Three former executives of a Hawaii-based defense contractor entered pleas of not guilty in federal court in Washington D.C. this morning to allegations that they made illegal campaign contributions to a U.S. Senator and a political action committee.
Martin Kao, 48, Clifford Chen, 48, and Lawrence “Kahele” Lum Kee, 52, of Martin Defense Group LLC, formerly known as Navatek LLC, are charged with conspiracy to defraud the United States and to make conduit and government contractor contributions, and making government contractor contributions to support U.S. Sen. Susan Collins (R-Maine) who ran for reelection in 2020 and won.
Kao is also charged with two counts of making false statements to the Federal Election Commission. He once worked as the company’s CEO, Chen as chief financial officer and Lum Kee was the accountant.
Chen and Lum Kee turned themselves into the FBI’s Honolulu Division on Tuesday and entered their not guilty pleas before U.S. District Judge Carl J. Nichols in U.S. District Court for the District of Columbia via video conference this morning. The U.S. Attorney’s office for the District of Columbia and the FBI’s Honolulu Division did not immediately respond to a request for comment.
The three men are free on their own recognizance and a status conference is scheduled for May 5.
Kao, Chen and Lum Kee were indicted Feb. 10.
Martin Defense Group was prohibited from making contributions to a political action committee in support of a candidate for the U.S. Senate using government contractor funds because of their business status as a defense contractor.
The trio are accused of creating a shell company to conceal the source of an illegal contribution of $150,000 to an independent expenditure-only political action committee — a super PAC, which supported Collins.
The alleged shell company, the Society of Young Women Scientists and Engineers LLC (SYWSE), was incorporated Nov. 26, 2019, with Kao’s spouse as registered agent and manager.
Lum Kee allegedly wrote a check for $150,000 from Martin Defense Group to SYWSE, which contributed that amount to the super PAC.
The super PAC on Dec. 31, 2019, reported the contribution to the FEC. On Feb. 3, 2020, the day allegations that SYWSE was used to make illegal campaign contributions were publicly reported, Kao had SYWSE’s P.O. box closed, the indictment said.
The three men allegedly used their family members to make illegal donations to Collins’ campaign after they had reached the federal donation limit and then reimbursed themselves for those donations using cash from the company.
Martin Defense Group was based in Hawaii and operated branch offices in Maine; Washington, D.C.; Rhode Island; Michigan; Oklahoma; Kansas; and South Carolina. It designed and analyzed ship hull forms, ocean structures, underwater lifting bodies and coupled hydrodynamic systems, according to the company description.
It serviced contracts for the U.S. Department of Defense.
If convicted, they could face up to five years in prison and a $250,000 fine on each count.
The Feb. 10 indictment does not link a separate set of federal charges from 2020 accusing Kao of bank fraud and money laundering of more than $12.8 million in CARES Act funds. But the timing of the fraudulent acts, alleged to have occurred in the spring of 2020, coincide with the election.
The primary was on July 14, 2020, and the general election was Nov. 3, 2020, according to federal court documents.
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