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OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR
PANDEMIC RECOVERY

Quarterly Report to the United States Congress
April through June 2022

MESSAGE FROM THE SPECIAL INSPECTOR GENERAL
FOR PANDEMIC

RECOVERY

I am pleased to present our ninth Quarterly Report to Congress. During this reporting
period we conducted four audit attestations of airlines that received direct loans under the
Coronavirus Aid, Relief, and Economic Security (CARES) Act. These attestations showed
that the airlines properly completed certifications to the Department of the Treasury
(Treasury) for their loans to move on to the underwriting phase. This work is important as
the taxpayer relies on air transport in their daily lives and expects their hard-earned dollars
to be utilized in the way the CARES Act intended.
We also issued an alert memorandum notifying Treasury that its Calendar Year 2021 direct
loan monitoring was delayed. We recommended Treasury create and finalize a monitoring
policy and a plan of action to ensure that monitoring is done in a timely manner. Treasury
agreed with our recommendations.
In addition, this quarter the Special Inspector General for Pandemic Recovery (SIGPR)
Office of Investigations contributed to an indictment of a business owner who is alleged to
have used funds from the Main Street Lending Program (MSLP), Economic Injury Disaster
Loan (EIDL) program, and Paycheck Protection Program (PPP) for unauthorized purposes
and for his own personal enrichment. We are currently conducting a significant number of
investigations, 74% of which stem directly from our own proactive efforts.
I want to sincerely thank the auditors, special agents, attorney advisors and the
administrative staff of SIGPR, all of whom are professional public servants with one goal-to
protect the American people from fraud, waste and abuse of the billions of dollars they
invested in the CARES Act.
As I have noted in previous correspondence and other communications with Congress, in
order for this work to continue, we are asking for a five-year extension beyond our sunset
year of 2025. We need this time to see our investigations through to completion. Most loans
within our jurisdiction mature in 2025, and should defaults then occur, without an extension
we will have sunsetted just when we are most needed. We at SIGPR will continue our
mission and look forward to working with you in the future.
Very respectfully,

Brian Miller
Special Inspector General for Pandemic Recovery

SPECIAL INSPECTOR GENERAL | PANDEMIC RECOVERY

PROFILE
ABOUT
SIGPR is an independent organization within Treasury whose mission is to promote the
economy, efficiency, effectiveness, and integrity of CARES Act funds and programs. SIGPR
was established by section 4018 of the CARES Act with duties, responsibilities, and
authority under the Inspector General Act of 1978.

STAFFING AND BUDGET
SIGPR continues to engage in staffing and recruitment efforts with an emphasis on mission
critical occupations, i.e., special agents and auditors, in support of SIGPR’s
Congressionally mandated mission.
To date, SIGPR has 52 Full-Time Equivalent (FTE) employees on board and several
recruitment actions in the hiring pipeline. We continue to be judicious in the execution of
our budget and look forward to being included in the annual appropriation process which
will allow SIGPR to effectively plan and execute mission support operations related to
recruitment, acquisitions, and information technology.

CONTENTS
SIGPR OVERSIGHT
Audits

Investigations

FINDINGS AND DEVELOPMENTS
Direct Loans and Other Investments

REPORT TO CONGRESS | APRIL— JUNE 2022

SECTION 1

SIGPR OVERSIGHT

SIGPR employs proactive efforts to prevent, detect, and investigate fraud, waste, and
abuse involving CARES Act funds and programs within SIGPR’s jurisdiction.

Below is a summary of SIGPR’s activities during the reporting period:

Audits
The Office of Audits conducts audits and evaluations of loans, loan guarantees, and other
investments made by Treasury under programs within SIGPR’s jurisdiction.1
Engagements
During this quarter, the Office of Audits worked on several engagements related to the
Direct Loan Program. This program was established under section 4003 of the CARES Act
and authorized Treasury to provide loans, loan guarantees, and other investments to
passenger air carriers and related businesses, cargo air carriers, and businesses critical to
maintaining national security. Treasury made direct loans to 35 such businesses, providing
them with liquidity to withstand losses incurred as a result of the coronavirus pandemic.
Audit of Treasury’s Monitoring of the Direct Loan Program
On May 24, 2022, SIGPR issued an alert memorandum notifying Treasury that its Calendar
Year 2021 direct loan monitoring of borrowers’ compliance with CARES Act and loan
requirements was delayed. Quarterly, borrowers answer questions from Treasury about
their use of loan proceeds, executive compensation, equity, dividends, and other areas of
1

See CARES Act § 4018(c)(1).

