The CEO of a Hawaii defense contractor invoked his connections to powerful lawmakers in Washington, D.C. in order to pressure banks into approving what federal prosecutors now say were millions of dollars in fraudulently obtained coronavirus bailout loans.
Prosecutors say Martin Kao, the chief executive of the Honolulu-based Navatek, which was rebranded last week as the Martin Defense Group, illegally obtained more than $12 million in financing through the Paycheck Protection Program. The criminal complaint against Kao alleges that he lied to banks about the number of people employed by his company and applied for multiple PPP loans through various subsidiaries in order to illegally maximize the amount of money he extracted from the program. Kao was arrested on Wednesday on bank fraud and money laundering charges, as first reported by Civil Beat.
“The charges announced today send a very clear message to COVID-19 fraudsters,” U.S. Attorney for Hawaii Kenji Price said in a statement on the charges. “If you game the system to get money that businesses so desperately need in Hawaii, we will find you, we will expose you and we will hold you accountable to the fullest extent of the law.”