ORDER DENYING THIRD-PARTY IN INTEREST TIFFANY JENNIFER LAM'S OBJECTION TO THE ORDER GRANTING… — USA v. Kao (Dkt. 170)

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An order denying Third-Party in Interest Tiffany Jennifer Lam's objection to the 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 April 4, 2025 as Document 170 in United States v. Martin Kao, CR. NO. 21-00061 LEK, in the U.S. District Court for the District of Hawaii. The Court treats the magistrate judge's order as a report and recommendation and reviews it de novo. It finds that Kao was the sole owner of the Merrill Lynch Account, citing the account documentation and Kao's attestation of ownership of the bond funds. The Court concludes that the Government's motion was correctly granted, and Lam's objection is denied.

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UNITED STATES DISTRICT COURT 
 
DISTRICT OF HAWAII 
  
UNITED STATES OF AMERICA, 
 
Plaintiff,  
 
 
vs.  
 
MARTIN KAO, 
 
Defendant. 
CR. NO. 21-00061 LEK 
 
 
 
 
ORDER DENYING THIRD-PARTY IN INTEREST 
TIFFANY JENNIFER LAM’S OBJECTION TO THE 
ORDER GRANTING UNITED STATES’ MOTION FOR 
ORDER AUTHORIZING APPLICATION OF DEFENDANT’S BOND 
DEPOSIT TO PAYMENT OF SPECIAL ASSESSMENT AND  
RESTITUTION [ECF NO. 156], [FILED 3/18/25 (DKT. NO. 164)] 
 
 
 
Third-Party in Interest Tiffany Jennifer Lam (“Lam”) 
appeals the magistrate judge’s order finding that, under Title 
28 United States Code Section 2044, Lam does not have any 
ownership interest in the funds posted as bail for Lam’s 
husband, Defendant Martin Kao (“Kao”), in his criminal matter, 
United States v. Kao, 21-00061 LEK. See 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, filed 3/18/25 (dkt. no. 164) (“Appeal”). 
 
 
The Court finds the matter suitable for decision 
without a hearing pursuant to Rule LR12.2(a)(1) of the Criminal 
Local Rules. After careful review of the submissions and 
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applicable law, the Appeal is hereby DENIED and the magistrate 
judge’s ruling is upheld as follows. 
 
 
 
 
 
BACKGROUND 
 
 
This matter arises out of a criminal prosecution 
against Kao. A criminal complaint was filed against Kao on 
September 29, 2020. [Criminal Complaint, filed 9/20/20 (dkt. no. 
1).] Kao was arrested and was subsequently released on bail 
conditions, which included the posting of $2,000,000 bond 
secured by cash. [Minutes: Court Action: EP: Telephonic 
Detention Hearing held, filed 10/2/20 (dkt. no. 8).] Kao was 
indicted on May 6, 2021 and charged with three counts of wire 
fraud, in violation of Title 18 United States Code Section 1343 
(“Counts 1-3”), and five counts of money laundering, in 
violation of Title 18 United States Code Section 1957 (“Counts 
4-8”). [Indictment, filed 5/6/21 (dkt. no. 31).] Forfeiture of 
any real or personal property that constituted or was derived 
from proceeds traceable to the alleged offenses of wire fraud 
and money laundering was also sought. [Id. at pgs. 17-20.] 
 
 
Kao entered guilty pleas to Counts 1 through 8, which 
was accepted on September 22, 2022. [Acceptance of Plea of 
Guilty, Adjudication of Guilt and Notice of Sentencing, filed 
9/22/22 (dkt. no. 79).] On February 13, 2025, Kao was sentenced 
in this matter as well as to Count 1 of the Indictment filed in 
United States v. Kao, Cr. No. 23-00003 LEK, and received a 
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sentence of eighty-seven months of incarceration, five years of 
supervised release as to Counts 1 through 3 in Cr. No. 21-00061 
and Count 1 in Cr. No. 23-00003, and three years of supervised 
release as to Counts 4 through 8 in Cr. No. 21-00061, to run 
concurrently; restitution in the amount of $12,841,490; 12,000 
hours of community service; and special assessment fees of 
$900.00. [Amended Judgment in a Criminal Case (“Amended 
Judgment”), filed 2/24/25 (dkt. no. 153), at 3-4, 6-7; Cr. 23-
00003 LEK, Amended Judgment in a Criminal Case, filed 3/28/25 
(dkt. no. 52).] He was ordered to surrender on March 25, 2025 
for his term of imprisonment. [Id. at pg. 3.] Pursuant to the 
order of forfeiture filed on August 31, 2023, Plaintiff United 
States of America (“the Government”) was granted an entry of a 
forfeiture money judgment in the amount of $12,841,490.00, which 
included $2,000,000 seized from Kao’s personal investment 
account with Merrill Lynch. [Order of Forfeiture (Money Judgment 
and Preliminary Order of Forfeiture (Specific Property), filed 
8/31/23 (dkt. no. 116), at 7.] 
 