SPECIAL INSPECTOR GENERAL | PANDEMIC RECOVERY

SIGPR OVERSIGHT

compliance. SIGPR found no evidence of Treasury monitoring borrowers’ responses
between July 2021 and March 7, 2022, when SIGPR first questioned the lack of monitoring
in an email to Treasury officials. SIGPR recommended Treasury create and finalize a
monitoring policy and a plan of action to ensure that monitoring is done in a timely
manner. Treasury agreed with the recommendations.
The Audit of Treasury’s Monitoring of the Direct Loan Program has two objectives. First,
SIGPR will determine whether Treasury had a sufficient policy in place to guide its
monitoring of the direct loans. Second, SIGPR will determine whether Treasury monitored
borrowers’ compliance with the requirements of the CARES Act and the terms and
conditions of the borrowers’ loan agreements, as well as whether Treasury followed up to
resolve any issues that it detected. For this objective, the Office of Audits will test a
sample of 17 of the 35 borrowers.
Independent Reviews of Direct Loan Validation Memoranda
The Office of Audits issued four independent reviews of Validation Memoranda completed
by Treasury.2 SIGPR has issued a total of seven independent reviews to-date.
A Validation Memorandum is a document that Treasury created to confirm that a direct
loan applicant had submitted all required documentation. Once a Validation Memorandum
was completed, the relevant applicant could proceed to the loan underwriting process.
SIGPR’s independent reviews determine whether the memoranda were properly
completed according to Treasury’s Underwriting Guide. This effort helps SIGPR determine
whether Treasury acquired all required documents from each applicant prior to approving
funding from the Direct Loan Program.
SIGPR identified minor discrepancies in the Validation Memoranda for Hawaiian Airlines,
SkyWest Airlines, and United Airlines and no issues with the Validation Memorandum for
JetBlue Airways. SIGPR did not identify any material modifications that should be made to
any of the Validation Memoranda. The results of these attestation reviews will be included
with the overall audit of the Direct Loan Program.
Audit of Direct Loan Program Recipients’ Use of Lobbying

In February 2022, the Office of Audits began the Audit of Direct Loan Recipients’ Use of
Lobbying. The audit is focused on Treasury’s National Security Loan Program (NSLP). The
purpose of this audit is to determine how Treasury concluded that NSLP recipients were
critical to maintaining national security and to identify what role, if any, lobbying played in
making that determination.

The independent reviews issued this quarter were for Validation Memoranda that Treasury completed for
JetBlue Airways, Hawaiian Airlines, SkyWest Airlines, and United Airlines.
2

REPORT TO CONGRESS | APRIL— JUNE 2022

SIGPR OVERSIGHT

Audit of Treasury’s Process for Approving Its Direct Loan to YRC Worldwide, Inc.
In April 2022, the Office of Audits initiated an audit of Treasury’s process used to gather
and administer YRC Worldwide, Inc.’s application package prior to underwriting and
approval of its $700 million direct loan. The audit will determine if Treasury’s approval
process followed the guidance set forth in the CARES Act, other regulations, and Treasury
guidance. The audit will cover Treasury’s process from the date of loan application, April
29, 2020, to the date that the final loan disbursement was made.
Partnership with the Department of Defense Office of Inspector General
SIGPR has partnered with the Department of
Defense (DoD) Office of Inspector General to
determine whether DoD officials adequately
supported decisions when verifying and certifying
businesses as critical to maintaining national
security for loans under section 4003 of the
CARES Act. The CARES Act made $17 billion
available to make loans and loan guarantees for
“businesses critical to maintaining national
security.”3 Treasury subsequently created the National Security Loan Program (NSLP) and
provided eligibility guidance. Businesses could be considered for NSLP loans if they met
certain criteria including, but not limited to, receiving a recommendation and certification
from the Secretary of Defense or the Director of National Intelligence. The Secretary of
Defense and the Deputy Secretary of Defense signed memoranda to recommend and
certify businesses for the loan program based on analyses performed by the Office of the
Under Secretary of Defense for Acquisition and Sustainment.
Audit Planning
During this quarter, the Office of Audits began its process for developing its Fiscal Year
2023 audit plan. The Office of Audits reached out to external stakeholders for input on
the plan and met with individuals from the Department of the Treasury, the Federal
Reserve Board OIG, the Government Accountability Office, and the House Select
Subcommittee on the Coronavirus Crisis. The Office of Audits plans to meet with officials
from the White House and Congressional oversight personnel as well. The Office of Audits
aims to develop its audit plan to ensure that our work reflects the intent of SIGPR’s
oversight responsibilities established in the CARES Act. The Office of Audits will continue
to work with Treasury, our counterparts at the Federal Reserve Board OIG, and all relevant
stakeholders to coordinate and deconflict our oversight plans. The Office of Audits
intends to have an audit plan finalized for Fiscal Year 2023 by September 30, 2022.

