Indictment — United States v. Martin Kao, District of Hawaii (Document 1)

Summary

An indictment in United States of America v. Martin Kao, Case 1:23-cr-00003-LEK, in the U.S. District Court for the District of Hawaii, filed January 5, 2023 as Document 1. It charges bank fraud under 18 U.S.C. § 1344(2). The grand jury alleges that Kao applied to Bank 1 on or about March 12, 2020 for a $3 million mortgage loan to buy a Honolulu residence priced at $4.5 million. It alleges that Kao digitally altered brokerage records submitted to Bank 1, including a February 2020 statement showing $8,388,000.59 when the value was $83,880.59, and that Bank 1 approved the loan in or about June 2020. The forfeiture notice cites 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c) and names the residence.

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Case 1:23-cr-00003-LEK Document1 Filed 01/05/23 Page2of6 PagelD.2

Introductory Allegations

l. On or about March 12, 2020, MARTIN KAO, the defendant, applied
to Bank 1 for a $3 million mortgage loan for the purchase of the residence and
premises at 4902 Kahala Avenue, Honolulu, Hawaii, at a price of $4.5 million.

px In connection with KAO’s application, Bank | required KAO to
provide a full financial disclosure so that Bank | could assess his net worth, cash
flow, and the amount of his liquid assets. Among the records requested by Bank 1
were records of KAO’s assets, including his investment account no. XXXX-4054
at Brokerage 1.

3. On or about March 16, 2020, KAO digitally altered a February 2020
Statement from Brokerage | to falsely represent that his account’s value as of
February 29, 2020 was $8,388,000.59, when, in fact, the value was only
$83,880.59. KAO subsequently submitted the altered record to Bank 1 in support
of his $3 million loan application.

4, On or about April 22, 2020, KAO digitally altered a March 2020
Statement from Brokerage | to falsely represent that his account’s value as of
March 31, 2020 was $4,961,400.70, when, in fact, the value was only $49,614.70.
KAO subsequently submitted the altered record to Bank 1 in support of his $3 |

million loan application.
Case 1:23-cr-00003-LEK Document1 Filed 01/05/23 Page3of6 PagelD.3

Be On or about May 7, 2020, KAO digitally altered a Real-Time Values
record from Brokerage | to falsely represent that his account’s value as of May 7,
2020 was $5,691,048.59, when, in fact, the value was only $56,910.48. KAO
subsequently submitted the altered record to Bank 1 in support of his $3 million
loan application.

6. On or about May 22, 2020, KAO digitally altered an April 2020
Statement from Brokerage | to falsely represent that his account’s value as of April
30, 2020 was $5,618,900.02, when, in fact, the value was only $56,189.02. KAO
subsequently submitted the altered record to Bank 1 in support of his $3 million
loan application.

de On or about May 22, 2020, KAO digitally altered a Transaction
History record from Brokerage | to falsely represent that on May 22, 2020, he paid
down the margin loan on his account by $4.1 million, when, in fact, he had paid
down his margin loan by only $4,100. KAO subsequently submitted the altered
record to Bank 1 in support of his $3 million loan application.

8. On or about May 22, 2020, KAO digitally altered a Real-Time Values
record from Brokerage | to falsely represent that, as a result of his purported $4.1
million payment on the margin loan, his account’s value as of May 22, 2020 _
$10,533,900.70, when, in fact, the value was only $64,339.70. KAO subsequently

submitted the altered record to Bank 1 in support of his $3 million loan application.
Case 1:23-cr-00003-LEK Document1 Filed 01/05/23 Page4of6 PagelD.4

9. In or about June 2020, Bank 1 approved KAO’s $3 million loan
application, and KAO closed on the purchase of the $4.5 million residence and
premises at 4902 Kahala Avenue, Honolulu, Hawaii.

10. Atall times relevant to this Indictment, Bank | was a financial
institution within the definition of Title 18, United States Code, Section 20.

Bank Fraud
(18 U.S.C. § 1344(2))

11. The allegations of Paragraphs | through 10 are realleged as if fully set
forth herein.

12. From in or about March 2020 to in or about June 2020, within the
District of Hawaii and elsewhere, MARTIN KAO did knowingly execute, and
attempt to execute, a scheme and artifice to obtain any of the moneys, funds,
credits, assets, securities, or other property owned by, or indies the control or
custody of a financial institution by means of false or fraudulent pretenses,
representations, and promises, namely by submitting altered investment account
—" to Bank 1 that falsely inflated the true value of his investment account no.
XXXX-4054 at Brokerage 1.

All in violation of Title 18, United States Code, Section 1344(2).
Case 1:23-cr-00003-LEK Document1 Filed 01/05/23 Page5of6 PagelD.5

Forfeiture Notice

1. The allegations contained in all paragraphs of this Indictment are
hereby realleged and incorporated by reference for the purpose of noticing
forfeitures pursuant to Title 18, United States Code, Section 981(a)(1)(C), and
Title 28, United States Code, Section 2461(c).

2 The United States hereby gives notice to the defendant that, upon
conviction of the offense charged in this Indictment, the government will seek
forfeiture, in accordance with Title 18, United States Code, Section 981(a)(1)(C),
and Title 28, United States Code, Section 2461(c), of any and all property, real or
personal, that constitutes or is derived from proceeds traceable to the violation of
Title 18, United States Code, Section 1344(2), alleged in this Indictment, including
but not limited to the real property at 4902 Kahala Avenue, Honolulu, Hawaii.

3. If by any act or omission of the defendant, any of the property subject
to forfeiture described in the preceding paragraph herein:

a. cannot be located upon the exercise of due diligence;

b. has been transferred or sold to, or deposited with, a third party;

c. has been placed beyond the jurisdiction of the court;

d. has been substantially diminished in value; or

e. has been commingled with other property which cannot be divided

without difficulty,
Case 1:23-cr-00003-LEK Document1 Filed 01/05/23 Page6of6 PagelD.6

the United States of America will be entitled to the forfeiture of substitute property
up to the value of the property described above in the preceding paragraph,
pursuant to Title 21, United States Code, Section 853(p), as incorporated by Title
28, United States Code, Section 2461(c).

DATED: January 5, 2023, at Honolulu, Hawaii.
A TRUE BILL

/s/ Foreperson

FOREPERSON, GRAND JURY

United States Attorney
District A

CRAIG S. 1 LA
Assistant U.S. Attorney

United States v. Martin Kao
Indictment

Cr. No. e'R23-00003 LEK

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