APPEAL OF MAGISTRATE JUDGE DECISION to District Court by Tiffany Jennifer Lam as to Martin Kao… — USA v. Kao (Dkt. 164)

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An objection by Third-Party in Interest Tiffany Jennifer Lam to the Order Granting the United States' Motion for Order Authorizing Application of Defendant's Bond Deposit to Payment of Special Assessment and Restitution (ECF No. 156), filed March 18, 2025 as Document 164 in United States v. Martin Kao, No. 1:21-cr-00061-LEK, in the U.S. District Court for the District of Hawaii. Lam states that Magistrate Judge Kenneth J. Mansfield erred in finding that Lam had no ownership interest in the cash bail posted on behalf of Kao under Section 2044. Lam argues that the bail affidavit and Kao's status as the individual account holder do not defeat the marital agreement, and that under the Hawaii partnership model $1,000,000 of the bail belongs to Lam. Lam asks that the order be reversed.

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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 Third-Party In Interest  
TIFFANY JENNIFER LAM 
 
IN THE UNITED STATES DISTRICT COURT  
FOR THE DISTRICT OF HAWAII 
 
UNITED STATES OF AMERICA,  
 
 
 
Plaintiff, 
vs. 
MARTIN KAO, 
 
 
 
 
Defendant. 
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Case No: 1:21-cr-00061-LEK 
 
 
THIRD-PARTY IN INTEREST 
TIFFANY JENNIFER LAM’S 
OBJECTION TO THE ORDER 
GRANTING THE UNITED 
STATES’ MOTION FOR ORDER 
AUTHORIZING APPLICATION 
OF DEFENDANT’S BOND 
DEPOSIT TO PAYMENT OF 
SPECIAL ASSESSMENT AND 
RESTITUTION [ECF No. 156]; 
CERTIFICATE OF SERVICE 
 
HEARING: 
Date:  February 13, 2025 
Time: 3:00 PM 
Judge: Hon. Kenneth J. Mansfield 
 
 
 
 
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THIRD-PARTY IN INTEREST TIFFANY JENNIFER LAM’S OBJECTION TO 
THE ORDER GRANTING 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 (“Lam”), by and through 
her counsel Miyoshi & Hironaka LLLC, and pursuant to Local Rule 74.1 of the 
United States District Court for the District of Hawai`i, hereby submits her Objection 
to the Order Granting the United States’ Motion for Order Authorizing Application 
of Defendant’s Bond Deposit to Payment of Special Assessment and Restitution 
(“Order”).  ECF No. 156.  Respectfully, the Honorable Magistrate Judge Kenneth J. 
Mansfield erred in finding that under 28 U.S.C. § 2044 Lam did not have any 
ownership interest in the cash bail posted on behalf of Defendant Martin Kao 
(“Bail”).  Accordingly, the Order should be reversed. 
I. 
FACTUAL SUMMARY1  
A. 
Marriage Partnership 
Lam is married to Martin Kao (“Kao”).  Lam and Kao have been married since 
February 7, 2007.  Lam was 31 years of age and Kao was 34 years of age at the time.  
Lam and Kao have two children aged 10 and 11.   
 
