Quaterly Report to the United States Congress July through September 2022

Summary

The Office of the Special Inspector General for Pandemic Recovery's Quarterly Report to the United States Congress for July through September 2022, its tenth, opening with a message from Special Inspector General Brian Miller. The message reports five audit attestation reviews of airlines that received CARES Act direct loans and asks Congress for a five-year extension beyond SIGPR's sunset date of 2025. The report summarizes a DoD Office of Inspector General report of September 20, 2022 on certifying businesses as critical to maintaining national security for section 4003 loans, and audits of Treasury's $700 million direct loan to YRC Worldwide, Inc. and of Mesa Airlines, Inc.'s $195 million direct loan. Its investigative table for the quarter lists 147 hotline complaints received and $118,330 in funds seized or forfeited.

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OFFICE OF THE SPECIAL INSPECTOR GENERAL
FOR PANDEMIC RECOVERY

Quarterly Report to the United States Congress
July through September 2022

i
SPECIAL INSPECTOR GENERAL | PANDEMIC RECOVERY

MESSAGE FROM THE SPECIAL INSPECTOR GENERAL
FOR PANDEMIC RECOVERY

I am pleased to present our tenth Quarterly Report to Congress. During this reporting period we
conducted five audit attestation reviews 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 because the taxpayer relies on air transport and expects
their hard-earned dollars to be used as the CARES Act intended.
In addition, we are currently conducting a significant number of investigations, more than 90% of which
stem directly from our own proactive efforts.  In particular, this quarter the Special Inspector General for
Pandemic Recovery (SIGPR) Office of Investigations’ casework led to the guilty plea of a business owner
who was 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.
I want to thank the auditors, special agents, attorneys and administrative staff of SIGPR, all of whom are
professional public servants who share one goal—to protect the American people from fraud, waste and
abuse.
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 date 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

REPORT TO CONGRESS | JULY – SEPTEMBER 2022
ii
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 55 Full-Time Equivalent (FTE) employees. 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 more effectively plan and execute our efforts related to recruitment, acquisitions, and
information technology.

CONTENTS
SIGPR OVERSIGHT
Audits
1
Investigations
5
FINDINGS AND DEVELOPMENTS
Direct Loans and Other Investments
9

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SPECIAL INSPECTOR GENERAL | PANDEMIC RECOVERY
SECTION 1
SIGPR OVERSIGHT

SIGPR employs proactive efforts to 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 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.
Partnership with the Department of Defense Office of Inspector General
As part of SIGPR’s ongoing review of Treasury’s administration of the Direct Loan Program created under
the CARES Act, SIGPR 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.”2 Treasury subsequently created the National Security Loan Program
(NSLP) and provided eligibility guidance.3 Businesses could be considered for NSLP loans if they met

1 See CARES Act § 4018(c)(1)
2 Pub. L 116-136 § 4003(b)(3)
3 Q&A: Loans to Air Carriers and Eligible Businesses and National Security Businesses (April 10, 2020). Available at
https://home.treasury.gov/system/files/136/CARES-Airline-Loan-Support-Q-and-A-national-security.pdf

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REPORT TO CONGRESS | JULY – SEPTEMBER 2022
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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 handled all certifications for the NSLP and signed memoranda to recommend and
certify 20 businesses for the loan program based on analyses performed by the Office of the Under
Secretary of Defense for Acquisition and Sustainment. Six of the 11 NSLP loans Treasury awarded went
to businesses that received the certification from DoD.
DoD Office of Inspector General issued its report on September 20, 2022.4 The report contained one
finding with two accompanying recommendations. The finding stated that DoD officials did not
adequately support their verifications that businesses held DX-priority contracts or top secret facility
clearances. Additionally, DoD officials did not adequately support their recommendations to the
Secretary and Deputy Secretary of Defense to certify businesses as critical to maintaining national
security for loans under Section 4003 of the CARES Act.5
DoD Office of Inspector General recommended that the Deputy Assistant Secretary of Defense
(Industrial Policy):

1. Perform an after-action review to document decisions, actions, best practices, and lessons
learned when operating in a pandemic environment or other national emergency, in which
the DoD is tasked to provide critical information and analysis to support decisions in a short
timeframe; and
2. Develop and implement a standard operating procedure to retain documentation to support
business decisions, when certifying data points to other federal agencies.

