Sources: USA Swimming Latest NGB To Come Under Federal Investigation
Federal prosecutors in N.Y. are "investigating USA Swimming, including allegations that the organization stifled athlete sexual-abuse claims, concealed its assets and improperly reaped hundreds of thousands of dollars in rebates from its in-house insurance company," according to sources cited by Rebecca Davis O'Brien of the WALL STREET JOURNAL. Prosecutors are "particularly interested in what some people described as 'the money trail' between USA Swimming" and the organization's "insurance company and its affiliated foundation." A USA Swimming spokesperson said that the organization was "confident in the integrity of its finances and tax filings, including for the foundation and the insurance company, which is now defunct." The investigation is "focused on two separate alleged business practices within the Colorado-based nonprofit organization." USA Swimming in '88 set up a "so-called single-parent captive insurance company in Barbados." The company, the United States Sports Insurance Co., was "fully owned by USA Swimming, and provided reinsurance for carriers that sold policies on behalf of USA Swimming to local swim clubs throughout the U.S." Sources said that prosecutors are "scrutinizing the relationship with the insurance company as a potential avenue for self-dealing by USA Swimming, as well as for possible misstatements in tax filings. Sources said that the USA Swimming Foundation is "also of interest to investigators." Sources also said that prosecutors are "interested in whether USA Swimming improperly moved cash to the foundation to conceal its assets." In the past decade, the foundation's endowment "has tripled," from just under $5M in '08 to $18.3M in '17, tax records show (WALL STREET JOURNAL, 10/2).