Exhibit B, Reply in Support of Motion for Return of Property — United States v. Martin Kao (Document 95-2)

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Document 95-2, marked Exhibit B and filed March 23, 2023 in United States of America v. Martin Kao, CR. NO. 21-00061 LEK, in the U.S. District Court for the District of Hawaii, reproduces the reply filed February 10, 2023 as Document 90 by movant PacMar Technologies LLC in support of its motion for return of property under Rule 41(g) of the Federal Rules of Criminal Procedure. PacMar argues that it bought and paid for Kao's Company Cellphone and its service plan, and that under its policies Kao had no reasonable expectation of privacy in the phone's data, citing City of Ontario, Cal. v. Quon, 560 U.S. 746 (2010). It argues that Kao has no colorable Fifth Amendment claim because the DOJ already holds the phone and its data. The reply asks for an order directing the return of PacMar's data from the phone.

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Exhibit B
Case 1:21-cr-00061-LEK   Document 95-2   Filed 03/23/23   Page 1 of 14     PageID.785

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

REPLY IN SUPPORT OF MOTION
FOR RETURN OF PROPERTY
PURSUANT TO RULE 41(G) OF
THE FEDERAL RULES OF
CRIMINAL PROCEDURE;
SUPPLEMENTAL DECLARATION
OF JAMES TOSHIZO OTA;
CERTIFICATE OF SERVICE

REPLY IN SUPPORT OF MOTION FOR RETURN OF PROPERTY
PURSUANT TO RULE 41(G) OF THE FEDERAL RULES OF
CRIMINAL PROCEDURE
Defendant Kao’s Memorandum in Opposition [Dkt. No. 89] (“MIO”) is
fraught with attempts to mischaracterize PacMar’s request for the return of its
Case 1:21-cr-00061-LEK   Document 90   Filed 02/10/23   Page 1 of 8     PageID.517
Case 1:21-cr-00061-LEK   Document 95-2   Filed 03/23/23   Page 2 of 14     PageID.786

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property which is in the possession of the DOJ, while raising no actual or credible
objections to the return of such property.1  Defendant Kao raises only hypothetical
and speculative objections based on these mischaracterizations and attempts to
mislead the Court on the applicable standards of law relevant to this Motion.
Contrary to Defendant Kao’s unsupported allegations of fact, PacMar owned the
cellphone in question and retained the right to monitor and inspect the cellphone at
any time.  Contrary to Defendant Kao’s misplaced assertions of law, PacMar is
neither a government entity seeking to investigate the cellphone nor is it requesting
access to unknown information in the DOJ’s possession.  PacMar is simply seeking
the return of its own property—that is it.  For the reasons explained in greater detail
below, Defendant Kao’s arguments fail and the Court should grant the Motion.
I.
PacMar Owns Defendant Kao’s Company Cellphone and Defendant
Kao had No Reasonable Expectation of Privacy for Data on His
Company Cellphone.
As admitted to by Defendant Kao in his MIO, PacMar bought and paid for
both the Company Cellphone and the ongoing service plan with Verizon.  See MIO
at 13; Exhibit 5 to Motion at 2.  Defendant Kao would have the Court ignore this
fact, and argues instead that he “had possession and use of the phone.”  MIO at 13.
However, Defendant Kao had the possession and use of the cellphone because it was

1 All references and short titles used herein are the same as those used and identified
in PacMar’s Motion.
Case 1:21-cr-00061-LEK   Document 90   Filed 02/10/23   Page 2 of 8     PageID.518
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issued to him by PacMar, subject to the conditions and restrictions on use set forth
in PacMar’s Information System Security Policies and Procedures Manual and
Employee Mobile Device Policy.  See Exhibits 3 and 4 to Motion.  Under these
policies, PacMar retained a right to “monitor equipment, systems, and network
traffic at any time . . . .”  Exhibit 3 to Motion at 8.  Defendant Kao therefore had no
reasonable expectation of privacy for the data on his Company Cellphone, as PacMar
had, at all times, a right to monitor and inspect such data to ensure proper use of the
cellphone in furtherance of its business operations and security policies.2  See City
of Ontario, Cal. v. Quon, 560 U.S. 746 (2010) (“Even if he could assume some level
of privacy would inhere in his messages, it would not have been reasonable for [the
employee] to conclude that his messages were in all circumstances immune from
scrutiny.”); accord Mintz v. Mark Bartelstein & Associates, Inc., 885 F. Supp. 2d
987, 1000 (C.D. Cal. 2012) (explaining “the Supreme Court found [in Quon] that
the employee ‘had only a limited expectation’ of privacy in the text messages” but
not in the other data associated with an employer-owned cellphone).3

