WSJ: Federal Prosecutors Investigating USA Swimming Over Insurance, Foundation

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.”

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Tsa3
11 months ago

W.O.W!

William Wallace
11 months ago

Das tuff.

Kyle
11 months ago

Trusting your team management is tough enough, so it is very sad when you can’t even trust USA Swimming.

About Jared Anderson

Jared Anderson

Jared Anderson swam for nearly twenty years. Then, Jared Anderson stopped swimming and started writing about swimming. He's not sick of swimming yet. Swimming might be sick of him, though. Jared was a YMCA and high school swimmer in northern Minnesota, and spent his college years swimming breaststroke and occasionally pretending …

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