Office of the Special Inspector General for Pandemic Recovery: Quarterly Report to the United States Congress, January to March 2022
- Document type
- report
- Date
- 2022-04-29
Summary
The quarterly report to the United States Congress from the Office of the Special Inspector General for Pandemic Recovery (SIGPR) for January to March 2022, with a message from Special Inspector General Brian Miller dated April 29, 2022. The message reports 27 open cases, 16 referrals to the Department of Justice and 548 referrals to other agencies, and an additional $8 million under the Consolidated Appropriations Act of 2022, and asks Congress to extend SIGPR's term to March 2030. The oversight section describes three independent reviews of Treasury Validation Memoranda for Frontier, American and Alaska Airlines and audits of the Direct Loan Program. It also reports 180 hotline complaints vetted. The report closes with tables of Treasury investments remaining in and returned from lending facilities as of March 31, 2022.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Cite this document
“Office of the Special Inspector General for Pandemic Recovery: Quarterly Report to the United States Congress, January to March 2022.”
Original at www.oversight.gov, dated 2022-04-29. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2025-09-30-sigpr-quarterly-report/
, SHA-256 e339d2c0b542ebbbfbd84111a8fdbd9b00c01b55c9e34cef947a371ee9f31ac2.Full text
OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR
PANDEMIC RECOVERY
Quarterly Report to the United States Congress
January to March 2022
MESSAGE FROM THE SPECIAL INSPECTOR GENERAL
FOR PANDEMIC RECOVERY
To date, the hard work of the Special Inspector General for Pandemic Recovery
(SIGPR) includes:
• The Office of Investigations is working 27 open cases, quadrupling our
casework in the last year, more than 80 percent of which we identified
through our own efforts;
• Through our partnerships with U.S. Attorneys’ Offices and other law
enforcement agencies, SIGPR has made 16 referrals to the Department of
Justice (DOJ) and 548 referrals to other agencies;
• SIGPR attorneys and special agents have helped secure a criminal
information and guilty plea in the U.S. District Court for the Western
District of Oklahoma, as well as indictments in the U.S. District Courts for
the District of Maryland and the Middle District of Florida.
• The Office of Audits has completed three independent reviews of the
Validation Memoranda prepared by the Department of the Treasury
(Treasury) for direct loan applications from American Airlines, Alaska
Airlines, and Frontier Airlines.
Of course, these results cannot fully demonstrate the value of SIGPR ’s institutional
capabilities. Our cadre of seasoned criminal investigators and former prosecutors
are sought after by other law enforcement agencies for their expertise on the
Coronavirus Aid, Relief, and Economic Security (CARES) Act and programs within
SIGPR’s jurisdiction. My office has developed this knowledge, in part, by analyzing
thousands of records, including documents obtained by subpoena, and by
conducting numerous witness interviews.
In recognition of this significant return on investment, last month Congress passed,
and President Biden signed, the Consolidated Appropriations Act of 2022. This
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legislation granted SIGPR an additional $8 million, which brings our total amount of
appropriated funds to $33 million. We expect that these additional funds will
sustain SIGPR operations through the end of the current fiscal year. We are grateful
to Congress and the President for this meaningful investment, and I would
especially like to thank the many congressional and administrative offices that took
time to meet with me and my staff this quarter.
Now I must leave these proud notes of success and turn to the future. Identifying,
investigating, charging, and prosecuting to verdict white collar fraud cases often
takes several years. It entails combing through voluminous paper trails, flyspecking
loan agreements, and piecing together fraud schemes from emails and elaborate
bank transactions. Once SIGPR has found fraud and puts a case together, we then
refer that case to DOJ for prosecution. Our special agents and attorneys then work
alongside the appropriate U.S. Attorney’s Office by preparing exhibits and
affidavits, interviewing witnesses, and testifying before the grand jury until the
government obtains a true bill of indictment. Then we assist the prosecution from
pretrial motions to the conclusion of trial. A single, five-year term is not enough
time to complete the 27 cases that SIGPR is already working, let alone finish
additional cases we may unearth in the coming months.
