ORDER GRANTING THE UNITED STATES' MOTION FOR ORDER AUTHORIZING APPLICATION OF DEFENDANT'S BOND… — USA v. Kao (Dkt. 156)

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An order granting the United States' motion for an order authorizing application of the defendant's bond deposit to payment of special assessment and restitution, filed March 4, 2025 as Document 156 in United States v. Martin Kao, CR NO. 21-00061 LEK-KJM, in the U.S. District Court for the District of Hawaii. It recites that the Court permitted Third-Party in Interest Tiffany Jennifer Lam to intervene for the limited purposes of the Motion. The Court finds by a preponderance of the evidence that the $2 million cash bond was deposited on the defendant's behalf with money belonging to Defendant, citing the bail affidavit and account documents naming Defendant as sole owner. It orders the $2 million applied to the defendant's criminal penalties, including the special assessment and/or order of restitution.

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IN THE UNITED STATES DISTRICT COURT 
 
FOR THE DISTRICT OF HAWAII 
 
UNITED STATES OF AMERICA,  
 
                               Plaintiff,  
 
          vs.  
 
MARTIN KAO, 
 
                               Defendant. 
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CR NO. 21-00061 LEK-KJM 
 
ORDER GRANTING THE UNITED 
STATES’ MOTION FOR ORDER 
AUTHORIZING APPLICATION OF 
DEFENDANT’S BOND DEPOSIT 
TO PAYMENT OF SPECIAL 
ASSESSMENT AND 
RESTITUTION 
 
ORDER GRANTING THE UNITED STATES’ MOTION FOR ORDER  
AUTHORIZING APPLICATION OF DEFENDANT’S BOND DEPOSIT  
TO PAYMENT OF SPECIAL ASSESSMENT AND RESTITUTION   
 
 
On August 5, 2024, the United States filed a Motion for Order Authorizing 
Application of Defendant’s Bond Deposit to Payment of Special Assessment and 
Restitution (“Motion”).  ECF No. 132.  Defendant Martin Kao (“Defendant”) filed 
a Memorandum in Opposition on August 15, 2024 (“Opposition”).  ECF No. 136.  
The Court held a hearing on the Motion on August 19, 2024, at which time the 
Court continued the hearing until after Defendant’s sentencing.  ECF No. 137. 
 
The Court held a further hearing on February 13, 2025.  ECF No. 147.  At 
the hearing, the Court permitted Defendant’s spouse, Third-Party in Interest 
Tiffany Jennifer Lam (“Lam”), to intervene for the limited purposes of the Motion.  
Id.  Lam filed her objection to the Motion during the hearing (“Lam Objection”).  
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ECF No. 149.  On February 27, 2025, the Government filed a response to Lam’s 
Objection.  ECF No. 154.  That same day, Defendant filed a declaration.  ECF No. 
155. 
After carefully considering the memoranda, applicable law, record in this 
case, and arguments of counsel, the Court GRANTS the Motion for the reasons set 
forth below. 
DISCUSSION 
I. 
28 U.S.C. § 2044 
In the Motion, the Government seeks an order authorizing application of 
Defendant’s $2 million bond deposit for payment of his special assessment and 
restitution, pursuant to 28 U.S.C. § 2044.  Section 2044 requires the Court to order 
a defendant’s bail bond to be held over and paid to the United States attorney to be 
applied towards payment of any assessment, fine, restitution, or penalty, so long as 
the posted bail money belongs to and was deposited by or on behalf of the 
defendant: 
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 
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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. 
 
28 U.S.C. § 2044.    
“Section 2044 codifies the discretion courts have long exercised, to pay, on a 
proper motion, bond or bail money to the parties with a legally established superior 
claim to it.”  United States v. Higgins, 987 F.2d 543, 546 (8th Cir. 1993) (other 
citation omitted) (citing United States v. Rubenstein, 971 F.2d 288, 294 (9th Cir. 
1992)).  “[T]he applicability of Section 2044 requires two showings:  (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. Hughes, No. 3:15-CR-11, 
2017 WL 2462725, at *1 (S.D. Tex. June 6, 2017).  As to the second prong, the 
burden rests with the government to establish by a preponderance of the evidence 
that the funds in question belonged to the defendant and were not deposited by a 
third-party surety.  See, e.g., United States v. Hills, No. 1:16-CR-329, 2022 WL 
1127888 at *3 (N.D. Ohio April 15, 2022) (collecting cases).   
II. 
Affidavit of Cash Bail 
 
