$10 Million PPP Loan Fraud Greed Earns Hawaii Man 87 Months in Prison

April 11, 2025

Bob Coleman
Founder & Publisher

$10 Million PPP Loan Fraud Greed Earns Hawaii Man 87 Months in Prison

The owner of a Hawaii defense contractor ran a successful small business employing 140 people with a monthly payroll of $830,000 when the pandemic hit. Navatek had an $8 million Navy contract to develop hulls and hybrid electric propulsion systems for high-speed boats. Another $5 million was for a partnership with the University of Maine to explore 3D printing technologies for naval vessel construction.

However, owner Martin Kao wanted more when he learned about the PPP loan program. He aimed for the maximum of $10 million. That decision ultimately resulted in Martin pleading guilty and being jailed for 87 months for PPP loan fraud.

In April 2020, his accountant told him the most money they could get was $3.5 million “without looking like we are cooking anything.”

However, just before sending in the fraudulent application, Kao emailed Kee, “Chance’m!”

Two weeks later, Central Pacific Bank funded Navatek $10 million in a first-draw PPP loan.

Buoyed by that success, the company’s CFO emailed Kao saying they could try submitting more applications to other banks, but that “we would need another bank with idiots running it and with weak verification capabilities.”

Nick Grube of The Main Monitor finishes the story.

Kao submitted two more applications, one to Boston-based Radius Bank and another to First Hawaiian Bank.

Radius Bank approved a loan worth more than $2 million while First Hawaiian Bank denied the request because Navatek had already received PPP money. 

Running fake numbers was just part of the scheme. A DOJ criminal complaint shows that Kao repeatedly applied pressure tactics to try to get his loans approved.

According to the complaint, Kao sent a series of emails to Central Pacific Bank employees saying that he was in close contact with several U.S. senators and at least one member of Congress who were interested in receiving updates on his loan application.

Two of the lawmakers, he said, “were very adamant about stepping in if our application was getting stalled.”

The DOJ never identified any of the lawmakers Kao claimed to be working with. In at least one exchange with a bank employee he said he was merely relaying information from one of the “highest authorities possible in Hawaii.”

“The bank has ZERO risk!” Kao said. “I’m not barking at you.”

On May 1, 2020, Chen sent Kao and Lum Kee an article from Bloomberg about the DOJ seeing early signs of PPP fraud, particularly when it came to companies inflating their payroll numbers.

Kao’s response, according to the lawsuit, was two letters long — “Fk.”