Prosecuting Main Street Lending Program (MSLP) fraud is especially difficult
because these loans will not mature until after SIGPR expires in March 2025. As we
seek to clean the Augean stables of pandemic relief fraud, we must identify
criminal conduct by a borrower years before the Treasury-backed loan matures.
Loan defaults may well occur after SIGPR has wound down operations.
As with the special inspectors general for the Troubled Asset Relief Program and
the reconstructions in Iraq and Afghanistan, SIGPR needs more than a single term. I
therefore respectfully ask Congress to extend SIGPR’s tenure another five years, to
March 2030.
In addition to an extension of SIGPR’s term, we also respectfully request a place in
the annual appropriations cycle. We are grateful to the President, who has
recommended that Congress provide SIGPR $25 million until September 30, 2025.
That budget will allow SIGPR to hire more investigators and auditors. It will also
assure my staff that serving the country at SIGPR is a dependable way to provide
for themselves and their families.
An annual budget, combined with a five-year extension, will give SIGPR the tools to
strike deep and hold fast in the hunt for pandemic relief fraud. With the continued
backing of Congress and the President, and with the aid of our many partners in the
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law enforcement community, we will bring to justice those who preyed on
emergency financial relief during a time of profound national crisis.
Very respectfully,
Brian Miller
Special Inspector General for Pandemic Recovery
April 29, 2022
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HIGHLIGHTS
THIS QUARTER SIGPR:
• Completed three independent reviews into whether Treasury obtained required
documentation from direct loan recipients.
• Continued an audit of Treasury’s monitoring of the Direct Loan Program.
• Launched an audit into what role, if any, lobbying played in the direct loan process
for businesses critical to maintaining national security.
• Managed 27 full investigations.
• Received and vetted 180 hotline complaints, referring 70 to other agencies.
• Collaborated with other agencies on cases involving alleged fraud by MSLP
borrowers, including one borrower who pleaded guilty to a criminal information.
• Continued an investigation that has resulted in an indictment in the U.S. District
Court for the Middle District of Florida. Because the indictment was returned after
the reporting period, it will appear in the investigative activities for SIGPR ’s next
quarterly report.
• Strengthened inter-agency partnerships to strategically leverage resources and
capabilities in support of lead-development, audits, investigations, and case
referrals.
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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
Over the past quarter, SIGPR continued to work with Treasury and Congress on issues
related to budget and appropriations. SIGPR is grateful to these and all other members of
Congress, congressional staff, Treasury officials, Office of Management and Budget
officials, and others who devoted time to these matters. Their efforts culminated in an
appropriation of $8 million to SIGPR under the Consolidated Appropriations Act of 2022, a
sum that will be essential to detecting and redressing fraud, waste, or abuse involving
CARES Act funds.
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CONTENTS
SIGPR OVERSIGHT
Audits 2
Investigations 5
FINDINGS AND DEVELOPMENTS
Direct Loans and Other Investments 10
SECTION 1 SIGPR OVERSIGHT
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:
The Office of Audits completed three independent reviews into the
memoranda that Treasury prepared to confirm that it had obtained all
documents required from direct loan recipients. The office also continued an
audit of Treasury’s monitoring of the Direct Loan Program. In addition, the
office began an audit into what role, if any, lobbying had in the process of
issuing direct loans.
The Office of Investigations vetted 180 hotline complaints. It also initiated five
full investigations and closed two, bringing the total number of open
investigations to 27. In addition, the office secured a criminal complaint, a
criminal information, and a guilty plea through its continued investigative
efforts and coordination with law enforcement partners.
SIGPR executed memoranda of understanding with three additional U.S.
