HONOLULU (KHON2) — Prosecutors accused a Honolulu businessman of stealing nearly $13 million of federal aid money.
Prosecutors said that Martin Kao used false information to get loans from the Paycheck Protection Program.
Forty-seven-year-old Martin Kao was arrested Wednesday, Sept. 30, and charged with two counts of bank fraud and one count of money laundering. Federal prosecutors described him as greedy for taking money that should have gone to other business owners who are struggling.
“We’re talking about an individual who is extremely greedy to exploit the global pandemic. Mr. Kao stole money from honest hard-working Americans who are trying to make ends meet and struggling American businesses trying to stay afloat,” said Wayne Chan of the IRS Criminal Investigation Unit.
Kao was the CEO Of Navatek, which is now known as Martin Defense Group. Investigators said that he applied in April for a loan through the Paycheck Protection Program. He said that he had 490 employees when he only had 140.
“Inflated the number of employees who worked at Navatek, used the very same employees to apply for more than one loan, he included employees in his loan applications that were plainly not eligible for consideration,” said Hawaii U.S. Attorney Kenji Price.
Prosecutors said that Kao received $10 million from that loan and a few weeks later, applied for another PPP loan from a different bank. Price pointed out that business owners are only allowed to apply once for PPP, but Price said that Kao was able to get another $2.8 million.
“It is alleged in the complaint that Martin Kao applied for millions of dollars of Paycheck Protection Program funds twice for the same set of employees,” said Price.
He said that many others tried to take advantage of federal aid. Nationally, the Department of Justice charged more than 60 people involving PPP loans.
“These cases involve actual losses of over $100 million and intended fraud losses of over $220 million,” said Price.
Navatek sent a statement that said, “Navatek is a highly reputable company with a long record of service to its clients and the people of Hawai’i. The government’s actions today were a complete surprise. As a company, we will address the allegations and have retained legal counsel to review these claims.”
Anyone with information about allegations of attempted fraud involving COVID-19 is encouraged to report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form which can be found here.
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