REPLY by PacMar Technologies LLC as to Martin Kao re 190 MOTION for Hearing for Restitution… — USA v. Kao (Dkt. 196)

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Movant PacMar Technologies LLC's Reply in Support of Renewed Motion for Restitution Pursuant to 18 U.S.C. § 3663A and § 3664, Document 196, filed 04/14/26, in the U.S. District Court for the District of Hawaii, United States of America v. Martin Kao, CR. NO. 21-00061 LEK. PacMar states that Defendant Martin Kao's Memorandum in Opposition [Dkt. 195] makes a single argument, that the Renewed Motion lacks the specificity the Court requested at the April 30, 2025 hearing. PacMar argues that a sworn declaration of Preston Burton and highlighted invoices provide what the Court requested, and cites case law on restitution under the Mandatory Victim Restitution Act. It asks the Court to order Defendant Kao to pay restitution in the amount of $192,963.38, or, alternatively, no less than $165,000.

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KOBAYASHI SUGITA & GODA, LLP 
 
DAVID M. LOUIE                         2162 
JESSE W. SCHIEL                         7995 
First Hawaiian Center 
999 Bishop Street, Suite 2600 
Honolulu, Hawaii 96813 
Telephone: (808) 535-5700 
Facsimile: (808) 535-5799 
E-mail: 
dml@ksglaw.com; jws@ksglaw.com 
 
Attorneys for Movant 
PACMAR TECHNOLOGIES LLC f/k/a 
MARTIN DEFENSE GROUP, LLC f/k/a 
NAVATEK LLC 
 
IN THE UNITED STATES DISTRICT COURT 
 
FOR THE DISTRICT OF HAWAII 
 
UNITED STATES OF AMERICA, 
 
 
 
Plaintiff, 
 
 
vs. 
 
MARTIN KAO, 
 
 
 