Pub. L 116-136 § 4003(b)(3)

SPECIAL INSPECTOR GENERAL | PANDEMIC RECOVERY

SIGPR OVERSIGHT

Data Analysis
The Office of Audits data analytics program continues
to play an important role in SIGPR’s mission. SIGPR’s
data analytics platform uses various software and tools
that process and analyze large quantities of data to
detect potential red flags and anomalies. These tools
are valuable not only for SIGPR’s audit work, but also
for other proactive initiatives throughout SIGPR. The
program has developed a data library containing over
100 million rows of CARES Act funding information, drawn from both public and sensitive
government sources. The program updates the library at least quarterly to maintain
accurate and relevant information.
The data analytics program:
•

maintains complex risk assessment metrics by identifying, cleansing,
normalizing, and joining relevant data tables;

•

maintains a growing library of data tables to support the detection of
irregularities;

•

creates interactive dashboards and visualizations to assist users in better
understanding and prioritizing program areas for audits, investigations, and
evaluations;

•

shares analytic methodologies and processes with various external government
agencies, including the Department of Homeland Security, Department of
Defense, U.S. Agency for International Development Office of Inspector General,
Pandemic Response Accountability Committee (PRAC), Department of Health
and Human Services, Amtrak, National Aeronautics and Space Administration,
Department of Education, Small Business Administration Office of Inspector
General, General Services Administration Office of Inspector General, and
others; and

•

collaborates with various inter-governmental agencies, committees, and thirdparty vendors to stay informed about emerging analytic technologies,
techniques, tools, and methodologies.

During this reporting period, the Office of Audits has spent a great amount of time
becoming familiar with various datasets that are provided monthly by the PRAC to various
federal agencies. The data provides a wealth of focused information in detecting and
preventing fraud, waste, and abuse related to CARES Act funding and programs. SIGPR
plans on using this data expansively in conjunction with its existing proprietary datasets
to help enhance its overall oversight effort.

REPORT TO CONGRESS | APRIL— JUNE 2022

SIGPR OVERSIGHT

Investigative Support
The Office of Audits provides forensic auditing services, including financial records
analysis, and auditing and accounting expertise in support of investigations conducted by
the Office of Investigations. During this reporting period, the Office of Audits assisted
with five active investigative requests.

Investigations
The Office of Investigations conducts criminal and civil investigations regarding
allegations of fraud, waste, abuse, or misconduct involving CARES Act funds and
programs within SIGPR’s jurisdiction. In addition, the office manages SIGPR’s hotline,
which serves as a primary avenue for reporting fraud, waste, abuse, or misconduct.
Investigative Activities
The Office of Investigations routinely collaborates with the rest of the SIGPR team,
including auditors, analysts, and attorneys, to vet complaints, develop proactive initiatives,
and pursue investigations.
In addition, SIGPR’s investigations are conducted in partnership with various U.S.
Attorneys’ Offices, the U.S. Department of Justice (DOJ), the PRAC Fraud Taskforce, and
other federal law enforcement partners.