Attorneys’ Offices. These memoranda establish the purpose, mission, and
objectives of cooperative civil and criminal law enforcement efforts related to
programs funded under section 4003(b) of the CARES Act. They emphasize
investigating and prosecuting organized criminal activity, as well as criminal
and civil fraud affecting federal money, vulnerable victims, and fraud
recidivists.
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 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.
1 See CARES Act § 4018(c)(1).
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SIGPR OVERSIGHT
Independent Reviews of 4003(b) Loan Recipients’ Validation Memoranda
The Office of Audits has issued three independent reviews of
Treasury’s Validation Memoranda for direct loan applications
from Frontier Airlines, Inc., American Airlines, Inc., and Alaska
Airlines, Inc. A Validation Memorandum is a document that
Treasury created to confirm that the applicant submitted all
required documentation. Once a Validation Memorandum was
completed, the 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 will help SIGPR determine
whether Treasury acquired all required documents from each applicant prior to
approving the applicant for funding from the Direct Loan Program. SIGPR identified
minor discrepancies in the Validation Memoranda for Alaska Airlines and American
Airlines and no issues with the Validation Memorandum for Frontier Airlines. The
results of these attestation reviews will be included with the overall audit of the section
4003(b) loan program.
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,
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. The Office of Audits selected a sample of 17
of the 35 borrowers. The audit team will test how Treasury
monitored the sample borrowers for compliance with the CARES Act
and loan agreements.
Audit of Direct Loan Program Recipients’ Use of Lobbying
SIGPR held an entrance conference with Treasury officials on February 24, 2022, to
launch its Audit of Direct Loan Program 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 the
loan process.
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SIGPR OVERSIGHT
Department of Defense Office of Inspector General Audit of National Security
Designations
Additionally, SIGPR continues to partner with the Department of Defense (DOD) Office of
Inspector General in its audit of national security designations for businesses. This joint
effort reviews DOD’s recommendations to Treasury as to whether NSLP applicants should
be designated as critical to maintaining national security. The purpose of the audit is to
understand how DOD arrived at those recommendations.
Data Analysis
The Office of Audits Data Analytics Division continues to play an integral role in SIGPR ’s
mission and success. SIGPR’s data analytic platform uses sophisticated software and tools
that process large quantities of data and analyze them to detect potential program fraud
and misuse. These tools are valuable not only for
SIGPR’s audit work, but also for other proactive
initiatives. The division has developed a data
library containing over 90 million rows of CARES
Act funding information, drawn from both public
and sensitive sources, and updates the library at
least quarterly to maintain accurate and relevant
information.
In all, the Data Analytics Division:
• creates 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 anomalies;
• 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, 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
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SIGPR OVERSIGHT
• collaborates with various inter-governmental agencies, committees, and third-
party vendors to stay informed about emerging analytic technologies,
techniques, tools, and methodologies.
In addition, the Office of Audits Data Analytics Division is reviewing datasets that the
Pandemic Response Accountability Committee (PRAC) shared with various federal Offices
of Inspector General. When reconciled with other available information, the datasets will
be of great benefit to SIGPR in its commitment to detecting and preventing fraud, waste,
and abuse related to CARES Act funds.
Investigative Support
The Office of Audits provides forensic auditing services, including financial
records analysis, in support of investigations conducted by the Office of
Investigations. The Office of Audits is examining 10 requests for
investigative support, along with audit support to ongoing investigative
efforts.
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 members of the
public to report fraud, waste, abuse, or misconduct.
Investigative Activities
The Office of Investigations routinely collaborates across SIGPR components to vet
complaints, develop proactive efforts, and pursue investigations. In addition, SIGPR
conducts investigations in partnership with various U.S. Attorneys’ Offices, the DOJ, the
PRAC Fraud Task Force, and other federal law enforcement partners.
During this reporting period, the office continued its investigative focus 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.