Defendant. 
CR. NO. 21-00061 LEK 
 
MOVANT PACMAR 
TECHNOLOGIES LLC'S REPLY IN 
SUPPORT OF RENEWED MOTION 
FOR RESTITUTION PURSUANT TO 
18 U.S.C. § 3663A AND § 3664; 
CERTIFICATE OF SERVICE 
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MOVANT PACMAR TECHNOLOGIES LLC'S REPLY IN SUPPORT OF 
RENEWED MOTION FOR RESTITUTION PURSUANT TO 
18 U.S.C. § 3663A AND § 3664 
I.     INTRODUCTION 
PACMAR TECHNOLOGIES LLC f/k/a MARTIN DEFENSE GROUP, LLC 
f/k/a NAVATEK LLC ("PacMar") respectfully submits this Reply in support of its 
Renewed Motion for Restitution [Dkt. 190] (“Renewed Motion”) and in response 
to Defendant Martin Kao's Memorandum in Opposition to the Renewed Motion 
[Dkt. 195] ("Kao MIO"). 
Kao's MIO makes a single argument: that PacMar's Renewed Motion fails to 
provide the "specificity" the Court requested at the April 30, 2025 hearing (the "2025 
Hearing").  As demonstrated below, this argument mischaracterizes what PacMar 
has submitted, misrepresents what the Court actually required, and ignores that the 
Mandatory Victim Restitution Act (“MVRA”) mandates restitution for PacMar as a 
determined victim of Mr. Kao's criminal offenses.  Moreover, well-established case 
law confirms that PacMar's reasonable-estimate methodology is precisely the 
approach courts require under the MVRA. 
PacMar's Renewed Motion provides exactly what the Court requested: a 
sworn declaration from the lead Buckley attorney who performed the work, Preston 
Burton, attesting to the apportionment of legal fees between the Hawaii and D.C. 
investigations, supported by highlighted invoices identifying the relevant billing 
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entries.  This is the "affidavit" format the Court itself suggested.  See Transcript of 
2025 Hearing ("Tr."), attached to the Renewed Motion as Exhibit B, at 11:19-22. 
II.    ARGUMENT 
A.      PacMar Has Provided the Specificity and Documentation 
the Court Requested 
Kao contends that PacMar has merely applied "generalized percentage 
reductions" to lump-sum billing.  Kao MIO at 5-6.  This fundamentally 
mischaracterizes PacMar's submission.  PacMar has provided: 
First, a sworn Declaration of Preston Burton, formerly a partner at Buckley 
LLP and now a partner at Orrick, Herrington & Sutcliffe LLP, the lead attorney who 
personally directed Buckley's representation of PacMar in connection with both the 
USAO Hawaii and USAO DC grand jury investigations.  See Declaration of Preston 
Burton, attached to the Renewed Motion (“Burton Decl.”) ¶¶ 1-2.  Mr. Burton is the 
person best positioned to assess what the invoiced work entailed, having led the 
engagement, reviewed the invoices, consulted with two remaining team members, 
and reviewed correspondence with the government regarding document productions.  
See id. ¶¶ 3, 7. 
Second, Mr. Burton's informed, professional estimate -- based on his personal 
recollection, his review of the invoices, and consultation with his colleagues -- that 
at least 90% of the invoiced work through October 18, 2021 was related to one or 
both of the grand jury investigations, and that at least 25% of that work was 
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attributable to the Hawaii investigation, resulting in a figure of at least $192,963.38.  
See id. ¶ 7. 
Third, a corroborating alternative calculation based on PacMar's review and 
highlighting of Buckley invoice entries related to document collection, review, and 
production activities, totaling approximately $330,000, divided evenly between the 
two overlapping criminal investigations, yielding $165,000.  See id. ¶¶ 8-9. 
Fourth, the highlighted Buckley invoices themselves (Exhibit C), with entries 
related to collection, review, and production activities specifically identified.  See 
id. ¶ 8. 
Fifth, Mr. Burton's attestation under penalty of perjury that both figures likely 
understate the actual amount attributable to the Hawaii investigation, because they 
exclude post-October 2021 work, certain other collection and review entries, 
discussions with company personnel, expenses, and database costs.  See id. ¶ 9 
(emphasis added). 
This is precisely the type of submission the Court contemplated.  At the 2025 
Hearing, the Court stated that if PacMar intended to claim restitution for the 
highlighted entries, it needed "to have somebody explain in some sort of format, like 
you want to do it -- an affidavit."  Tr. at 11:19-22.  The Burton Declaration is that 
affidavit. 
B.      Kao Mischaracterizes the Court's Guidance in the 2025 Hearing 
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Kao's MIO selectively quotes the 2025 Hearing transcript to suggest the Court 
demanded a line-by-line annotation of every invoice entry.  See Kao MIO at 6-8.  A 
complete reading of the transcript reveals a far more nuanced record. 
The Court acknowledged flexible formats and did not prescribe a single 
required format, stating: "I'm not going to tell you how to do it, but there must be 
some sort of format they can come up with; these are what we're claiming for and 
then you can have an annotation."  Tr. at 22:14-18.   
The Court's central concern was the Hawaii nexus, not line-by-line 
granularity.  The Court explained that its core requirement was a demonstrable 
connection between the claimed fees and the Hawaii prosecution: "I have to see a 
direct connection to the District of Hawaii prosecution in the sense that because the 
government was prosecuting Mr. Kao, that created the victim, a responsibility and 
obligation, right, to expend time and attorney's fees in seeking these documents, 
producing them to the government."  Tr. at 12:11-17.  The Burton Declaration 
provides precisely this nexus. 
The Court endorsed the process PacMar followed.  AUSA Nolan proposed 
that PacMar revisit its entries, remove those that cannot be justified as Hawaii-
related, and for the remainder, "provide at least a short explanation as to why that 
particular billing entry relates."  Tr. at 19:15-17.  The Court responded: "That sounds 
great, Mr. Nolan.  That sounds terrific."  Id. at 20:23-24.  PacMar has substantially 
complied: the highlighted entries in Exhibit C represent the entries PacMar is 
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claiming, non-Hawaii entries have been excluded, and Burton's Declaration provides 
the overarching explanation for why those entries relate to the Hawaii investigation. 
The Court recognized that some entries are self-evident.  Mr. Nolan observed: 
"I mean some are plain on their face."  The Court agreed: "Yeah."  Tr. at 19:6-7.  
Entries such as "Review subpoena, conference with government attorneys regarding 
scope" and "Review documents to be produced pursuant to subpoena for attorney-
client privilege" (Tr. at 11:8-10) are plainly compensable on their face and require 
no further annotation. 
The Court itself did not want to conduct a line-by-line review.  Tr. at 9:11-13.  
The Court's purpose was to illustrate its concerns, not to mandate that PacMar 
produce an entry-by-entry annotation of hundreds of time entries from work 
performed over five years ago. 
C.      PacMar's Estimate Is Conservative, Well-Supported, and 
Appropriate Given the Nature of the Work 
 