 
On March 4, 2025, the magistrate judge granted the 
Government’s motion seeking application of Kao’s $2,000,000 bond 
deposit to his special assessment fee and restitution amount. 
[Order Granting the United States’ Motion for Order Authorizing 
Application of Defendant’s Bond Deposit to Payment of Special 
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Assessment and Restitution (“3/4 Order”), filed 3/4/25 (dkt. no. 
156).]1 
 
 
Lam filed her appeal from the magistrate judge’s 3/4 
Order on March 18, 2025.  
STANDARDS 
 
 
A district judge may designate a magistrate judge to 
determine any pretrial matter pending before the court and may 
reconsider any pretrial matter where it is shown that the 
magistrate judge’s order is “clearly erroneous or contrary to 
law.” 28 U.S.C. § 636(b)(1)(A); see also Fed. R. Civ. P. 
72(b)(1) (empowering magistrate judges to enter findings and 
recommendations that are dispositive of a claim). A magistrate 
judge’s non-dispositive order is deferred to unless “clearly 
erroneous or contrary to law.” Grimes v. City & Cnty. of San 
Francisco, 951 F.2d 236, 241 (9th Cir. 1991) (citing Fed. R. 
Civ. P. 72(a), 28 U.S.C. § 636(b)(1)(A)). The “clearly 
erroneous” standard applies to the factual findings by the 
magistrate judge and the “contrary to law” standard applies to 
the legal conclusions by that judge. See Williams v. United 
States, Civ. No. 08-00437 ACK-BMK, 2012 WL 406904, at *3 (D. 
Hawai`i Feb. 8, 2012). A finding of fact may be set aside as 
clearly erroneous only if the court has “a definite and firm 
 
 
1 The Court construes the 3/4 Order as a report and 
recommendation for purposes of review in this appeal. 
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conviction that a mistake has been committed.” Burdick v. 
C.I.R., 979 F.2d 1369, 1370 (9th Cir. 1992). “A decision is 
contrary to law if it applies an incorrect legal standard or 
fails to consider an element of the applicable standard.” 
Williams, 2012 WL 406904, at *3. 
 
 
For a magistrate judge’s findings and recommendation, 
“[t]he district judge must determine de novo any part of the 
magistrate judge’s disposition that has been properly objected 
to.” Fed. R. Civ. P. 72(b)(3); see also United States v. Reyna-
Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (“The statute makes 
it clear that the district judge must review the magistrate 
judge’s findings and recommendations de novo if objection is 
made, but not otherwise.”) (emphasis in original). Because the 
magistrate judge’s order in this matter could be construed as a 
dispositive order, the Court elects to treat the order as a 
report and recommendation and analyzes the objections to it 
under the de novo standard.  
DISCUSSION 
 
 
Lam submits that she posted the $2,000,000 for Kao’s 
bail by personally depositing funds that she had withdrawn from 
an account held with the financial institution, Merrill Lynch, 
specifically Account No. **-*2641 (“Merrill Lynch Account”). 
[Appeal at 3-4.] She contends that she has “a joint marital 
interest in the Merrill Lynch Account, which included the 
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$2,000,000.00” posted for Kao’s bond securing his pretrial 
release. [Id. at 5.] Lam states that she and Kao, when they 
married in 2007, “agreed that all their financial assets, 
including [their home] and all their joint and individual bank 
and financial accounts . . ., were joint marital assets to be 
considered part of their marital estate[.]” [Id. at 2.] Other 
than her written declaration attesting to the marital agreement, 
there is no documentation (such as a written marital agreement) 
provided by Lam. See 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, filed 2/13/25 (dkt. no. 
149), Declaration of Tiffany Jennifer Lam.  
The Government, on the other hand, disputes that Lam 
has an ownership interest in the Merrill Lynch account. See 
Response to 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 
(ECF No. 149) (“Response”), filed 2/27/25 (dkt. no. 154).] The  
Government points to the documentation produced regarding the 
Merrill Lynch Account as stating that this account was held 
solely by Kao and was not identified as a joint account. 
[Response at 3, 5 (citing Exh. A, Letter from Bank of America, 
N.A., dated 8/28/20 (“Exh. A”)).] Indeed, the signature card for 
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the Merrill Lynch Account identifies the account holder or 
trustee as “Martin Y. Kao”; [Response, Exh. A at BOA-317-008-
DOJ-0000001;] the Merrill Lynch Client Relationship Agreement 
Form for Individual, Joint or Retirement Accounts identifies the 
client name as “Martin Y. Kao; [id., at BOA-317-008-DOJ-
0000004;] and the Merrill Lynch brokerage account report 
reflecting a net value of $2,712,085 as of an unknown date lists 
the account as being a single ownership; [id., at MLPFS-00202-
004-DOJ-0000135.] 
 
