The Wall Street Journal reports that federal prosecutors are investigating USA Swimming over its handling of sexual abuse cases, and insurance criticisms the organization has faced for years. The FBI and the Manhattan U.S. Attorney’s Office are leading the investigation, and a grand jury in Manhattan has heard evidence, per the Journal.
The allegations presented in the WSJ article are not new, and have been swirling for years. There have been previous reports of the U.S. Department of Justice and/or the FBI investigating national governing bodies.
On the other hand, the WSJ‘s reporting of a grand jury is a new development that we haven’t reported on before.
Investigation into Insurance, USA Swimming Foundation
Wednesday’s Wall Street Journal story says that agents and prosecutors in New York are tracking what it calls a “money trail” between USA Swimming and its former in-house insurance company. That’s been a long-standing criticism of USA Swimming. Per the WSJ, in 1998, USA Swimming set up a single-parent captive insurance company in Barbados called United States Sports Insurance Co. The in-house insurance company allegedly allowed USA Swimming to cut down its legal liability in sexual abuse cases.
USA Swimming says the United States Sports Insurance Co. was sold in 2014 and that it now gets its insurance elsewhere.
The report also says that prosecutors are investigating the USA Swimming Foundation, which is the philanthropic arm of USA Swimming. The WSJ references “people familiar with the investigation” who say prosecutors are investigating whether USA Swimming moved money to the foundation in order to conceal USA Swimming assets and further protect themselves from legal liability.
Tax records show that “hundreds of thousands of dollars changed hands between the two organizations [USA Swimming and the USA Swimming Foundation]” each year, per the Journal.
USA Swimming said that they “support any government investigation that goes toward protecting athletes,” but denied wrongdoing in their finances.
“There is no validity to the claims about USA Swimming’s financial or business practices and that our financial details and reports have always been reviewed by unaffiliated, third-party auditors and made publicly available on our website,” a spokesperson said. “We are confident in our reporting.”
If any of you government agencies reading any of this, I suggest you start with canyons aquatic club in Santa clarita, investigate the money laundering scheme they been practicing for decades, investigate the board, their coaches since one of them was involved in multiple sex abuses and how they treat their supposed elite swimmers, it’s run like a cult. Start off with them and somehow the trail will always lead back to the very foundation we’re supposed to entrust. Send a large team, you won’t be disappointed.
They are beating a dead horse unless they have a whistleblower its just a fishing expedition.
The WSJ is known for high quality investigative journalism. Too bad in that for 95%+ of the readership this will be the only news they get about swimming in the US this year.
Maybe the article and investigation will spur some positive change in US Swimming governance.
Start with those who obstructed the Board’s move in 2014 to bring USIC on shore or accept a liquidation sale for $18 million – look at the 2014 Board minutes to find out who. USAS would have ended its sex abuse liability by the sale of USIC assets and USAS would have had $18 million to help the athletes and membership programs. But vacations in the tropics for USIC Board meetings were too important to some.
This is very disheartening. The WSJ goes into the cover up of alleged sexual abuse claims and alleged insurance fraud claims. Of course nothing proven yet, and in hands of Grand Jury, which I assume indicts (as is their normal course). However to get to this stage where US attorney – FBI – GJ involved leads one to believe there is at least some evidence of wrongdoing or negligence. Always tough when kids are involved and sexual abuse claims. Just Very sad.
Trusting your team management is tough enough, so it is very sad when you can’t even trust USA Swimming.