During this reporting period, the office continued its investigative and proactive efforts to
uncover and vigorously pursue fraud and wrongdoing related to CARES Act funding under
Title IV, Subtitle A. The following table highlights SIGPR’s investigative activities for the
period.
SIGPR Investigative Activity – April 1, 2022 through June 30, 2022
Hotline Complaints
Hotline Complaints Received
Referrals to Other Agencies

249
93

Preliminary Inquiries

Opened

Closed

Converted to Full Investigation

Ongoing

Investigations*
Opened

Closed

Ongoing

SPECIAL INSPECTOR GENERAL | PANDEMIC RECOVERY

SIGPR OVERSIGHT

Criminal Actions †
Referrals to the Department of Justice

Referrals to State/Local Prosecuting Authorities

Indictments/Informations**

Arrests/Summons

Convictions/Pleas

Sentencings

Civil Actions
Referrals to the Department of Justice

Civil Judgments/Settlements

Other Enforcement Actions
IG Subpoenas Issued

Investigative Monetary Results
Funds Seized/Forfeitures

$92,900

Restitution

Fines and Penalties

Civil Judgments/Settlements

Cost Recoveries

Cost Savings

Note: Investigative data maintained via SIGPR’s electronic case management system.
* Includes all SIGPR program-related cases, including PRAC Fraud Task Force investigations and
joint investigations with other agencies.
† Actions reported include those resulting from PRAC Fraud Task Force investigations and joint
investigations with other agencies.
** The total number includes all charging documents resulting from any prior referrals to
prosecutorial authorities.

Throughout the third quarter of the fiscal year, the Office of Investigations continued to
expand its investigative oversight work through SIGPR’s collaborative and proactive
efforts.
PRAC Fraud Task Force

In January 2021, the PRAC established a Fraud Task Force to serve as a resource for the
Inspector General (IG) community by surging investigative resources into the areas of
greatest need. Currently, the area of greatest need is pandemic loan fraud. Special agents
from Offices of Inspectors General across the government are detailed to work on task
force cases. These agents have partnered with prosecutors at DOJ’s Fraud Section and at
United States Attorneys’ Offices across the country.
The PRAC extended its authority to investigate pandemic-related fraud to SIGPR through a
Memorandum of Understanding. Currently, SIGPR has four special agents assigned to the
PRAC Fraud Task Force on a part-time basis. These special agents are mostly assigned

REPORT TO CONGRESS | APRIL— JUNE 2022

SIGPR OVERSIGHT

PPP cases while continuing to work their SIGPR investigative caseload. This initiative
allows SIGPR to make a broader contribution to the IG community by assisting with a range
of critical investigations that might otherwise remain unstaffed.
NAPLES FELON INDICTED FOR COVID RELIEF FRAUD
In April 2022, a Naples, Florida man was indicted on
charges of wire fraud, bank fraud, aggravated identity
theft, illegal monetary transactions, and possession of
ammunition by a convicted felon, in the Middle District
of Florida. The indictment included the intended
forfeiture of his interest in a 2019 Tiara 34LS boat, two
real properties located in Naples, a 4.02 carat solitaire
engagement ring, over $65,000 seized from two bank
accounts, and more than $2.6 million, which are alleged to be traceable to proceeds of the
offense.
SIGPR Special Agents along with counterparts from the Federal Bureau of Investigation,
the Federal Reserve Board OIG, and Internal Revenue Service – Criminal Investigation,
determined that the man, a convicted felon, submitted false and fraudulent MSLP, EIDL
and PPP loan applications, resulting in the deposit of more than $2.6 million into bank
accounts that he controlled. His loan applications contained numerous false
representations, including those relating to criminal history, average monthly payroll,
number of employees, and gross revenues. Further, he submitted false and fraudulent
payroll and payroll tax documents. The man is alleged to have used the funds for
unauthorized purposes and for his own personal enrichment, including the purchase of
residences in Naples, stocks and investment securities, and ammunition.
SIGPR Hotline Activity
The SIGPR hotline accepts reports of potential fraud, waste, abuse, and mismanagement
related to CARES Act funding, programs, and personnel. The hotline also accepts
whistleblower complaints from federal employees, former federal employees, employment
applicants, employees of contractors, subcontractors, grantees and subgrantees, and
personal service contractors, all of whom wish to report fraud, waste, abuse,
mismanagement, or reprisal actions under the jurisdiction of SIGPR.
During this reporting period, SIGPR received 249 hotline complaints, of which all but one
pertained to matters outside SIGPR’s jurisdiction, as indicated in the table and chart below.

