by Joon H. Kim, Jonathan S. Kolodner, Elizabeth Vicens, and Natalie Noble

On Friday, March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (PDF: 472 KB) (“CARES Act”) became law, marking the third phase of government aid to combat the COVID-19 pandemic. This $2 trillion stimulus package, the largest in American history, will be accessed by wide swaths of the economy, with similarly widespread potential for fraud. Consequently, the accountability and oversight provisions built into the CARES Act, especially of the $500 billion corporate relief fund, warrants attention. Taking its cue from—and seemingly modeled after—the 2008 Troubled Asset Relief Program (“TARP”), the CARES Act establishes a three-part oversight structure, including a Special Inspector General for Pandemic Recovery (“SIGPR”) with far-reaching authority to monitor the $500 billion fund. Based on the experience with TARP oversight and the enforcement actions taken by the Special Inspector General of TARP (“SIGTARP”) over the years, we can expect a high level of scrutiny by SIGPR and the other overseers, as well as potentially years of investigations into fraud and misuse of CARES Act funds resulting in substantial monetary penalties and criminal referrals. Continue reading →