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SIGPR OVERSIGHT
SIGPR Investigative Activity – January 1, 2022 through March 31, 2022
Hotline Complaints
Hotline Complaints Received 180
Referrals to Other Agencies 70
Preliminary Inquiries
Opened 0
Closed 0
Converted to Full Investigation 5
Ongoing 0
Investigations
Opened 5
Closed 2
Ongoing* 27
Criminal Actions †
Referrals to the Department of Justice 1
Referrals to State/Local Prosecuting Authorities 0
Indictments/Informations** 1
Arrests/Summons 2
Convictions/Pleas 1
Sentencings 0
Civil Actions
Referrals to the Department of Justice 0
Civil Judgments/Settlements 0
Other Enforcement Actions
IG Subpoenas Issued 1
Investigative Monetary Results
Funds Seized/Forfeitures $596,477
Restitution 0
Fines and Penalties 0
Civil Judgments/Settlements 0
Cost Recoveries 0
Cost Savings 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 investi-
gations with other agencies.
** The total number includes all charging documents resulting from any prior referrals to prosecutorial
authorities.
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SIGPR OVERSIGHT
EDMOND, OK WOMAN PLEADS GUILTY TO MAIN STREET LENDING PROGRAM
FRAUD
In January 2022, an Edmond, Oklahoma woman pled guilty in the U.S. District Court for the
Western District of Oklahoma, to bank fraud and money laundering related to a loan
obtained through the MSLP.
The woman was charged by information with fraudulently obtaining an MLSP loan for her
business. SIGPR special agents, along with counterparts from the Federal Reserve Board
OIG, Federal Bureau of Investigation, Internal Revenue Service-
Criminal Investigation, U.S. Secret Service, and Small Business
Administration OIG, determined the woman obtained the loan
from a local bank in Oklahoma in September 2020 and executed
a loan agreement falsely representing she would use MSLP
funds for working capital and payroll only. She also falsely
represented she would not make financial distributions to herself
as the company owner. The woman laundered the loan proceeds
by using them to pay for construction of her personal home.
Other loan funds were used to purchase a luxury vehicle for her
personal use.
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 180 hotline complaints,
as indicated in the table and chart below.
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SIGPR OVERSIGHT
Complaints by Category
Received January 1, 2022 – March 31, 2022
Category Total
Title I – Paycheck Pr otection Program 11
Title IV, Subtitle A – 13(3) Facilities (MS LP) 0
Title IV, Subtitle B – Payroll Support Program 0
Title V – Coronavirus Relief Fund 11
Other
COVID -19 Economic Inj ury Disaster Loans 1
Economic Impact Payments 7
Income Tax Related 5
Non-Program Related 106
Rental and Housing Assistance Prog rams 33
Social Security Benefits Related 3
Unemployment Insurance Prog rams 3
Grand Total 180
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SECTION 2
FINDINGS AND
DEVELOPMENTS
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).”2
Accordingly, below are the categories of loans and other investments made by Treasury
under CARES Act section 4003,3 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 section 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).4 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. 5 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
2 CARES Act § 4018(f)(1)(B).
3 Treasury did not establish a program for “loan guarantees” under CARE S Act secti on 4003.
4 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.g ov/data/
other-programs (last visited Apr. 18, 2022).
5 See Consolidated Appropriations Act, 2021, Pub. L. 116 -260, div. N §§ 1003, 1005.
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FINDINGS AND DEVELOPMENTS
facilities in the MSLP, which were authorized to purchase loans until January 8, 2021, for
applications submitted by December 14, 2020. 6
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 March
31, 2022:
Funding Program Outstanding Amount as of March 31, 2022
Direct Loans to Passenger Air Carriers
$255,473,818
and Related Businesses
Direct Loans to Cargo Air Carriers $2,374,217
Direct Loans to Businesses Critical to
Maintaini ng National Security $744,613,899
Treasury Investment Remaining as of
Funding Program
March 31, 2022
Main Street Lending Program (MS Facil-
$15,698,805,108
ities, LLC)
Term Asset-Backed Securities Loan
$1,400,000,000 (plus interest)
Facility (TALF II, LLC)
Primary and Secondary Market Corpo-
rate Credit Facility (Corporate Credit $0
Facilities, LLC)
Municipal Liquidity Facility (M unicipal
$4,200,000,000 (plus interest)
Liquidity Facility, LLC)
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).7 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