SPECIAL INSPECTOR GENERAL | PANDEMIC RECOVERY

SIGPR OVERSIGHT

Complaints by Category
Received April through June 2022

Category

Total

Title I – Paycheck Protection Program

Title IV, Subtitle A – (13(3) Facilities (MSLP)

Title V – Coronavirus Relief Fund

Multiple Cares Act Programs

Other
Economic Impact Payments

Emergency Income Disaster Loans

Income Tax Related

Non-Program Related

164

Rental and Housing Assistance Programs

Social Security Benefits

Unemployment Insurance Programs

Grand Total

REPORT TO CONGRESS | APRIL— JUNE 2022

249

SECTION 2

FINDINGS AND
DEVELOPMENTS

The CARES Act requires SIGPR to regularly report “a detailed statement of all loans, loan
guarantees, other transactions, obligations, expenditures, and revenues associated with
any program established by the Secretary under section 4003, as well as the information
collected under subsection (c)(1).”4
Accordingly, below are the categories of loans and other investments made by Treasury
under CARES Act section 4003,5 including, where applicable and known, a list of the loans
and investments made under each category and the eligible businesses to which loans
were made.

Direct Loans and Other Investments
Introduction

CARES Act section 4003(a) authorized the Secretary “to make
loans, loan guarantees, and other investments in support of
eligible businesses, States, and municipalities that do not, in the
aggregate, exceed $500,000,000,000.” The CARES Act further
divided these loans and investments into four categories. The first
three, described in sections 4003(b)(1)–(3), cover loans and loan guarantees to passenger

CARES Act § 4018(f)(1)(B).

Treasury did not establish a program for “loan guarantees” under CARES Act section 4003.

SPECIAL INSPECTOR GENERAL | PANDEMIC RECOVERY

FINDINGS AND DEVELOPMENTS

air carriers and related businesses ($25 billion), cargo air carriers ($4 billion), and
businesses critical to maintaining national security ($17 billion).6 The fourth category,
described in section 4003(b)(4), authorized the Secretary to invest in various liquidity
programs established by the Federal Reserve under section 13(3) of the Federal Reserve
Act ($454 billion).
The Consolidated Appropriations Act, 2021, amended the CARES Act to rescind
unobligated balances of funds ($429 billion) in these programs.7 It also specified that
after December 31, 2020, the Federal Reserve “shall not make any loan, purchase any
obligation, asset, security, or other interest, or make any extension of credit” through the
liquidity programs or facilities in which Treasury had invested CARES Act funds, except
for facilities in the MSLP, that were authorized to purchase loans until January 8, 2021, for
applications submitted by December 14, 2020.8
The following table contains an overview of the relevant categories and amounts of
Treasury’s obligations remaining under CARES Act section 4003(b)(1)–(4) through June
30, 2022:
Funding Program
Direct Loans to Passenger Air Carriers
and Related Businesses

Direct Loans to Cargo Air Carriers
Direct Loans to Businesses Critical to
Maintaining National Security

Outstanding Amount as of June 30, 2022
$252,970,914

$2,429,183
$748,552,551

Funding Program

Treasury Investment Remaining as of
June 30 2022

Main Street Lending Program (MS Facilities, LLC)

$13,940,426,237

Term Asset-Backed Securities Loan
Facility (TALF II, LLC)

$1,200,000,000 (plus interest)

Primary and Secondary Market Corporate Credit Facility (Corporate Credit
Facilities, LLC)

Municipal Liquidity Facility (Municipal
Liquidity Facility, LLC)

$2,900,000,000 (plus interest)

Treasury has posted on its website the contracts it has entered in connection with the administration of loans
under section 4003(b)(1), (2), and (3). See U.S. Dep’t Treasury, Other Programs, https://home.treasury.gov/data/
other-programs
6

See Consolidated Appropriations Act, 2021, Pub. L. 116-260, div. N §§ 1003, 1005.

Id. § 1005.