DoD management responded to both recommendations with corrective actions, which were accepted
by DoD Office of Inspector General. The corrective actions were completed by DoD on or before August
12, 2022.
Independent Reviews of Direct Loan Validation Memoranda
The Office of Audits issued five independent reviews of Validation Memoranda completed by Treasury.6
The Office of Audits has issued a total of 12 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. The independent reviews determine
whether the memoranda were properly completed according to Treasury’s Underwriting Guide. This
effort helps the Office of Audits determine whether Treasury acquired all required documents from each
applicant prior to approving funding from the Direct Loan Program.
The Office of Audits identified minor discrepancies in the Validation Memoranda for Meridian Rapid
Defense Group, Mesa Airlines, and SpinLaunch and no issues with the Validation Memorandum for Map
Large or Republic Airways. The Office of Audits 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

4 Audit of the DoD Certification Process for Coronavirus Aid, Relief, and Economic Security Act Section 4003 Loans Provided to
Business Designated as Critical to Maintaining National Security (DODIG-2022-131, September 20, 2022)
5 DX‑priority contracts provide support to certain national defense and energy programs.
6 The independent reviews issued this quarter were for Validation Memoranda that Treasury completed for Map Large,
Meridian Rapid Defense Group, Mesa Airlines, Republic Airways, and SpinLaunch.

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SPECIAL INSPECTOR GENERAL | PANDEMIC RECOVERY
with the overall audit of the Direct Loan Program.
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 to gather and administer YRC
Worldwide, Inc.’s application package prior to underwriting and approving 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 the
loan application, April 29, 2020, to the date that the final loan disbursement was made.
Audit of Treasury’s Monitoring of the Direct Loan Program
The Audit of Treasury’s Monitoring of the Direct Loan Program has two objectives. First, the Office of
Audits will determine whether Treasury had a sufficient policy in place to guide its monitoring of the
direct loans. Second, the Office of Audits 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. To conduct its testing, the
Office of Audits has met with Treasury program officials, reviewed Treasury’s monitoring portal
(Salesforce), and obtained monthly reports from Treasury’s administrative agent.
Audit of Direct Loan Program Borrower – Mesa Airlines, Inc.
Mesa Airlines, Inc. received a $195 million direct loan from Treasury pursuant to section 4003(b)(1) of
the CARES Act. The loan agreement includes covenants by the Mesa Airlines, Inc. to comply with certain
restrictions on employee compensation, stock repurchases, dividends, and other areas as required by
the CARES Act.
The Office of Audits held entrance conferences with Treasury officials to discuss audit objectives and
establish points of contact at Treasury and at Mesa Airlines, Inc. The audit team has reviewed Mesa
Airlines, Inc.’s responses to Salesforce review card questions that are designed to monitor compliance
with the loan agreement. We will use this data in addition to other borrower financial records to test
compliance with the loan agreement. This is the first in a series of planned audits to ensure compliance
with the terms of the loan agreements between Treasury and the loan recipients.
Audit Planning
The Office of Audits issued its Fiscal Year 2023 audit plan on October 17, 2022. To develop the audit
plan, the Office of Audits met with the Department of the Treasury’s Chief Recovery Officer, the Federal
Reserve Board of Governors Office of Inspector General, the Government Accountability Office’s
Assistant Director for CARES Act Oversight, and staff members from the House Select Subcommittee on
the Coronavirus Crisis.
Data Analysis
The Office of Audits data analytics program plays 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 150 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.