6 Id. § 1005.
7 U.S. Dep’t Treasury, Procedures and Minimum Requirements for Loans to Air Ca rriers and Eligible Businesses
and National Security Businesses under Division A, Title IV, Subtitle A of the Corona virus Aid, Relief, and Eco-
nomic Security Act (M ar. 30, 2020), https://home.treasury.gov/system/files/136/Proced ures and Minimum
Requirements for Loans.pdf.
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FINDINGS AND DEVELOPMENTS
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.8
Total
Outstanding Cash
Maturity Total Loan Disbursements 9
Recipient Loan Date Loan Interest
Date Amount
Amount 10 Receipts
Aero
Hydraulics, 10/26/2020 10/24/2025 $450,000 $450,000 $507,914 $0
Inc.
9/28/2020
Alaska (amended
Airlines, Inc. 10/30/2020 9/26/2025 $1,928,000,000 $135,000,000 $0 $2,538,900
and
1/15/2021)
Allflight
Corporation 11/5/2020 11/5/2025 $4,721,260 $4,721,260 $4,721,260 $420,822
9/26/2020
American (amended
Airlines, Inc. 10/21/2020 6/30/2025 $7,500,000,000 $550,000,000 $0 $10,257,500
and
1/15/2021)
American Jet
International 11/5/2020 11/5/2025 $1,162,124 $1,162,124 $1,181,571 $85,119
Corp
Aviation
Management 11/5/2020 11/5/2025 $4,026,705 $4,026,705 $4,294,825 $0
& Repairs, Inc.
Bristin Travel,
LLC 10/26/2020 10/24/2025 $549,651 $549,651 $591,163 $9,320
Caribbean
Sun Airlines, 11/5/2020
11/5/2025 $6,768,7 49 $6,768,7 49 $7,369,731 $0
Inc. (amended
8 See U.S. Dep’t Treasury, Report Under Section 4026(b)(1)(C) of the CARES Act on Loans to Air Carriers, Eligi-
ble Businesses, and National Security Businesses (Apr. 1, 2022), https://home.treasury.gov/system/
files/136/4026b1CLoanReport040 12022.pdf; see also U.S. Dep’t Treasury, Loans to Air Carriers, Eligible Busi-
nesses, and Nationa l Security Businesses, https:// home.treasury.g ov/policy -issues/cares/preserving-jobs-for-
american-industry/loans -to-air-carriers -eligible-businesses-and-nati onal-security -businesses (last updated
Jan. 21, 2021).
9 “‘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 Ca rriers, Eligible Businesses, and National Security Businesses (Ap r. 1,
2022), https://home.treasury.gov/system/files/136/4026b1CLoanReport040 12022.pdf.
10 “‘Total Outstanding Loan Amount’ includes all loan disbursements and increases of loan pri ncipal amount
arising from payment-in-kind (PIK) interest, less any repayments of principal.” Id.