Defendant was arrested on September 30, 2020.  ECF Nos. 1, 9.  On or 
about October 8, 2020, Defendant posted a $2 million secured bond, all by way of 
a cash deposit, which is presently held by the Clerk of the Court. ECF Nos. 14, 
150.  Defendant also signed a notarized Affidavit by Owner of Cash Bail (“Bail 
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Affidavit), in which he represented to the Court that he owned the $2 million 
deposited as bail, and that the $2 million was to be returned to him upon any bond 
exoneration:  
 
ECF No. 150.   
Defendant pled guilty on September 7, 2022, ECF Nos. 76, 77, and was 
subsequently sentenced on February 13, 2025.  ECF No. 146.  The district court 
AFFlDA VIT BY OWNER OF CASH BAIL 
1, Martin Kao on oath say that l reside at 
---------
and that the $2,000.000.00 cash deposited as bail on the foregoing bond is owned by me and is to be 
returned to me at the above address upon exoneration of this bond. 
1n compliance with the regulations issued by the Internal Revenue Service of the Department of 
the Treasury for the Internal Revenue Cod(} Section 6050l(g), l hereby submit the following: 
Social Security Number 
Date of Birth -
19 7 :1 
Method of ID: µ / ,[),-; v<v-_1 { ,',a..A~ 
ID Number 
Signature of owner of cash security 
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entered an Amended Judgment on February 24, 2025, which imposed restitution of 
$12,841,490 and an $800 special assessment.  ECF No. 151.   
 
Notwithstanding Defendant’s Bond Affidavit, Defendant argues that (i) the 
Government failed to identify the source of the posted money or confirm the 
absence of third-party claims to the money, and/or (ii) the posted funds are joint 
marital assets not subject to § 2044.  ECF No. 136 at 3; ECF No. 155.   
III. 
A Preponderance of the Evidence Shows that the Bail Funds 
Belong to Defendant 
Defendant and Lam claim that the $2 million used to pay for Defendant’s 
secured bond constitutes joint marital assets that are not subject to turnover to the 
United States Attorney.  Lam states under oath that she withdrew the $2 million 
from a Merrill Lynch account, which she and Defendant considered to be a joint 
marital asset.  ECF No. 149-1 (“Martin and I agreed that all our financial assets, 
including . . . all our joint and individual bank and financial accounts . . . were joint 
marital assets[.]”).  Defendant subsequently filed a substantially similar declaration 
containing the same statement.  ECF No. 155 (“Tiffany and I agreed that all our 
financial assets, including . . . all our joint and individual bank and financial 
accounts . . . were joint marital assets[.]”). 
 