SIGPR OVERSIGHT

REPORT TO CONGRESS | JULY – SEPTEMBER 2022
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The data analytics program:
•
maintains complex risk assessment metrics by creating analytics that identify audit red flags;
•
harmonizes, cleanses, normalizes, and joins relevant data tables;
•
maintains a growing library of data tables that provide information and 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 Office of Inspector General, 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 third-party vendors to
stay informed about emerging analytic technologies, techniques, tools, and methodologies.
The PRAC established the Pandemic Analytics Center of Excellence (PACE) to support its mission and its
Office of Inspector General members. Their data analytics effort has dedicated a great deal of resources
to harvesting and mining data for the benefit of many federal agencies and Offices of Inspectors
General. SIGPR has leveraged this valuable resource.  During this reporting period, the Office of Audits
has dedicated a great amount of time to ingesting the monthly PACE datasets into its own data analytics
platform. The PACE data provides a wealth of information to help detect fraud, waste, and abuse related
to CARES Act funding. SIGPR is using this data in conjunction with its existing proprietary datasets to
help enhance its overall oversight effort.
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 three active investigations.

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SPECIAL INSPECTOR GENERAL | PANDEMIC RECOVERY
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 – July 1, 2022, through September 30, 2022
Hotline Complaints

Hotline Complaints Received
147
Referrals to Other Agencies
68
Preliminary Inquiries

Opened
4
Closed
0
Converted to Full Investigation
3
Ongoing
5
Investigations*

Opened
3
Closed
1
Ongoing
29
Criminal Actions †

Referrals to the Department of Justice
0
Referrals to State/Local Prosecuting Authorities
0
Indictments/Informations
0
Arrests/Summons
0
Convictions/Pleas
1
Sentencings
0
Civil Actions

Referrals to the Department of Justice
0
Civil Judgments/Settlements
0

SIGPR OVERSIGHT

REPORT TO CONGRESS | JULY – SEPTEMBER 2022
6
Other Enforcement Actions

IG Subpoenas Issued
2
Investigative Monetary Results

Funds Seized/Forfeitures
$118,330
Restitution
0
Fines and Penalties
0
Civil Judgments/Settlements
0
Cost Recoveries
0
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.

Throughout the fourth 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 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 PLEADS GUILTY TO $2.6 MILLION COVID RELIEF FRAUD SCHEME
In August 2022, a Naples, Florida man pleaded guilty in U.S. District Court, Middle District of Florida, to
wire fraud, bank fraud, illegal monetary transaction, and possession of ammunition by a convicted felon.
SIGPR special agents along with counterparts from the Federal Bureau of Investigation, Internal Revenue
Service – Criminal Investigation, with assistance from the Federal Reserve Board – Office of Inspector
General, 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 the criminal
history, average monthly payroll, number of employees, and gross revenues. Further, he fraudulently
used the means of identification of individuals who purported to work for his companies to submit false
and fraudulent payroll and payroll tax documents. The man allegedly 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.

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SPECIAL INSPECTOR GENERAL | PANDEMIC RECOVERY
As part of his guilty plea, the man agreed to forfeit his interest in a 2019 Tiara 34LS boat, two real
properties located in Naples, a 4.02 carat solitaire engagement ring, and approximately $65,645 seized
from two bank accounts, toward approximately $2,617,447, which were traceable to proceeds of the
offense.
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 147 hotline complaints, of which all but one pertained to
matters outside SIGPR’s jurisdiction, as indicated in the table and chart below.
Complaints by Category
Received July through September 2022

Category
Total
Title I – Paycheck Protection Program
7
Title V – Coronavirus Relief Fund
17
Multiple CARES Act Programs
6
Other

Economic Impact Payments
8
Emergency Income Disaster Loans
3
Income Tax Related
1
Non-Program Related
50
Rental and Housing Assistance Programs
50
Social Security Benefits
3
Unemployment Insurance Programs
2
Grand Total
147