REPORT TO CONGRESS | APRIL— JUNE 2022

FINDINGS AND DEVELOPMENTS

Direct Loans
On March 30, 2020, Treasury first announced guidelines for businesses interested in
applying for loans under CARES Act section 4003(b)(1)–(3).9 Those guidelines
incorporated several mandatory loan terms and conditions, with many designed to protect
American taxpayers. A summary of these terms and conditions can be accessed in
SIGPR’s previous quarterly reports.
Air Carrier Loan Program
CARES Act section 4003(b)(1)–(2) allocated $25 billion for
loans and loan guarantees to passenger air carriers,
aviation-maintenance facilities certified under 14 C.F.R.
Part 145, and air-transportation ticket agents, as well as
$4 billion for cargo air carriers. The following table
summarizes the section 4003(b)(1)–(2) loans current
through this quarter.10

U.S. Dep’t Treasury, Procedures and Minimum Requirements for Loans to Air Carriers and Eligible Businesses
and National Security Businesses under Division A, Title IV, Subtitle A of the Coronavirus Aid, Relief, and Economic Security Act (Mar. 30, 2020), https://home.treasury.gov/system/files/136/Procedures and Minimum
Requirements for Loans.pdf.
9

See U.S. Dep’t Treasury, Report Under Section 4026(b)(1)(C) of the CARES Act on Loans to Air Carriers,
Eligible Businesses, and National Security Businesses (July 1, 2022), https://home.treasury.gov/system/
files/136/4026b1CLoanReport07012022.pdf; see also U.S. Dep’t Treasury, Loans to Air Carriers, Eligible Businesses, and National Security Businesses, https://home.treasury.gov/policy-issues/cares/preserving-jobs-foramerican-industry/loans-to-air-carriers-eligible-businesses-and-national-security-businesses (last updated
Jan. 21, 2021).
10

SPECIAL INSPECTOR GENERAL | PANDEMIC RECOVERY

FINDINGS AND DEVELOPMENTS

Total
Outstanding
Loan
Amount12

Cash
Interest
Receipts

$450,000

$520,025

$1,928,000,000

$135,000,000

$2,538,900

11/5/2025

$4,721,260

$4,809,700

$509,261

9/26/2020
(amended
10/21/2020
and
1/15/2021)

6/30/2025

$7,500,000,000

$550,000,000

$10,257,500

11/5/2020

11/5/2025

$1,162,124

$1,181,571

$107,253

11/5/2020

11/5/2025

$4,026,705

$4,375,276

Bristin Travel,
LLC

10/26/2020

10/24/2025

$549,651

$604,274

$9,320

Caribbean
Sun Airlines,
Inc.

11/5/2020
(amended

11/5/2025

$6,768,749

$7,507,782

Elite Airways,
LLC

11/9/2020
(amended

11/7/2025

$2,630,274

$15,000,000

$16,761,753

Frontier
Airlines, Inc.

9/28/2020
(amended

9/26/2025

$574,000,000

$150,000,000

$5,548,667

Hawaiian
Airlines, Inc.

9/25/2020
(amended
10/23/2020
and

6/28/2024

$622,000,000

$45,000,000

$450,450

Island Wings,
Inc.

11/5/2020

11/5/2025

$294,350

$327,585

9/29/2020
(amended
11/3/2020 and

11/29/2025

$1,948,000,000

$115,000,000

$3,330,113

Loan Date

Maturity
Date

Total Loan
Amount

Aero
Hydraulics,
Inc.

10/26/2020

10/24/2025

$450,000

Alaska
Airlines, Inc.

9/28/2020
(amended
10/30/2020
and
1/15/2021)

9/26/2025

Allflight
Corporation

11/5/2020

American
Airlines, Inc.

Recipient

American Jet
International
Corp
Aviation
Management
& Repairs, Inc.

JetBlue
Airways
Corporation

Disbursements

“‘Disbursements’ includes all loan disbursements.” See U.S. Dep’t Treasury, Report Under Section 4026(b)(1)
(C) of the CARES Act on Loans to Air Carriers, Eligible Businesses, and National Security Businesses https://
home.treasury.gov/system/files/136/4026b1CLoanReport07012022.pdf (last updated July 1, 2022).
11

“‘Total Outstanding Loan Amount’ includes all loan disbursements and increases of loan principal amount
arising from payment-in-kind (PIK) interest, less any repayments of principal.” Id.
12

REPORT TO CONGRESS | APRIL— JUNE 2022

FINDINGS AND DEVELOPMENTS

Total
Outstanding
Loan
Amount12

Cash
Interest
Receipts

$1,817,306

$2,101,598

$195,000,000

$204,947,017

10/15/2025

$20,000,000

$181,881

11/6/2020

11/6/2025

$58,000,000

$1,622,308

SkyWest
Airlines, Inc.