 
Payment of a fine with money that has been posted by 
or on behalf of a defendant for an appearance bond is governed 
by 28 United States Code Section 2044, which states: 
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. 
 
 
 
Here, the Government made its motion pursuant to 
Section 2044 for the $2,000,000 posted for Kao’s appearance 
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bond. If the money posted belonged to Kao, then it follows that 
it can be held and paid over to be applied to the fine and 
restitution that Kao was ordered to pay as part of his criminal 
sentence, pursuant to Section 20244. Was Kao the owner of the 
money used to post his bond? The evidence demonstrates that he 
was. 
 
 
The funds used to post the appearance bond were 
derived from the Merrill Lynch Account, and the documentation 
presented by the Government establishes Kao’s control over the 
Merrill Lynch Account in that he is listed as its sole owner. 
Further, Kao attested that he was the owner of the funds used 
for the bond, which were to be returned to him upon exoneration 
of the bond. [Affidavit of Cash Bail, filed 10/08/20 (dkt. no. 
14) (filed under seal).] There is no evidence that the funds 
were held jointly or by Lam individually. 
 
 
As to Lam’s arguments regarding the spousal agreement 
to share their expenses, income and property, the Court does not 
doubt her veracity. However, marital property ownership 
principles are inapplicable to the situation at hand because the 
issue here is not about property ownership and division when a 
divorce is granted. See, e.g., Haw. Rev. Stat. § 580-47(a)(3) 
(stating that upon granting a divorce, the court may order the 
division of “the estate of the parties, real, personal, or 
mixed, whether community, joint, or separate; . . . .”). Rather, 
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the issue is whether there is evidence establishing her 
ownership, shared or otherwise, of the Merrill Lynch Account. 
Her arguments about marital property division are therefore 
unpersuasive. Likewise unpersuasive is her assertion that she 
has established ownership through her actions by being 
responsible for withdrawing the money, obtaining a cashier’s 
check, and depositing this check to post the appearance bond. 
These actions were certainly supportive of her husband, for 
which she is to be commended, but are not evidence of ownership 
of the Merrill Lynch Account.  
 
 
The Court, after its de novo review, FINDS that Kao 
was the sole owner of the Merrill Lynch Account. It CONCLUDES 
that the Government’s motion was correctly granted and that the 
magistrate judge’s order that the $2,000,000 belonging to Kao 
and deposited by him for the purposes of a criminal appearance 
bail bond is to be held and paid over to the Government to be 
applied to the payment of any assessment, fine, restitution, or 
penalty imposed upon Kao is SUSTAINED. 
 
 
 
 
 
CONCLUSION 
 
 
Third-Party in Interest Tiffany Jennifer Lam’s 
Objection to the Order Granting United States’ Motion for Order  
 
 
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Authorizing Application of Defendant’s Bond Deposit to Payment 
of Special Assessment and Restitution, filed 3/18/25 (dkt. no. 
164) is hereby DENIED. 
 
 
DATED AT HONOLULU, HAWAII, April 4, 2025. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UNITED STATES OF AMERICA VS. MARTIN KAO; CR 21-00061 LEK; ORDER 
DENYING THIRD-PARTY IN INTEREST TIFFANY JENNIFER LAM’S OBJECTION 
TO THE ORDER GRANTING UNITED STATES’ MOTION FOR ORDER 
AUTHORIZING APPLICATION OF DEFENDANT’S BOND DEPOSIT TO PAYMENT 
OF SPECIAL ASSESSMENT AND RESTITUTION [ECF NO. 156], [FILED 
3/18/25 (DKT. NO. 164)] 
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