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FINDINGS AND DEVELOPMENTS
Total
Outstanding Cash
Maturity Total Loan Disbursements 9
Recipient Loan Date Loan Interest
Date Amount
Amount 10 Receipts
Eastern
Airlines, LLC 10/28/2020 10/28/2025 $15,000,000 $15,000,000 $16,453,541 $0
Elite Airways, 11/9/2020
LLC (amended 11/7/2025 $2,630,274 $2,630,274 $2,867,017 $0
12/1/2020)
Frontier 9/28/2020
Airlines, Inc. (amended 9/26/2025 $574,000,000 $150,000,000 $0 $5,548,667
1/15/2021)
9/25/2020
Hawaiian (amended
Airlines, Inc. 10/23/2020 6/28/2024 $622,000,000 $45,000,000 $0 $450,450
and
1/15/2021)
Island Wings,
Inc. 11/5/2020 11/5/2025 $294,350 $294,350 $321,561 $0
JetBlue 9/29/2020
Airways (amended
11/29/2025 $1,948,000,000 $115,000,000 $0 $3,330,113
Corporation 11/3/2020 and
1/15/2021)
Legacy
Airways, LLC 10/20/2020 10/25/2025 $1,817,306 $1,817,306 $2,052,656 $0
Mesa Airlines,
Inc. 10/30/2020 10/30/2025 $195,000,000 $195,000,000 $204,947,017 $0
Ovation
Travel Group, 10/15/2020 10/15/2025 $20,000,000 $20,000,000 $0 $181,881
Inc.
Republic
Airways, Inc. 11/6/2020 11/6/2025 $58,000,000 $58,000,000 $0 $1,622,308
9/29/2020
SkyWest (amended
Airlines, Inc. 10/28/2020 9/29/2025 $725,000,000 $60,000,000 $0 $1,196,767
and
1/15/2021)
Southern
Airways 10/28/2020 10/28/2025 $1,838,501 $1,838,501 $1,838,501 $171,409
Express, LLC
Sun Country,
Inc. 10/26/2020 10/24/2025 $45,000,000 $45,000,000 $0 $77,125
Thomas
Global 11/9/2020 11/7/2025 $1,400,000 $1,400,000 $1,530,278 $0
Systems, LLC
Timco Engine
Center, Inc. 11/5/2020 11/5/2025 $8,390,240 $8,390,240 $9,171,000 $0
9/28/2020
(amended
United 11/6/2020,
Airlines, Inc. 9/26/2025 $7,491,000,000 $520,000,000 $0 $9,517,733
12/8/2020,
and
1/15/2021)
13 SP E CI A L I N SP E CT O R G E N E RA L | P A N D E M I C R E CO V E R Y
FINDINGS AND DEVELOPMENTS
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. 11
Total
Outstanding Cash
Loan Maturity Total Loan Disbursements 12
Recipient Loan Interest
Date Date Amount
Amount 13 Receipts
Channel Logistics,
LLC 11/12/2020 11/12/2025 $2,500,000 $2,500,000 $2,584,410 $142,372
Core Avionics &
Industrial, Inc. 11/5/2020 11/5/2025 $6,000,000 $6,000,000 $0 $213,998
Map Large, Inc. 11/2/2020 10/31/2025 $10,000,000 $10,000,000 $11,260,517 $0
Meridian Rapid
Defense Group, 10/30/2020 10/30/2025 $7,100,000 $7,100,000 $7,912,647 $79,019
LLC
Ovio Technologies,
Inc. 11/2/2020 10/31/2025 $1,186,900 $1,186,900 $1,336,511 $0
Semahtronix, LLC 11/13/2020 11/13/2025 $1,999,100 $1,999,100 $0 $777
Semantic AI, Inc. 11/13/2020 11/13/2025 $506,300 $506,300 $553,718 $0
SpinLaunch, Inc. 11/13/2020 11/13/2025 $2,519,200 $2,519,200 $2,519,200 $224,997
Visual Semantics,
Inc. 10/30/2020 10/30/2025 $1,053,200 $1,053,200 $1,173,7 46 $11,722
11 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 Nationa l Security Businesses (April 1, 2022), https://home.treasury.gov/system/
files/136/4026b1CLoanReport040 12022.pdf; see also U.S. Dep’t Treasury, Loans to Air Carriers, Eligible
Businesses, and Nationa l Security Businesses, https:// home.treasury.gov/policy-issues/cares/preserving -jobs
-for-american-industry/ loans-to-air-carri ers -eligible-businesses-and -national-security -businesses (last
updated Jan. 21, 2021).