9/29/2020
(amended
10/28/2020
and
1/15/2021)

9/29/2025

$725,000,000

$60,000,000

$1,196,767

Southern
Airways
Express, LLC

10/28/2020

10/28/2025

$1,838,501

$188,254

Sun Country,
Inc.

10/26/2020

10/24/2025

$45,000,000

$77,125

Thomas
Global
Systems, LLC

11/9/2020

11/7/2025

$1,400,000

$22,745

Timco Engine
Center, Inc.

11/5/2020

11/5/2025

$8,390,240

$9,342,793

United
Airlines, Inc.

9/28/2020
(amended
11/6/2020,
12/8/2020,
and
1/15/2021)

9/26/2025

$7,491,000,000

$520,000,000

$9,517,733

Loan Date

Maturity
Date

Total Loan
Amount

Legacy
Airways, LLC

10/20/2020

10/25/2025

$1,817,306

Mesa Airlines,
Inc.

10/30/2020

10/30/2025

Ovation
Travel Group,
Inc.

10/15/2020

Republic
Airways, Inc.

Recipient

Disbursements

Businesses Critical to Maintaining National Security
CARES Act section 4003(b)(3) allocated $17 billion for loans and loan guarantees to
“businesses critical to maintaining national security.” The following table summarizes the
section 4003(b)(3) loans current through this quarter.13

See U.S. Dep’t Treasury, Report Under Section 4026(b)(1)(C) of the CARES Act on Loans to Air Carriers, Eligible
Businesses, and National Security Businesses), https://home.treasury.gov/system/
files/136/4026b1CLoanReport07012022.pdf (last updated July 1, 2022); see also U.S. Dep’t Treasury, Loans to
Air Carriers, Eligible Businesses, and National Security Businesses, https://home.treasury.gov/policy-issues/
cares/preserving-jobs-for-american-industry/loans-to-air-carriers-eligible-businesses-and-national-securitybusinesses (last updated Jan. 21, 2021).
13

SPECIAL INSPECTOR GENERAL | PANDEMIC RECOVERY

FINDINGS AND DEVELOPMENTS

Total
Outstanding
Loan
Amount15

Cash
Interest
Receipts

$2,500,000

$2,632,822

$142,372

$6,000,000

$213,998

10/31/2025

$10,000,000

$11,529,006

10/30/2020

10/30/2025

$7,100,000

$8,101,311

$79,019

Ovio Technologies,
Inc.

11/2/2020

10/31/2025

$1,186,900

$1,368,378

Semahtronix, LLC

11/13/2020

11/13/2025

$1,999,100

$777

Semantic AI, Inc.

11/13/2020

11/13/2025

$506,300

$564,090

SpinLaunch, Inc.

11/13/2020

11/13/2025

$2,519,200

$224,997

Visual Semantics,
Inc.

10/30/2020

10/30/2025

$1,053,200

$1,201,733

$11,722

Wiser Imagery
Services, LLC

10/30/2020

10/30/2025

$3,069,700

$3,541,601

7/8/2020

9/30/2024

$700,000,000

$717,094,410

$25,177,821

Recipient Loan
Date

Loan Date

Maturity
Date

Total Loan
Amount

Channel Logistics,
LLC

11/12/2020

11/12/2025

$2,500,000

Core Avionics &
Industrial, Inc.

11/5/2020

11/5/2025

Map Large, Inc.

11/2/2020

Meridian Rapid
Defense Group,
LLC

Yellow
Corporation16

Disbursements

Other Investments

CARES Act section 4003(b)(4) allocated at least $454 billion for “loans and loan
guarantees to, and other investments in, programs or facilities established by the Board of
Governors of the Federal Reserve System for the purpose of providing liquidity to the

“Total Outstanding Loan Amount’ includes all loan disbursements and increases of loan principal amount
arising from payment-in-kind (PIK) interest, less any repayments of principal.” Id.
15

YRC Worldwide changed its name to Yellow Corporation. Id.

