating that “[c]ases in this jurisdiction have ‘created a framework
based on partnership principles that provides further guidance for family courts to
use in dividing property upon divorce.’”). “Under general partnership law, ‘each
partner is entitled to be repaid his contributions to the partnership property,
whether made by way of capital or advances.’” Gussin v. Gussin, 73 Haw. 470,
483, 836 P.2d 484, 491 (1992) (citation omitted). “In the absence of any
agreement between husband and wife . . . partnership principles of law require an
equal division of the marital property” where the facts show a marriage and the
existence of jointly owned property. Jd. at 484, 836 P.2d at 491.

Here, Tiffany had a marital ownership interest in the Merrill Lynch Account,
which maintained a balance of approximately $3,000,000 at the time Tiffany
withdrew $2,000,000 from the account to pay for Martin’s Bail. Under Gussin,
Tiffany owned fifty percent (50%) of the funds in the Merrill Lynch Account. As
set forth above, and pursuant to the partnership model for marital property under
Hawaii law, Tiffany’s ownership interest in the Merrill Lynch Account was at least
$1,500,000.00 ($3,000,000.00/2) at the time she requested that Merrill Lynch issue
a $2,000,000.00 cashier’s check for Martin’s Bail. Therefore, Tiffany’s ownership
interest in Martin’s Bail is approximately $1,500,000 and Section 2044 does not

apply towards such an amount regarding any restitution/fine imposed on Martin in
Case 1:21-cr-00061-LEK Document149 _ Filed 02/13/25 Page 8of8 PagelD.1281

this case. See e.g., Equere, 916 F. Supp. at 454 (28 U.S.C. § 2044 not applicable to
bond paid by defendant’s brother); United States v. Sparger, 79 F.Supp.2d 714, 719
(W.D. Tex. 1999) ; (28 U.S.C. § 2044 not applicable to bond paid by defendant’s
attorney); United States v. Salyer, No. 2:10-CR-0061 LKK, 2014 WL 412088, at
*5 (E.D. Cal. Feb. 3, 2014), report and recommendation adopted, No. 2:10-CR-
0061 LKK, 2014 WL 1270583 (E.D. Cal. Mar. 26, 2014) (28 U.S.C. § 2044 not
applicable to bond paid by defendant’s sister).

Ill. CONCLUSION

For the foregoing reasons, Tiffany respectfully requests that the Court deny
the United States’ Motion with respect to her marital interest in the monies she
withdrew from the Merrill Lynch Account to fund Martin’s Bail. Tiffany further
requests that her ownership interest in Martin’s Bail be returned to her as the
conditions of Martin’s bond have now been satisfied. See Fed. R. Crim. P. 46
(“The court must exonerate the surety and release any bail when a bond condition
has been satisfied or when the court has set aside or remitted the forfeiture.”)

DATED: Honolulu, Hawaii, February 13, 2025.

/s/Philip W. Miyoshi
PHILIP W. MIYOSHI

Attorney for Third-Party In Interest
TIFFANY JENNIFER LAM

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