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APPEAL OF MAGISTRATE JUDGE DECISION to District Court by Tiffany… — PPP Attempt Conspiracy Legal Filings (Dkt. 164)
No. 1:21-cr-00061-LEK · Doc. 164 · Docket on CourtListener
Summary
Third-party in interest Tiffany Jennifer Lam's objection to the order granting the United States' motion to apply defendant Martin Kao's bond deposit to his 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 argues that Magistrate Judge Kenneth J. Mansfield erred in finding under 28 U.S.C. § 2044 that she had no ownership interest in the $2,000,000.00 cash bail posted for Kao. The objection states that the bail came from a Merrill Lynch account that was joint marital property under a marital agreement. It argues that Kao's bail affidavit and Haw. Rev. Stat. § 412:4-105 do not settle ownership and that under Hawaii partnership principles $1,000,000 of the bail belongs to her. It asks that the order be reversed.
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Case 1:21-cr-00061-LEK Document 164 Filed 03/18/25 Page 1 of 12 PageID.1409
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, ) Case No: 1:21-cr-00061-LEK
)
Plaintiff, )
) THIRD-PARTY IN INTEREST
vs. ) TIFFANY JENNIFER LAM’S
) OBJECTION TO THE ORDER
MARTIN KAO, ) GRANTING THE UNITED
) STATES’ MOTION FOR ORDER
Defendant. ) 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
)
)
)
Case 1:21-cr-00061-LEK Document 164 Filed 03/18/25 Page 2 of 12 PageID.1410
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 SUMMARY 1
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.
1
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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,
2
Case 1:21-cr-00061-LEK Document 164 Filed 03/18/25 Page 4 of 12 PageID.1412
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
3
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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.
4
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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).
5
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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.
6
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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.
7
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Haw. Rev. Stat. § 572-22 (emphasis supplied). Here, it is undisputed that Kao and
Lam entered into a valid marital contract 4 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.
8
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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,
9
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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
10
Case 1:21-cr-00061-LEK Document 164 Filed 03/18/25 Page 12 of 12 PageID.1420
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
UNITED STATES OF AMERICA, ) Case No: 1:21-cr-00061-LEK
)
Plaintiff, )
) CERTIFICATE OF SERVICE
vs. )
)
MARTIN KAO, )
)
Defendant. )
)
)
)
)
)
)
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
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