1 Lam hereby incorporates her Declaration attached to Lam’s Objection to the United 
States’ Motion for Order Authorizing Application of Defendant’s Bond Deposit to 
Payment of Special Assessment and Restitution and Kao’s Declaration previously 
submitted herein in this matter.  ECF Nos. 149, 155.   
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Lam and Kao did not have substantial liquid assets at the time they married in 
2007.  Their primary asset was real property located in Manoa (“Manoa Property”) 
that Lam owned prior to marriage which she inherited from her grandfather.  Lam 
owned the Manoa Property free of any mortgage or other encumbrance.  The Manoa 
Property is a marital asset which Lam and Kao currently own jointly. 
After Lam and Kao married, Lam relinquished her career as a certified public 
accountant and did not work.  Lam’s role in the marriage was to be the primary 
homemaker, wife, and mother.   
At the time Lam and Kao 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”).   Lam relied on the Marital Agreement 
in making decisions regarding her personal life, career, finances and other marital 
matters.  All funds in their Accounts accumulated during marriage were considered 
marital property.   
Over the course of their marriage, Lam and Kao deposited income and other 
monies into their Accounts which were used to pay family living expenses and 
accumulate marital savings.  Lam directly and indirectly contributed to those 
Accounts including the management of income and expenses, investment decisions, 
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and college savings for the children.  Since being married, Lam and Kao have always 
filed joint Federal and State tax returns.  
B. 
Posting Of Kao’s Bail  
Kao was arrested on September 30, 2020.  At the time of Kao’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 Kao’s arrest, Lam was informed that Kao’s Bail was set in the amount 
of $2,000,000.00.  Lam immediately contacted Merrill Lynch to withdraw funds 
totaling $2,000,000.00 from the Merrill Lynch Account to pay for Kao’s Bail.  On 
October 6, 2020, Lam requested that Merrill Lynch issue a $2,000,000.00 cashier’s 
check from the Merrill Lynch Account made payable to the United District Court of 
Hawaii.  As of the date that Lam 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, Lam went to the offices of Merrill Lynch 
and picked up the $2,000,000.00 cashier’s check for Kao’s Bail.  Later that morning, 
Lam 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 
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personally post Kao’s Bail.  Lam was accompanied by her brother, Todd.  Upon 
delivery of the $2,000,000.00 cashier’s check to Ms. Patrick, Lam was not provided 
with a receipt for posting Kao’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 subsequently used to pay 
Kao’s various legal expenses and costs (“Kao’s Legal Fees”) expended in this and 
other criminal and civil matters.  Pursuant to the Marital Agreement, Lam had a joint 
marital interest in the Merrill Lynch Account, which included the $2,000,000.00 
used for Kao’s Bail and the $1,000,000.00 expended on Kao’s Legal Fees.  
II. 
DISCUSSION 
The United States moved to apply the Bail to the restitution/fines ordered in 
connection with Kao’s sentence in this case (“United States’ Motion”).  The United 
States invoked 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. 
 
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28 USCA § 2044 (emphasis supplied).2  The United States “bears the burden of 
showing, by a preponderance of the evidence, that” the Bail belongs to Kao and that 
it is 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).  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).  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). 
 
2 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). 
 
 
 
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The Order principally relies on two facts to deny Lam her ownership interest 
in the Bail: (1) the Affidavit by Owner of Cash Bail (“Bail Affidavit”) signed and 
notarized by Kao stating that he was the owner of the cash deposited as Bail, and (2) 
that Kao was the individual account holder of the Merrill Lynch Account, the source 
of the money used to fund the Bail.  First, while it is undisputed that Kao signed the 
Bail Affidavit, Kao’s statement that he was the owner of the Bail does not necessarily 
preclude Lam’s co-ownership of the monies in the Merrill Lynch Account that 
funded the Bail.  Lam and Kao entered into the Marital Agreement, well before 
funding the Bail, agreeing that all their finances, including monies in their Accounts, 
were joint marital property.  Thus, even if Kao intended to take ownership of all the 
monies in the Merrill Lynch Account, Kao could not do so unilaterally, even by 
signing and notarizing the Bail Affidavit.  While Lam allowed Kao to use the Merrill 
Lynch Account monies for the Bail, which was simply a financial arrangement to 
deposit funds with the court to secure Kao’s appearance at trial,3 Lam never intended 
to nor did disclaim her ownership interest in the Bail. 
 
3 Although the location of the joint marital monies changed from the Merrill Lynch 
Account to the registry of the court, the ownership status of those monies remained 
the same.  In other words, the Bail constituted joint marital property and was not 
“owned” by the court. 
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Second, the fact that Kao was the individual account holder of the Merrill 
Lynch Account does not mean that Kao was the sole owner of the monies maintained 
in such account.  The Order states in relevant part as follows: 
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, to any one or more of the persons.”). 
 
Order at 6, 7.  While Section 412:4-105 states that any “deposit account held in the 
names of two or more persons may be paid, on request and according to its terms, to 
any one or more of the persons” it does not answer the second prong posed by 28 
USC § 2044, which is whether the “money belongs to the defendant [Kao].”  As 
discussed above, the money in the Merrill Lynch Account that funded the Bail was 
a joint marital asset that belonged to both Lam and Kao under their Marital 
Agreement.  Indeed, under Hawaii law, spouses are entitled to contract with each 
other, as Lam and Kao did in their Marital Agreement: 
(a) A married person may make contracts, oral and written, sealed and 
unsealed, with the married person’s spouse, or any other person, in the 
same manner as if the married person were sole. 
. . . . 
 