As a starting point, many courts have found that a defendant’s signing of an 
appearance bond representing his ownership of the posted bond property as 
sufficient evidence of such ownership.  See Hills, 2022 WL 1127888 at *4 (finding 
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each defendant’s sworn representations that they were the sole owners of the 
property securing the bonds as strong evidence of each defendant’s ownership in 
the absence of any contrary claim); United States v. Srithongrun, No. 4:19-CR-
00752-7, 2023 WL 2232023, at *1 (S. D. Tex. Feb. 22, 2023) (finding a cashier’s 
check and bond affidavit compelling evidence that deposit belonged to defendant 
absent any evidence of third party ownership); United States v. Bell, No. 
20CR2887-WQH, 2025 WL 319241, at *5 (S.D. Cal. Jan. 21, 2025) (ordering 
turnover pursuant to § 2044 notwithstanding spouse’s community property claim).  
Here, the Court looks beyond solely the Bond Affidavit to resolve Defendant and 
Lam’s arguments that the funds are joint marital assets. 
In addition to the Bond Affidavit, the Government submits the opening and 
other documents for the Merrill Lynch account, which identify Defendant, and 
only Defendant, as the account owner.  ECF No. 154-1.   Defendant’s and Lam’s 
declarations do not dispute that the account was held solely by Defendant.  Instead, 
they assert that, as part of their marital agreement, they considered this account to 
be joint marital property.  Nevertheless, even if the Court were to consider the 
account a joint account in spite of the Bond Affidavit and account documents 
showing otherwise, Defendant would be entitled under Hawaii law to all deposits 
in the account.  Haw. Rev. Stat. § 412:4-105 (“Any deposit account held in the 
names of two or more persons may be paid, on request and according to its terms, 
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to any one or more of the persons.”).  For this reason, each of the cases Lam relies 
upon is readily distinguishable.  See United States v. Gonzalez, No. 11-CR-80211, 
2013 WL 654918, *5 (S.D. Fla., Feb 21. 2023) (bond was co-signed by third 
parties, precluding a court finding that the funds belonged to the defendant); 
United States v. Arnold, Cr. No. 18-30, 2020 WL 957415, *2-3 (N.D. Miss. Feb. 
27, 2020) (deposit receipt identified wife as “Payer” and there was no evidence of 
defendant’s ownership); United States v. Equere, 916 F. Supp. 450, 453 (E.D. Pa. 
1996) (defendant’s brother, not the defendant, posted bail); United States v. 
Sparger, 79 F.Supp.2d 714, 719 (W.D. Tex. 1999) (bail money was posted by 
defense counsel and thus did not belong to defendant); United States v. Salyer, Cr. 
No. 10-61, 2014 WL 412088, *3, 5 (E.D. Cal. Feb. 3, 2014) (it was clear that the 
“cash posted” was “eventually provided” by defendant’s sister). 
Further, in response to Lam’s arguments that Hawaii law regarding division 
of marital assets in a divorce proceeding precludes a finding that Defendant owns 
the funds, the Government correctly points out that Hawaii divorce property 
distribution case law does not apply in here.  See, e.g., United States v. Real Prop. 
Located at 148 Maunalanikai Place in Honolulu, Haw., No. CIV. 07-00049 HG 
LEK, 2008 WL 3166799, at *8 (D. Haw. Aug. 6, 2008) (acknowledging that, 
under Hawaii divorce law, the “marital estate” can only be determined after an 
evidentiary trial).  Moreover, divorce law principles governing property 
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distribution “only apply to the parties to the divorce action.”  Id.  For that reason, 
Lam’s cited cases are inapposite.  See Collins v. Wassell, 133 Haw. 34, 42, 323 
P.3d 1216, 1224 (2014) (discussing the partnership principles that provide 
“guidance for family courts to use in dividing property upon divorce”); Gussin v. 
Gussin, 73 Haw. 470, 483, 836 P.2d 484, 486 (1992) (likewise acknowledging that 
“in divorce proceedings regarding division and distribution of the parties’ estate” 
the court is guided by partnership principles).  There being no divorce case 
pending or complete, Lam cannot rely on divorce law to make a claim to the 
Merrill Lynch account held solely in Defendant’s name. 
Taking into account all of the information the parties have submitted, and 
considering (i) Defendant’s Bail Affidavit attesting to ownership of the $2 million 
cash bail and asserting that it should be returned to him upon exoneration; (ii) the 
account documents identifying Defendant as the sole owner of the account from 
which the bond was paid; and (iii) the inapplicability of divorce law principles of 
marital assets to this criminal proceeding, the Court finds by a preponderance of 
the evidence that Defendant’s $2 million cash bond was deposited on the 
defendant’s behalf with money belonging to Defendant.  Accordingly, the Court 
GRANTS the Motion and ORDERS the $2 million be applied to the satisfaction of 
Defendant’s criminal penalties, including his special assessment and/or order of 
restitution. 
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IT IS SO ORDERED. 
DATED:  Honolulu, Hawaii, March 4, 2025. 
 
 
 
United States v. Kao, Crim. No. 21-00064 LEK-KJM; Order Granting the United States’ Motion 
for Order Authorizing Application of Defendant’s Bond Deposit to Payment of Special 
Assessment and Restitution 
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