12 “‘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 Ca rriers, Eligible Businesses, and National Security Businesses (Ap ril 1,
2022), https://home.treasury.gov/system/files/136/4026b1CLoanReport040 12022.pdf.
13 “‘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.
RE P O R T T O CO N G RE SS | J AN U ARY TO M AR CH 20 2 2 14
FINDINGS AND DEVELOPMENTS
Total
Outstanding Cash
Maturity Total Loan Disbursements 12
Recipient Loan Date Loan Interest
Date Amount
Amount 13 Receipts
Wiser Imagery
Services, LLC 10/30/2020 10/30/2025 $3,069,7 00 $3,069,7 00 $3,459,124 $0
Yellow
Corporation14 7/8/2020 9/30/2024 $700,000,000 $700,000,000 $713,814,026 $25,177,821
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.”15
The Federal Reserve established several liquidity programs (facilities) pursuant to section
13(3) of the Federal Reserve Act.16 That provision, used extensively during the 2008
financial crisis and amended by the Dodd-Frank Wall Street Reform and Consumer
Protection Act,17 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.”18
The Federal Reserve Board was required to consult with the Secretary of the Treasury
prior to the Board’s 2015 issuance of regulations governing emergency lending under the
statute.19 The Federal Reserve may not establish any emergency lending program under
section 13(3) without prior approval of the Secretary of the Treasury. 20
Of note, as of March 31, 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
14 YRC Worldwide changed its name to Yellow Corporation. Id.
15 CARES Act § 4003(b)(4)(A)–(C).
16 See 12 U.S.C . § 343(3).
17 Pub. L. 111-203, 124 Stat. 1375.
18 12 U.S.C. § 343(3)(A ); see also 12 C.F.R. § 201.4(d).
19 12 U.S.C. § 343(3)(B)(i ).
20 12 U.S.C . § 343(3)(B)(iv).
15 SP E CI A L I N SP E CT O R G E N E RA L | P A N D E M I C R E CO V E R Y
FINDINGS AND DEVELOPMENTS
recognized approximately $23 million in actual loan losses. 21 In addition, an evaluation of
loan participations purchased by MS Facilities, LLC resulted in a reported loan loss
allowance in the amount of $2 billion. 22 The allowance for loan losses is estimated based
upon MS Facilities, LLC’s holdings as of December 31, 2021.23
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 March 31, 2022.24
Treasury Investment Remaining as
Recipient
of March 31, 2022
MS Facilities, LLC $15,698,805,108
TALF II, LLC $1,400,000,000 (plus interest)
Corporate Credit Facilities, LLC $0
Municipal Liquidity Facility, LLC $4,200,000,000 (plus interest)
The SPVs have returned the following amounts to Treasury as of March 31, 2022.
Investment Returned to Treasury
Recipient
as of March 31, 2022
MS Facilities, LLC $21,825,594,384.02
TALF II, LLC $8,635,924,341.57
Corporate Credit Facilities, LLC $37,980,215,713.55
Municipal Liquidity Facility, LLC $13,280,140,963.54
These facilities have stopped extending loans or purchasing obligations. Transaction-
specific details for the facilities are available on the Federal Reserve’s website.25 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
Main Street Lending Program on a periodic basis going forward.
21 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 (Apri l 11, 2022), https://
www.federalreserve.gov/publications/files/13 -3-report-20220412.pdf.
22 See id.
23 See id.
24 See id.
25 See Bd. of Governors of the Fed. Reserve Sys., Reports to Congress Pursuant to Section 13(3 ) of the Federa l
Reserve Act in response to COVID-19, https://www.federalreserve.gov/publications/ reports-to-congress -in-
response-to-covid-19.htm (last updated April 12, 2022).
RE P O R T T O CO N G RE SS | J AN U ARY TO M AR CH 20 2 2 16
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