2 PacMar, as a federal contractor, is in fact under a heightened duty to maintain the
security of its information and equipment, beyond that of a typical private-sector
employer.  See Ota Supp. Decl. ¶ 6.
3 Defendant Kao also suggests that his relinquishment of the cellphone to the DOJ
was voluntary, see MIO at 13 (“It is believed Mr. Kao cooperated with the US.”),
further eroding any claims of an expectation of privacy in the cellphone and its data.
See United States v. Wahchumwah, 710 F.3d 862, 867 (9th Cir. 2013) (“[A]
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Defendant Kao also argues, without merit or any supporting evidence or
authority, that the DOJ treated the Company Cellphone as his property when it was
seized during his arrest.  See MIO at 13.  This is untrue.  PacMar’s communications
with the DOJ, the DOJ’s Response to this Motion [Dkt. No. 84], and the prior
conduct of the DOJ in returning PacMar’s other property seized at the time of
Defendant Kao’s arrest all belie these claims.  See, e.g., Exhibit 9 to Motion
(suggesting that PacMar file a motion for return of property in order to recover the
data in question).  Just as the DOJ returned PacMar’s servers to it following the arrest
of Defendant Kao, see Supplemental Declaration of James Toshizo Ota (“Ota Supp.
Decl.”) ¶ 5, which server included all of its employees’ data and correspondences
stored on it, so now is PacMar simply seeking the DOJ’s return of its Company
Cellphone.4  PacMar’s servers and company cellphones are both company property
and, as it did with PacMar’s server, the DOJ is prepared to return the Company
Cellphone data to PacMar.5

defendant generally has no privacy interest in that which he voluntarily reveals to a
government agent.”).
4 PacMar would be entitled to the return of the physical cellphone and all of its
contents if not for the DOJ’s stated position that the cellphone is being kept for use
as evidence in further potential criminal matters.
5 PacMar’s policies treat all company-issued equipment, including computers,
servers, accounts, and cellphones in the same way.  See Exhibit 3 to Motion at 7
(“Martin Defense Group sensitive information stored on electronic and computing
devices whether owned or leased by Martin Defense Group, a User, or a third party,
remains the sole property of Martin Defense Group.”).
Case 1:21-cr-00061-LEK   Document 90   Filed 02/10/23   Page 4 of 8     PageID.520
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II.
Defendant Kao Has No Colorable Claim to Fifth Amendment Privilege
or Other Constitutional Protections.
Defendant Kao states in his MIO that he is unable to testify as to any claims
of privacy he may have over the data on the Company Cellphone (which, as
explained above, he does not have) due to self-incrimination protections under the
Fifth Amendment and similar state-level protections.  It must be noted, however,
that the DOJ already has in its possession the Company Cellphone and all data stored
therein.  As such, there is no possible threat of self-incrimination for any data stored
on his Company Cellphone.  Any incriminating evidence is already subject to use
by the DOJ in the multiple criminal charges Defendant Kao is facing.  Moreover,
because Defendant Kao had no reasonable expectation of privacy on a company-
issued device, see Discussion, supra § I, no testimony is required on his part as to
“his history relating to cellphone use at the company; his recollection regarding the
documents produced by Pacmar; his history relating to cell phone and the phone
number; the reasons for any text message; his personal and business contacts; and
other matters that may implicate the privilege against self-incrimination.”  MIO at
8.
Defendant Kao also attempts to force inapplicable standards into the Court’s
analysis, stating “Cellphone data is typically obtained only through a search
warrant.”  MIO at 12.  PacMar is not a governmental entity, and therefore does not
require a warrant to recover data and information on its own property, much less the
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Case 1:21-cr-00061-LEK   Document 95-2   Filed 03/23/23   Page 6 of 14     PageID.790

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ability to obtain one.  Defendant Kao’s cited caselaw makes this point clear: “Our
answer to the question of what police must do before searching a cell phone seized
incident to an arrest is accordingly simple—get a warrant.”  MIO at 12 (emphasis
added) (quoting Riley v. California, 573 U.S. 373, 403 (2014)).
Nor is PacMar’s request for the return of its own property akin to a FOIA
request as Defendant Kao argues in his MIO at 9–10.  Contrary to Defendant Kao’s
baseless statements, PacMar is indeed “seeking records on itself,” insofar as the data
stored on the Company Cellphone is PacMar’s own property and was, at all times,
subject to PacMar’s monitoring, inspection, and requests for return.  See Exhibit 3
to Motion at 8 (“For security and network maintenance purposes, Designated IT
Personnel will monitor equipment, systems, and network traffic at any time, per
Martin Defense Group’s Monitoring and Systems/Communications Protection
Policy.”).
Defendant Kao further argues that PacMar’s suggestion that the data be turned
over via a Cellebrite report somehow converts the data from PacMar’s property into
the “product of a criminal investigation.”  MIO at 11.  Again, despite Defendant
Kao’s mischaracterization of PacMar’s request for return of property (as is proper
under Rule 41(g), see Motion at 6–7 (citing United States v. Comprehensive Drug
Testing, Inc., 621 F.3d 1162, 1172 (9th Cir. 2010), overruled on other grounds in
Demaree v. Pederson, 887 F.3d 870 (9th Cir. 2018) (per curiam)), the data itself is
Case 1:21-cr-00061-LEK   Document 90   Filed 02/10/23   Page 6 of 8     PageID.522
Case 1:21-cr-00061-LEK   Document 95-2   Filed 03/23/23   Page 7 of 14     PageID.791

