Martin Kao, a former CEO from Honolulu, has been sentenced to 87 months in federal prison. The sentence was delivered by Senior United States District Judge Leslie E. Kobayashi for crimes involving COVID-relief wire fraud, money laundering, and bank fraud. Additionally, Kao is required to pay restitution of $12,841,490 to the Small Business Administration (SBA) and perform community service.

Kao's fraudulent activities began in spring 2020 when he submitted false Paycheck Protection Program (PPP) loan applications to multiple banks. He inflated employee numbers on his first application to secure a $10 million loan from a Hawaii-based bank. In subsequent applications, he concealed previous loans to obtain further funds.

The investigation revealed that Kao also engaged in mortgage fraud by altering financial documents to inflate his assets when applying for a $3 million loan to purchase an expensive residence.

Acting United States Attorney Kenneth M. Sorenson commented on the case: "Martin Kao, motivated by greed, chose to repeatedly lie about his assets and prior loans in order to obtain millions of dollars in funds that were intended to help businesses staggered by the Covid-19 pandemic."

Adam Jobes from IRS Criminal Investigation highlighted the impact of Kao's actions: "While so many small businesses closed their doors in 2020, Mr. Kao’s scheme tangled up enough emergency relief funds to cover the average annual income of 175 American households."

Weston King of the SBA Office of Inspector General emphasized their commitment: "This case underscores SBA-OIG’s dedication to protecting taxpayer dollars and holding accountable those who seek to exploit federal relief programs."

The PPP was part of the CARES Act aimed at providing financial assistance during the COVID-19 pandemic through forgivable loans for small businesses.

The Justice Department’s COVID-19 Fraud Enforcement Task Force continues efforts against pandemic-related frauds. Information on such cases can be reported via the National Center for Disaster Fraud Hotline or its web form.

The investigation into Martin Kao was conducted by IRS Criminal Investigation and SBA Office of Inspector General with prosecution led by Assistant U.S. Attorneys Craig Nolan and Sydney Spector along with Trial Attorneys Jennifer Bilinkas and Tom Tynan.