REPORT TO CONGRESS | JULY – SEPTEMBER 2022
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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).”7
Accordingly, below are the categories of loans and other investments made by Treasury under CARES
Act section 4003,8 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 air carriers
and related businesses ($25 billion), cargo air carriers ($4 billion), and businesses critical to maintaining
national security ($17 billion).9 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

7 CARES Act § 4018(f)(1)(B)
8 Treasury did not establish a program for “loan guarantees” under CARES Act section 4003.
9 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

FINDINGS AND DEVELOPMENTS

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SPECIAL INSPECTOR GENERAL | PANDEMIC RECOVERY
funds ($429 billion) in these programs.10 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, 2020.11
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.
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 report excerpts on the following pages summarize the section 4003(b)(1) – (3) loans current through
this quarter.12

10 See Consolidated Appropriations Act, 2021, Pub. L. 116-260, div. N §§ 1003, 1005
11 Id. § 1005.9 U.S. Department of the 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 Eco- nomic
Security Act (Mar. 30, 2020), https://home.treasury.gov/system/files/136/Procedures and Minimum Requirements for
Loans.pdf.
12 See U.S. Department of the Treasury, Report Under Section 4026(b)(1)(C) of the CARES Act on Loans to Air Carriers, Eligible
Businesses, and National Security Businesses (October 1, 2022). https://home.treasury.gov/system/files/136/
4026b1CLoanReport10012022.pdf; see also U.S. Department of the 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-security-businesses (last updated Jan. 21, 2021).

FINDINGS AND DEVELOPMENTS

REPORT TO CONGRESS | JULY – SEPTEMBER 2022
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FINDINGS AND DEVELOPMENTS

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SPECIAL INSPECTOR GENERAL | PANDEMIC RECOVERY

FINDINGS AND DEVELOPMENTS

REPORT TO CONGRESS | JULY – SEPTEMBER 2022
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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 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.”13
The Federal Reserve established several liquidity programs (facilities) pursuant to section 13(3) of the
Federal Reserve Act.14 That provision, used extensively during the 2008 financial crisis and amended by
the Dodd-Frank Wall Street Reform and Consumer Protection Act,15 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

13 CARES Act § 4003(b)(4)(A)–(C)
14 See 12 U.S.C. § 343(3)
15 Pub. L. 111-203, 124 Stat. 1375

FINDINGS AND DEVELOPMENTS

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SPECIAL INSPECTOR GENERAL | PANDEMIC RECOVERY
institutions.”16 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.17 The Federal Reserve may not establish any emergency
lending program under section 13(3) without prior approval of the Secretary of the Treasury.18
Of note, as of September 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
$45 million in actual loan losses, net of subsequent recoveries.19 In addition, an evaluation of loan
participations purchased by the MS Facilities, LLC resulted in a reported loan loss allowance in the
amount of $1.8 billion.20 The allowance for loan losses is estimated based upon MS Facilities, LLC’s
holdings as of June 30, 2022.21
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 September
30, 2022.22
Recipient
Treasury Investment Remaining as of
September 30, 2022
MS Facilities, LLC
$14,000,527,330.76
TALF II, LLC
$1,165,893,792.98
Corporate Credit Facilities, LLC
$0.00
Municipal Liquidity Facility, LLC
$2,923,147,644.64
The SPVs have returned the following amounts to Treasury as of September 30, 2022.
Recipient
Investment Returned to Treasury as of
September 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. Additional details for the
facilities are available on the Federal Reserve’s website.23 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.

16  12 U.S.C. § 343(3)(A); see also 12 C.F.R. § 201.4(d)
17 12 U.S.C. § 343(3)(B)(i)
18 12 U.S.C. § 343(3)(B)(iv)
19 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-
20221012.pdf (last updated October 11, 2022)
20 See id.
21 See id.
22 See id.
23 See id.

HELP FIGHT
FRAUD,
WASTE, AND
ABUSE.

BY EMAIL: hotline@sigpr.gov
BY PHONE: 202-927-7899

www.sigpr.gov

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