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PacMar’s property, and not the product of the DOJ’s investigation into Defendant
Kao’s criminal conduct.  The reference to a Cellebrite report was made only on the
understanding that the data is portable in that form for return to PacMar by the DOJ.
III.
Defendant Kao Raises No Meaningful Objections to the Return of the
Company Cellphone to PacMar.
Beyond effectively ignoring the fact that PacMar bought, paid for, and owns
the Company Cellphone and has a right to a return of the data stored therein, and his
attempts to inject inapplicable caselaw into his arguments, Defendant Kao raises
only vague assertions that the evidence presented by PacMar is somehow deficient.
Defendant Kao does not raise any specific objections and does not directly dispute
that the Company Cellphone is owned by PacMar.  Instead, Defendant Kao
selectively quotes irrelevant portions of the PacMar (then Navatek) Employee
Handbook in a transparent effort to distract the Court from the applicable clauses.
The relevant language from the Employee Handbook is quoted in PacMar’s Motion
and is entirely ignored in Defendant Kao’s Opposition.  See Motion at 3 (quoting
Exhibit 1 to Motion at §§ C-22 and -23).
Defendant Kao cannot credibly argue that he was not aware of the policies,
conditions, and restrictions on the use of the Company Cellphone, and certainly not
as to the applicable company policies from 2018 and on, see Discussion, supra § I,
when he was the President and CEO of PacMar (then MDG).  See Exhibits 3 and 4
to Motion.  Defendant Kao was not just a typical employee who may or may not
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8
have been aware of company policies.  Indeed, he was the principal executive officer
of the Company, in charge of supervising and overseeing the development,
implementation of, and compliance with said policies.  See Ota Supp. Decl. ¶ 7.
Defendant Kao’s attempts to misdirect the Court’s analysis ring hollow and should
be rejected.
IV.
Conclusion
For the foregoing reasons, as well as any further adduced at the hearing on
this matter, the Motion should be granted and an order issued directing the return of
PacMar’s data from Defendant Kao’s Company Cellphone.
DATED: Honolulu, Hawaii, February 10, 2023.
/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 90   Filed 02/10/23   Page 8 of 8     PageID.524
Case 1:21-cr-00061-LEK   Document 95-2   Filed 03/23/23   Page 9 of 14     PageID.793

Case 1:21-cr-00061-LEK   Document 90-1   Filed 02/10/23   Page 1 of 3     PageID.525
Case 1:21-cr-00061-LEK   Document 95-2   Filed 03/23/23   Page 10 of 14     PageID.794

Case 1:21-cr-00061-LEK   Document 90-1   Filed 02/10/23   Page 2 of 3     PageID.526
Case 1:21-cr-00061-LEK   Document 95-2   Filed 03/23/23   Page 11 of 14     PageID.795

Case 1:21-cr-00061-LEK   Document 90-1   Filed 02/10/23   Page 3 of 3     PageID.527
Case 1:21-cr-00061-LEK   Document 95-2   Filed 03/23/23   Page 12 of 14     PageID.796

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

CERTIFICATE OF SERVICE

CERTIFICATE OF SERVICE

The undersigned hereby certifies that, on the date noted below, a copy of the
foregoing document was duly served on the following parties via CM/ECF:
JENNIFER BILINKAS

Jennifer.Bilinkas@usdoj.gov
CRAIG S. NOLAN

craig.nolan@usdoj.gov
U.S. Department of Justice
District of Hawaii
300 Ala Moana Blvd., #6-100
Honolulu, Hawaii 96850

Attorney for Plaintiff
UNITED STATES OF AMERICA
VICTOR J. BAKKE

vbakke@bakkelawfirm.com
Law Office of Victor Bakke
Topa Financial Center
700 Bishop Street, Suite 2100
Honolulu, Hawaii 96813

Attorney for Defendant
MARTIN KAO
Case 1:21-cr-00061-LEK   Document 90-2   Filed 02/10/23   Page 1 of 2     PageID.528
Case 1:21-cr-00061-LEK   Document 95-2   Filed 03/23/23   Page 13 of 14     PageID.797

DATED: Honolulu, Hawaii, February 10, 2023.
/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 90-2   Filed 02/10/23   Page 2 of 2     PageID.529
Case 1:21-cr-00061-LEK   Document 95-2   Filed 03/23/23   Page 14 of 14     PageID.798

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