Mr. Burton attests that the workstreams for the overlapping Hawaii and D.C. 
criminal investigations were not tracked separately by Buckley.  See Burton Decl. ¶ 
7.  This is not a deficiency in PacMar's presentation -- it is a factual reality of how 
overlapping grand jury investigations are handled in practice, particularly where, as 
here, the investigations involved overlapping responsive documents, document 
custodians, and time periods.  See id. ¶ 6. 
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The Court itself recognized this practical reality at the 2025 Hearing, 
suggesting that a magistrate judge could assist the parties in working out an 
agreement on format -- a suggestion that reflects the Court’s understanding that 
reasonable estimation and negotiation, not forensic precision, were the appropriate 
path forward.  See Tr. at 23:5-8.  The Court also stated it would not scrutinize the 
reasonableness of the hourly rates: "I would not look at reasonableness because it 
was charged and I'm assuming it was, you know, paid by the victim."  Id. at 22:4-6. 
PacMar's estimate is conservative by any measure.  Two independent 
methodologies -- Burton's 90%/25% estimate yielding $192,963.38, and the 50/50 
split of highlighted entries yielding $165,000 -- produce figures in the same range.  
See Section II. A, supra, at 2-3.  Both are attested by the billing attorney to likely 
understate the true amount.  And PacMar's current request of $192,963.38 is a 
fraction of the $858,933.41 the United States itself requested on PacMar's behalf in 
the prior round.  See Dkt. 177 at 6 (US Reply Brief requesting $858,933.41 in 
restitution).  PacMar has dramatically narrowed its claim in a good-faith effort to 
address the Court's concerns.  The United States continues to support PacMar's 
entitlement to restitution, having filed a Response in Support of PacMar's Renewed 
Motion.  See Dkt. 193. 
D.      Case Law Supports PacMar's Reasonable-Estimate Methodology 
Kao's MIO implicitly demands a level of precision that is neither required by 
the MVRA nor supported by the case law.  To the contrary, well-established 
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authority confirms that PacMar's approach is precisely the methodology courts 
require. 
The Ninth Circuit has consistently held that restitution amounts need only be 
estimated with "reasonable certainty" based on the facts in the record. United States 
v. Kennedy, 643 F.3d 1251, 1261 (9th Cir. 2011) (the government must provide 
evidence sufficient to allow the court to estimate, based upon facts in the record, “the 
full amount of the victim's losses with some reasonable certainty"); United States v. 
Doe, 488 F.3d 1154, 1160 (9th Cir. 2007) (upholding restitution award based on 
reasonable estimate of future counseling costs).  This standard does not require exact 
proof or forensic-level documentation.  It requires a sound methodology supported 
by competent evidence.  As discussed above, PacMar has provided exactly that. 
A leading case on attorneys' fees as restitution under the MVRA is United 
States v. Battista, 575 F.3d 226, 233-34 (2d Cir. 2009), which PacMar cited in its 
Renewed Motion.  In Battista, the Second Circuit upheld a restitution award for 
attorneys' fees incurred by the victim (the NBA) in assisting the government's 
investigation and prosecution of the criminal offense.  Id. at 233-34.  Critically, the 
Battista court held that attorneys' fees and accounting costs qualify as "other 
expenses" under 18 U.S.C. § 3663A(b)(4)1, and the district court properly "parsed 
out" compensable expenses using a reasonable methodology -- it did not require that 
 
