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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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