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REPLY by PacMar Technologies LLC as to Martin Kao re 190 MOTION for… — PPP Attempt Conspiracy Legal Filings (Dkt. 196)

No. 1:21-cr-00061-LEK · Doc. 196 · Docket on CourtListener

Summary

A reply filed April 14, 2026 by movant PacMar Technologies LLC in United States v. Martin Kao, No. 1:21-cr-00061-LEK, in the U.S. District Court for the District of Hawaii (Doc. 196). It supports PacMar's Renewed Motion for Restitution (Dkt. 190) under 18 U.S.C. § 3663A and § 3664 and answers Kao's opposition (Dkt. 195), which argues the motion lacks the specificity the court requested at an April 30, 2025 hearing. The reply relies on a sworn declaration from the lead Buckley attorney estimating at least $192,963.38 in legal fees attributable to the Hawaii grand jury investigation, and an alternative calculation of $165,000. It cites the Mandatory Victim Restitution Act and cases including United States v. Battista, and argues against denial with prejudice. It asks the court to order Kao to pay $192,963.38 or, alternatively, no less than $165,000.

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Case 1:21-cr-00061-LEK Document 196 Filed 04/14/26 Page 1 of 11 PageID.2453

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, CR. NO. 21-00061 LEK

Plaintiff, MOVANT PACMAR
TECHNOLOGIES LLC'S REPLY IN
vs. SUPPORT OF RENEWED MOTION
FOR RESTITUTION PURSUANT TO
MARTIN KAO, 18 U.S.C. § 3663A AND § 3664;
CERTIFICATE OF SERVICE
Defendant.
Case 1:21-cr-00061-LEK Document 196 Filed 04/14/26 Page 2 of 11 PageID.2454

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

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