1  As used in the Renewed Motion, the citation to 18 U.S.C. § 3663A(a)(4)(A) is corrected to 18 
U.S.C. § 3663A(b)(4). 
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every single billing entry be independently verified.  Id.  This is directly analogous 
to PacMar's approach, where Mr. Burton has "parsed out" the fees attributable to the 
Hawaii investigation using two reasonable methodologies. 
United States v. Afriyie, 27 F.4th 161, 169 (2d Cir. 2022), specifically 
recognized that fees and costs incurred in responding to government subpoenas and 
document requests qualify as compensable "other expenses" under § 3663A(b)(4).  
The court explained that the victim entity "had to respond to numerous subpoenas 
and document requests from the government . . . and needed counsel to appropriately 
respond."  Id.  Kao’s MIO does not, and cannot, dispute that the fees and costs 
PacMar seeks as restitution are recoverable under applicable law.  This is precisely 
the nature of PacMar's claimed expenses -- Buckley was engaged specifically to 
respond to grand jury subpoenas in the Hawaii investigation, and the highlighted 
invoice entries reflect work related to document collection, review, production, and 
privilege screening in connection with those subpoenas. 
E.   
The MVRA's Mandatory Framework Precludes Denial Based on 
Documentation Difficulties 
The Supreme Court has made clear that the MVRA's restitution provisions are 
mandatory, not discretionary.  See Dolan v. United States, 560 U.S. 605, 611-12 
(2010) (holding that failure to meet the 90-day deadline does not divest the court of 
authority to order restitution where the court has indicated its intent to do so).  The 
Ninth Circuit has applied this principle, holding that the 90-day period is a "claims-
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processing rule, not a jurisdictional limitation."  United States v. Moreland, 622 F.3d 
1147, 1172 (9th Cir. 2010).  This position is generally agreed to by Kao.  See Kao 
MIO at 3.  Where a victim has been determined to be entitled to restitution, the Court 
retains both the authority and the obligation to determine the appropriate amount.  
Denying PacMar's claim with prejudice simply because the billing records are not 
amenable to line-by-line parsing would effectively nullify the MVRA's mandatory 
restitution requirement for any case involving overlapping investigations or complex 
billing arrangements -- a result inconsistent with both the statute and Supreme Court 
precedent. 
F.      Denial With Prejudice Is Inappropriate 
Kao requests that PacMar's Renewed Motion be denied in its entirety with 
prejudice.  See Kao MIO at 8.  This request is contrary to the Court's own findings, 
the MVRA's mandatory restitution framework, and the record in this case. 
The Court has already determined that PacMar is entitled to restitution.  At 
the 2025 Hearing, the Court stated unequivocally: 
"I do think [PacMar is] legally entitled to certain 
restitution and they're not denied because of the arbitration 
award, but I just can't tell for lack of specificity." 
 
Tr. at 23:21-24.  The Court denied the prior request without prejudice, specifically 
to afford PacMar "an opportunity to then recalibrate and provide the documentation" 
to support its claim.  Id. at 23:2-3.  The Court imposed no deadline: "I won't give 
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you any deadline.  You guys work it out and then you file it and we'll schedule a 
hearing and go forward from there."  Id. at 24:1-4. 
The Court's statements reflect a clear intent to see the restitution issue resolved 
on the merits, not abandoned due to documentation challenges. The MVRA 
mandates restitution for qualifying victims.  Restitution under 18 U.S.C. § 3663A is 
mandatory, not discretionary.  The Court has determined -- and Kao has not 
challenged -- that PacMar is a victim of Mr. Kao's criminal offenses, as confirmed 
by USPO Officer Ms. Nieling.  See Dkt. 177-1, Exhibit 1 (USPO's Victim Finding).  
Denying restitution with prejudice would improperly deprive a determined victim of 
the mandatory restitution to which the Court has already found PacMar is legally 
entitled.  See Dolan, 560 U.S. at 611-12; Moreland, 622 F.3d at 1172. 
III.    CONCLUSION 
For the foregoing reasons, PacMar respectfully requests that this Court grant 
its Renewed Motion for Restitution and order Defendant Kao to pay restitution to 
PacMar in the amount of $192,963.38, or, alternatively, no less than $165,000. 
DATED: Honolulu, Hawaii, April 14, 2026. 
/s/ Jesse W. Schiel  
 
 
 
DAVID M. LOUIE 
JESSE W. SCHIEL 
 
Attorneys for Movant 
PACMAR TECHNOLOGIES LLC 
f/k/a MARTIN DEFENSE GROUP, 
LLC f/k/a NAVATEK LLC
Case 1:21-cr-00061-LEK     Document 196     Filed 04/14/26     Page 11 of 11  PageID.2463

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