Racketeering claims survive against former defense contractor's wife

Tiffany Lam, the wife of former PacMar Technologies CEO Martin Kao, can't use a still-pending state court appeal or her husband's criminal convictions to get the defense contractor's racketeering claims against her dismissed.

by Jeremy Yurow, Court House News, September 1, 2026

HONOLULU (CN) — A Hawaii defense contractor’s racketeering lawsuit survives another round, after a federal judge ruled Monday that a defendant can’t use an unresolved state court fight to shut the case down early.

U.S. District Judge Leslie Kobayashi denied summary judgment to Tiffany Jennifer Lam, the wife of former company CEO Martin Kao accused of helping funnel company funds through a sham scholarship program. Kobayashi found Lam couldn’t use either a state arbitration award or Kao’s federal criminal convictions to block the lawsuit against her.

PacMar Technologies, formerly known as Martin Defense Group, sued Lam, Kao and several others. The company accuses them of running a scheme with a twofold purpose: fraudulently obtaining PPP loans and making illegal campaign contributions, then using PacMar’s money to cover up both.

Lam has long been tied to the Society of Young Women Scientists and Engineers, the Hawaii LLC that PacMar claims was used to disguise the movement of money. The company was registered in Hawaii in November 2019, and its articles of organization listed “Jennifer Lam” as its organizer.

Part of the cover-up, PacMar says, involved funneling funds through Lam and the Society, disguised as scholarship donations.

Kao has already pleaded guilty to multiple federal fraud and money laundering charges in one criminal case, as well as conspiracy, illegal campaign contributions and false-statement charges in a separate case in Washington, D.C. His appeals of the federal convictions remain pending before the Ninth Circuit.

Lam argued that an earlier civil proceeding had already resolved key issues underlying PacMar’s claims against her. A Hawaii state court had confirmed a related arbitration award in a separate case involving another Kao-linked company.

That ruling, along with Kao’s guilty pleas, had already resolved the key facts underlying PacMar’s lawsuit against her, she claimed.

Kobayashi, a Barack Obama appointee, wasn’t persuaded. Hawaii’s Intermediate Court of Appeals had already vacated the state court’s final judgment and parts of its orders confirming the arbitration award, and Kao has since asked the Hawaii Supreme Court to undo the remaining portions.

With that fight still playing out in state court, Kobayashi found there simply isn’t a final ruling for anyone to rely on yet.

“Appealability is what permitted Kao to take his appeal; it is not a substitute for finality,” Kobayashi wrote.

Lam’s own filings undercut her position further.

“[Lam] is aware of no Hawaii decision holding a partially vacated confirmation order final for res judicata while a discretionary appeal of the affirmed portions remains pending,” Lam conceded in a supplemental brief to the court.

Kao’s criminal convictions fared no better as a shortcut for Lam. She acknowledged that legal doctrine only lets a defendant use someone else’s conviction to block a lawsuit when the party being blocked, here, PacMar, actually took part in that earlier criminal case.

PacMar was never a party to Kao’s prosecution. Kobayashi ruled his guilty pleas therefore don’t have preclusive effect against the company, regardless of what they established against Kao personally.

Lam also asked Kobayashi to pause the entire case until the Hawaii Supreme Court sorts out the arbitration dispute. Kobayashi declined that too, noting Lam couldn’t say how long such a pause might last or point to any real hardship beyond the ordinary burden of defending a lawsuit.

The denial was without prejudice, meaning Lam can ask again if the state court proceedings change in a meaningful way.

“A stay would also do little to simplify the issues, proof, or questions of law before the court,” Kobayashi wrote.

The ruling allows PacMar’s remaining claims against Lam to proceed, including RICO, RICO conspiracy, aiding and abetting, unjust enrichment, gross negligence, and portions of its civil conspiracy and conversion claims.

Representatives for PacMar and Lam did not immediately respond to a request for comment.