(c) All contracts made between spouses, whenever made, whether 
before or after June 6, 1987, and not otherwise invalid because of any 
other law, shall be valid. 
 
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Haw. Rev. Stat. § 572-22 (emphasis supplied).  Here, it is undisputed that Kao and 
Lam entered into a valid marital contract4 which provided Lam with ownership 
interest in the monies that funded the Bail. 
 
Third, 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) is distinguishable.  148 Maunalanikai Place case concerned a 
forfeiture case.  There, the non-defendant spouse sought to make a claim on real 
property subject to forfeiture under 18 U.S.C. § 983.  The non-defendant spouse 
argued “that, as a matter of Hawaii divorce law, he has acquired an interest or is 
entitled to obtain an interest” in the subject real property.  The Court held that the 
non-defendant spouse did not have standing to assert a claim on the real property.  
The Court found that the non-defendant spouse had no direct legal ownership of the 
property since he was not title owner of the property, did not contribute any funds to 
purchase the property, and never had possession of or exercised any dominion or 
control over the property. The Court also found that the defendant spouse had already 
abandoned and forfeited her interest in the real property and that it was not part of 
their divorce case. The Court went on to add that the non-defendant spouse had no 
 
4 Lam provided valuable consideration for the benefits supplied to her under the 
Marital Agreement when Lam gave up her certified public accountant career to 
become a full-time homemaker, wife and mother.  ECF No. 149.   
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legal interest in the defendant spouse’s drug proceeds or in any property that she 
acquired with her drug proceeds under Hawaii law.  
 
Unlike 148 Maunalanikai Place, Lam is not making a claim to the Bail based 
on divorce law.  To the contrary, Lam has a direct interest in the Bail pursuant to the 
valid marital contract between Lam and Kao – i.e., the Marital Agreement.  See Haw. 
Rev. Stat. § 572-22.  Lam exercised dominion and control over joint marital assets, 
including the Merrill Lynch Account, throughout her 18-year marriage to Kao.  In 
fact, Lam directly withdrew funds from the Merrill Lynch Account and posted those 
funds with this Court for Kao’s Bail.  More significantly, unlike a forfeiture action 
under 18 U.S.C. § 983, a request to apply bail under 28 U.S.C. § 2044 requires 
inquiry into the ownership of the funds used to post the bail.  The answer to that 
inquiry in this case is that funds used to post the Bail jointly belong to Lam and Kao.  
 
Finally, in determining the amount of Lam’s joint ownership interest in the 
Bail, Hawaii law is instructive.   In the instance of joint marital assets, Hawaii courts 
apply the 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, 
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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.  Id. at 484, 836 P.2d at 491. 
 
Lam had joint ownership interest in the Merrill Lynch Account at the time 
Lam withdrew $2,000,000 from the account to pay for Kao’s Bail.  Under Gussin, 
Lam owned fifty percent (50%) of the funds that were used to post the Bail.  
Accordingly, $1,000,000 of the Bail belongs to Lam.  
III. 
CONCLUSION 
Based on the foregoing, Lam respectfully requests that the Order be reversed 
and that the United States’ Motion be denied with respect to Lam’s joint interest in 
the Bail.  Lam further requests that her ownership interest in the Bail be returned to 
her as the conditions of Kao’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, March 18, 2025. 
   
 
 
 
 
 
 
/s/Philip W. Miyoshi 
 
PHILIP W. MIYOSHI 
    
Attorney for Third-Party In Interest  
 
 
 
 
 
 
 
TIFFANY JENNIFER LAM
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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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Case No: 1:21-cr-00061-LEK 
 
 
CERTIFICATE OF SERVICE 
 
CERTIFICATE OF SERVICE 
 
I hereby certify that on March 18, 2025, a copy of the foregoing filing 
will be served on all counsel of record.   
DATED: Honolulu, Hawaii, March 18, 2025. 
   
 
 
 
 
 
 
/s/Philip W. Miyoshi 
 
PHILIP W. MIYOSHI 
    
Attorneys for Third-Party In Interest 
 
 
 
 
 
 
 
TIFFANY JENNIFER LAM      
 
 
Case 1:21-cr-00061-LEK     Document 164     Filed 03/18/25     Page 12 of 12  PageID.1420

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