REPORT TO CONGRESS | APRIL— JUNE 2022

FINDINGS AND DEVELOPMENTS

financial system that supports lending to eligible businesses, States, or municipalities”
by “purchasing obligations or other interests” directly from the issuer or through
secondary markets, and “making loans, including loans or other advances secured by
collateral.”17
The Federal Reserve established several liquidity programs (facilities) pursuant to
section 13(3) of the Federal Reserve Act.18 That provision, used extensively during the
2008 financial crisis and amended by the Dodd-Frank Wall Street Reform and Consumer
Protection Act,19 allows the Federal Reserve to lend money in “unusual and exigent
circumstances” to participants in “any program or facility with broad-based eligibility”
who are “unable to secure adequate credit accommodations from other banking
institutions.”20 The Federal Reserve Board was required to consult with the Secretary of
the Treasury prior to the Federal Reserve Board’s 2015 issuance of its regulations
governing emergency lending under section 13(3) of the Federal Reserve Act.21 The
Federal Reserve may not establish any emergency lending program under section 13(3)
without prior approval of the Secretary of the Treasury.22
Of note, as of June 30, 2022, MS Facilities, LLC—a special-purpose vehicle (SPV) jointly
formed by Treasury and the Federal Reserve Bank of Boston to operate the MSLP—has
recognized approximately $32 million in actual loan losses net of subsequent
recoveries.23 In addition, an evaluation of loan participations purchased by the MS
Facilities, LLC resulted in a reported loan loss allowance in the amount of $1.9 billion.24
The allowance for loan losses is estimated based upon MS Facilities, LLC’s holdings as of
March 31, 2022.25
The following table summarizes the total amount of remaining CARES Act funds that
Treasury invested in MS Facilities, LLC and other SPVs created in conjunction with other
lending programs as of June 30, 2022.26

CARES Act § 4003(b)(4)(A)–(C).

See 12 U.S.C. § 343(3).

Pub. L. 111-203, 124 Stat. 1375.

12 U.S.C. § 343(3)(A); see also 12 C.F.R. § 201.4(d).

12 U.S.C. § 343(3)(B)(i).

12 U.S.C. § 343(3)(B)(iv).

See Bd. of Governors of the Fed. Reserve Sys., Periodic Report: Update on Outstanding Lending Facilities
Authorized by the Board under Section 13(3) of the Federal Reserve Act, https://www.federalreserve.gov/
publications/files/13-3-report-20220712.pdf (last updated July 11, 2022)
23

See id.

SPECIAL INSPECTOR GENERAL | PANDEMIC RECOVERY

FINDINGS AND DEVELOPMENTS

Recipient

Treasury Investment Remaining as
of June 30, 2022

MS Facilities, LLC

$13,940,426,237

TALF II, LLC

$1,200,000,000 (plus interest)

Corporate Credit Facilities, LLC

Municipal Liquidity Facility, LLC

$2,900,000,000 (plus interest)

The SPVs have returned the following amounts to Treasury as of June 30, 2022.

Recipient

Investment Returned to Treasury
as of June 30, 2022

MS Facilities, LLC

$23,609,068,438.20

TALF II, LLC

$8,845,890,590.39

Corporate Credit Facilities, LLC

$37,980,215,713.55

Municipal Liquidity Facility, LLC

$14,605,308,004.93

These facilities have stopped extending loans or purchasing obligations. Transactionspecific details for the facilities are available on the Federal Reserve’s website.27 The
Federal Reserve has indicated that because the MSLP ceased purchasing participations on
January 8, 2021, it will not provide additional transaction-specific disclosures about the
MSLP on a periodic basis going forward.

See Bd. of Governors of the Fed. Reserve Sys., Reports to Congress Pursuant to Section 13(3) of the Federal
Reserve Act in response to COVID-19, https://www.federalreserve.gov/publications/files/13-3-report20220712.pdf (last updated July 11, 2022).
27

REPORT TO CONGRESS | APRIL— JUNE 2022

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FRAUD,
WASTE, AND
ABUSE.
hotline@sigpr.gov
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Full text of Quarterly Report to Congress : Quarterly Report to the United States Congress, April through June 2022

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