Former defense contractor Martin Kao indicated on Wednesday he plans to fight a new federal charge accusing him of lying on the mortgage application for his Kahala home.

Kao is the former CEO of Navatek, now called PacMar, a Honolulu-based company that designs ships for the Navy. He pleaded not guilty to one count of bank fraud. 

In 2020, Kao sought a $3 million loan to buy 4902 Kahala Ave. for $4.5 million, according to the indictment. It added that Kao digitally altered several documents from his brokerage by adding zeros to his reported wealth when asked to provide financial statements.

Federal Building and US Courthouse.
Kao pleaded not guilty in federal court on Wednesday. Cory Lum/Civil Beat/2022

For instance, $83,880.59 became $8,388,00.59, according to the indictment. 

Federal prosecutors say he also inflated the amount of money he had paid on a different loan, falsely stating that he had paid $4.1 million when it was really $4,100. 

In the end, the bank approved the loan, and Kao closed on the Kahala property around June 2020. 

Kao is scheduled to stand trial on March 20. Kao and his attorney declined to comment after the arraignment on Wednesday. 

Martin Kao was a prominent Honolulu businessman and campaign donor. Courtesy: Hawaii News Now

The latest case follows his guilty plea last year to Covid relief fraud charges. Kao obtained more than $12.8 million in Paycheck Protection Program loans by submitting numbers that falsely inflated his payroll. His sentencing in that case is scheduled for March 29. 

Meanwhile, Kao has also pleaded guilty to charges in Washington, D.C. for making illegal campaign contributions to Maine Sen. Susan Collins. He has a public defender in that case, which is scheduled for sentencing on May 10. 

On Wednesday, Kao told U.S. District Court Judge Kenneth Mansfield that he could not afford a lawyer for the mortgage fraud case. The judge appointed him taxpayer-funded counsel while Kao’s claim is being verified. 

Kao remains on supervised release. 

Before his legal troubles began, Kao was a major political donor to Hawaii’s congressional delegation and federal politicians on the mainland. 

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