Martin Kao, 51, a resident of Honolulu and Chief Executive Officer of a Hawaii-based defense contracting company, was sentenced to 87 months in federal prison for his role in a fraudulent scheme to obtain COVID-19 relief funds.
Senior United States District Judge Leslie E. Kobayashi also imposed five years of supervised release and ordered Kao to pay restitution of $12,841,490 to the Small Business Administration (SBA). Kao was found guilty of wire fraud, money laundering, and bank fraud after submitting multiple fraudulent Paycheck Protection Program (PPP) loan applications in the spring of 2020.
According to Kao’s admissions during his guilty plea hearings and other court records, as Chief Executive Officer and 99% owner of a Hawaii-based defense contractor, Kao submitted fraudulent PPP loan applications to at least three banks, including two headquartered in Hawaii, during spring 2020. In his first PPP loan application Kao falsely tripled the number of employees at his company and thereby obtained the maximum loan of $10,000,000 from a Hawaii bank. During the bank’s review of Kao’s application, Kao pressured the bank to expedite approval of the fraudulent application by repeatedly claiming that he had discussed his application with United States Senators and their staffs who would intervene on Kao’s behalf if the bank did not quickly approve his loan…