Hawaii defense contractor exec must face some campaign finance conspiracy claims

The former executive is accused of participating in a scheme involving illegal campaign contributions.

by Jeremy Yurow, Court House News, March 3, 2025

HONOLULU (CN) — A federal judge in Hawaii Monday partially granted a defense contractor executive's motion for summary judgment, dismissing direct racketeering claims against him but allowing conspiracy and state law claims to proceed.

Duke Hartman was formerly an executive at PacMar Technologies LLC, previously known as Martin Defense Group. PacMar claims he participated in a scheme to funnel illegal campaign contributions to a political action committee.

The lawsuit in the U.S. District Court for Hawaii claims that PacMar's former CEO Martin Kao, along with his wife Tiffany and fellow executives, orchestrated an illegal donation scheme and subsequent cover-up.

According to court documents, between August 2019 and August 2020, the defendants made at least 39 illegal political contributions totaling approximately $173,968 using company funds. PacMar a substantial portion of these funds — $150,000 — was funneled through a shell entity called the Society of Young Women Scientists and Engineers LLC (SYWSE).

The contributions were reportedly directed to 1820 PAC, which supported U.S. Senator Susan Collins, from Maine. PacMar said Kao targeted Collins because she had authority over government contracts he sought, hoping the donations would influence decisions in his favor.

Senior U.S. District Judge Leslie Kobayashi, a Barack Obama appointee, ruled there was not enough evidence to hold Hartman directly responsible for racketeering but determined there was sufficient circumstantial evidence to support conspiracy and state law claims against him.

"Emails that Hartman sent and received provide circumstantial evidence of Hartman's knowledge of the conspiracy," the judge wrote, pointing to communications that suggest he was aware of the scheme’s illicit nature.

One key piece of evidence was an email from Kao to Hartman stating, "Let's do EVERYTHING we can now to fix this," in reference to campaign finance issues that had attracted regulatory attention.

According to the plaintiff, after a Federal Election Commission complaint was filed in February 2020 against SYWSE and Lam, the defendants created a scholarship program to deflect investigators' attention.

Hartman played a significant role in this cover-up by directing and operating SYWSE’s efforts, contacting universities to offer scholarships, and overseeing payments of at least $60,000 for these scholarships, PacMar says.

"Are we ready to come out and admit the connection there?" Hartman asked in an email in reference to the link between SYWSE and Kao, which the plaintiff says suggests he may have been aware of the improper connections.

Despite Hartman’s claims that he had no knowledge of the illegal activities and was merely following directions, the court found enough circumstantial evidence to allow conspiracy and state law claims to proceed to trial.

The court also ruled on motions filed by codefendants Chen, Lum Kee, Lam, Kao, and SYWSE, granting and denying them to the same extent as Hartman's.

The broader lawsuit includes claims beyond the illegal campaign contributions. According to PacMar’s second amended complaint, filed in April 2023, Kao and his coconspirators also engaged in fraudulent activities involving federal Paycheck Protection Program (PPP) funds and money laundering.

PacMar says that the defendants rewarded themselves with significant pay raises immediately after securing fraudulent PPP loans, with Chen’s salary increasing by $100,000, Lum Kee’s by $81,249.60, and Hartman’s by $20,000.

PacMar points to emails between defendants as proof that they knew the loans were fraudulent. In one instance, Kao emailed Chen and Lum Kee about PPP loan applications, stating he had "some tricks up [his] Wuhan Sleeves."

PacMar’s lawsuit includes multiple claims, ranging from fraud and civil conspiracy to breach of fiduciary duties, conversion, embezzlement, and unjust enrichment. The company is seeking compensatory, incidental, and punitive damages, as well as restitution.