defrauding

Defense contractor who gave to Susan Collins accused of defrauding her business loan program

A Hawaii defense contractor who has donated to U.S. Sen. Susan Collins and whose business operates in Maine faces federal charges alleging he defrauded the Paycheck Protection Program, the small business loan program championed by the senator.

Martin Kao, the CEO of Martin Defense Group, formerly known as Navatek LLC, allegedly inflated the number of his employees his business had and how much they made to get a $10 million loan, then deposited $2 million into his personal bank account, according to a criminal complaint filed in U.S. District Court in Hawaii on Tuesday.

He then allegedly applied for a second loan. Kao, 47, is set to make an initial appearance in federal court in Honolulu on Thursday, according to U.S. Attorney Kenji M. Price’s office. He is facing two charges of bank fraud and five charges of money laundering.

The defense contracting company, headquartered in Honolulu, Hawaii, said it grew to employ 40 engineers and scientists in Portland and Bangor offices this summer. It has offices in six other states and primarily designs ship hulls for the U.S. Navy. Kao appeared with Collins at a company event in Portland last year after his company won an $8 million Navy contract.

Kao allegedly flaunted ties to U.S. senators in conversations with officials at a Hawaii-based bank in loan conversations, noting in an April 2 email his company operates in multiple states and saying he “work[s] very closely” with senators from those states who “championed” the March coronavirus relief bill that included the loan program, according to the criminal complaint. 

It does not name the lawmakers with whom he allegedly talked. Collins spokesperson Annie Clark said Thursday morning the Republican senator had not spoken with Kao since August 2019 and no one in her office had contact with him or his

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Hawaii defense contractor charged with defrauding government out of $12.8m in coronavirus relief aid

A high-profile Hawaii-based defense contractor has been arrested on charges of swindling $12.8 million in funds intended to prop up small businesses during COVID-19.

Martin Kao, 47, a generous political donor, was arrested on Wednesday and charged with bank fraud and money laundering, accused of siphoning off $2 million of the fraudulent loan into his own personal bank account.

The Department of Justice accused Kao of falsifying loan applications so that he could receive more money than he was entitled to under the Paycheck Protection Program (PPP), which was created by Congress as part of the $2 trillion CARES Act meant to stave off financial ruin for individuals and small businesses during the pandemic.   

Kao submitted at least two fraudulent PPP loan applications, prosecutors allege.

They claim he falsely inflated the number of employees on the loan application, and falsely certified that the applicant and its affiliates would not receive, and had not received, another PPP loan.  

He was charged with two counts of bank fraud and five counts of money laundering. 

Kao will make his initial appearance in court in Honolulu on Thursday, before U.S. District Court Judge Kenneth J. Mansfield. 

Martin Kao, CEO of Navatek - now Martin Defense Group - was arrested on Wednesday

Martin Kao, CEO of Navatek – now Martin Defense Group – was arrested on Wednesday

Kao (right) is the CEO of Navatek, which specializes in contracts for the Department of Defense and Nasa, among others

Kao (right) is the CEO of Navatek, which specializes in contracts for the Department of Defense and Nasa, among others

Kao in 2017 was appointed CEO of Navatek, a defense company with contracts for the Defense Department and Nasa.

Five days before his arrest Kao announced that the company was being renamed Martin Defense Group, after him.

‘While I respect and value Navatek’s history, our re-branding as Martin Defense Group allows us to turn toward the future, and the opportunities we see to make a positive difference,’ said Kao in the September 25

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