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The Daily News of Los Angeles
All Olympia Gymnastics Center, the world renown Hawthorne academy, recently finalized a $1 million settlement with World Championships silver medalist Mattie Larson, her attorney confirmed to the Southern County News Group.
The settlement stems from Larson's lawsuit in Los Angeles Superior Court against AOGC and its directors Artur Akopya and Galina Marinova that alleged their treatment of Larson led to her being sexually abused by former U.S. Olympic and USA Gymnastics national team physician Larry Nassar. While Akopya and Marinova agreed to pay Larson $1 million in June, the deal was only recently completed.
The suit alleged All Olympia and Akopya and Marinova "fueled an abusive, harassing and degrading environment." That environment "allowed, concealed and promoted abusive behavior" by Nassar, former U.S. national team directors Bela and Martha Karolyi and USA Gymnastics. Specifically the suit alleged Akopya and Marinova "directed degrading, abusive, and harassing comments and actions towards" Larson.
AOGC is shutting down its Hawthorne location according to a Nov. 3 letter from Akopya and Marinova to AOGC gymnasts, parents and coaches. The closing and the Larson settlement mark a fall from grace for AOGC that few could have imagined in the early years of this decade.
AOGC gained global recognition with the emergence of Larson and later McKayla Maroney, the 2012 Olympic champion whose celebrity transcended the sport, only to now find itself near the center of the Nassar sexual abuse scandal that this week led the U.S. Olympic Committee to take the first step toward stripping USA Gymnastics of its national governing body status.
Akopya and Marinova did not respond to a request for comment.
The USOC's bid to revoke USA Gymnastics' NGB status and the AOGC case, however, are just two strands of a multi-layered scandal that is being played out in courtrooms and board rooms from coast to coast.
The Federal Bureau of Investigation's Indianapolis office on Tuesday refused to accept a subpeona requesting records in three-time Olympic champion Aly Raisman's lawsuit against the USOC, according to a person familiar with the case.
Even as USA Gymnastics faces decertification and potentially hundreds of millions in legal settlements and the FBI comes under increasing scrutiny for its potential role in the cover-up of Nassar's abuse, a number of high profile gymnastics coaches and officials continue to rally around the NGB and polarizing figures like Akopya and Marinova.
"It is a sad day when Southern California looses (sic) a gym that has been so instrumental for the development of gymnastics," Carol McIntyre, president of the So Cal Women's Gymnastics Coaches Association, wrote in an email Monday to the Southern California gymnastics community. "I can't imagine how devastating this is to Galina.
"... With USA Gymnastics being in the hot seat once again, Lets work together and show the pride and Class Southern California is famous for. We have always been the leaders of the country. Lets rise above the negative perception that has been bestowed on our beautiful sport by no fault of our own. Lets all remember we are competitive, but we are colleagues first. Athletes will come and go but we will all remain.
"Let's band together and show the country we will not buckle under the pressure. We will hold our heads high and continue to show this country and community true leadership."
McIntyre did not respond to a request for comment.
John Manly, an attorney for Larson and dozens of other survivors, said McIntyre's comments were "emblematic of the culture of USA Gymnastics where athletes come and go sort of like cattle and that's how they look at them. It's an abusive culture."
"People," Manly added, "don't pay a million dollars if they didn't do anything wrong."
The Justice Department's inspector general's office is investigating how the FBI handled the Nassar case.
Former USA Gymnastics chief executive Steve Penny consulted with W. "Jay" Abbott , the special agent in charge of the FBI's Indianapolis office as early as July 2015, a month after Penny was first informed of allegations that Nassar had sexually assaulted gymnast Maggie Nichols at a U.S. national team training camp at the Karolyi Ranch.
In a July 29, 2015 email to Abbott, Penny wrote "Below are two pieces of our communication strategy moving forward. We wanted to share them with you for your quick review to be sure they are consistent with FBI preferences. Please let us know if you concur with our messaging."
Then USA Gymnastics board chairman Paul Parilla, an Orange County attorney, and Scott Himsel, an attorney representing USA Gymnastics, were copied on the email.
Abbott replied to Penny later that day "certainly respond as you deem appropriate."
A day later Penny emailed Abbott again.
"I am so sorry to continue bothering you with this issue. ... As you can see below, we have a very squirmy Dr. Nassar. Our biggest concern is how we contain him from sending shockwaves through the community. In our conversations with Scott, we are trying to make sure any correspondence with him is consistent with FBI protocol. Right now we are looking for a graceful way to end his service in such a manner that he does not 'chase the story.'"
Penny was forced to resign under pressure from the USOC in March 2017. He was arrested last month after a Walker County, Texas grand jury indicted him on felony evidence tampering charges. The indictment alleges Penny was involved in the removal and destroying and/or hiding of medical records from the Karolyi Ranch in central Texas, the longtime training site of the U.S. women's national and Olympic team.
Both Penny and Amy White, the national team manager for USA Gymnastics acrobatic gymnastics program, have both indicated they will exercise their Fifth Amendment right against self incrimination in depositions related to Raisman's lawsuit against USA Gymnastics and the USOC. The suit is scheduled to go to trial in U.S. District Court in San Jose in February.
USA Gymnastics board of directors, under pressure from the organization's insurance carriers, has weighed filing for Chapter 11 bankruptcy. Such a move could establish a bar date in which future claims against the organization could not be filed after a certain window. A Chapter 11 filing would also lead to an automatic stay on all proceedings and litigation, including discovery, against USA Gymnastics.
USA Gymnastics, which has tax exempt non-profit status, reported $34.47 million in revenue for the fiscal year 2016, according to filings with the Internal Revenue Service. The organization also reported $11.8 million in assets, $8.7 million in liabilities.
The National Gymnastics Foundation Inc., created to supported charitable and educational programs for USA Gymnastics, listed $16.27 million in assets in 2016 with only $788 in liabilities.
A Chapter 11 filing could also help the USA Gymnastics head off, at least temporarily, the USOC's decertification process.
"If I was USAG and I wanted to stop decertification by the USOC I would go (to bankruptcy court) because it prohibits you from proceeding," said attorney Jim Stang, who has written extensively on bankruptcy issues and served on the creditors committee in 13 child sexual abuse cases. "The bankruptcy court judge is like a traffic cop. Should I allow this decertification to continue? Or should I let it go for now or just stop it or keep the red light on? Is there something that can be worked out to keep USAG's value (to raise funds to pay creditors)? What is the value if USAG is decertified?"
Establishing a bar date under Chapter 11 would also give USA Gymnastics' insurance carriers "a tremendous amount of certainty," Stang said.
"You're going to get (in bankruptcy) court a deal that's hard to get in state court," he said.
The move could also enable the USOC as a related party to obtain a channeling injunction against future claims even without actually declaring bankruptcy itself.
Under this scenario the USOC would contribute to a settlement fund in exchange for being released from future claims.
Channeling injunctions have been issued in all 13 child sex abuse cases Stang has been involved with since 2004.
The Roman Catholic Archdiocese of Portland, Oregon filed for Chapter 11 in U.S. Bankruptcy Court in July 2004 just hours before the scheduled start of a civil trial in which survivors who alleged they were sexually abused by a priest sought $160 million in damages. Other sexual abuse claims had already cost the archdiocese $53 million and its "major insurers have abandoned us," Portland Archbishop John G. Vlazny wrote at the time of the bankruptcy filing.
"The pot of gold is pretty much empty right now," Vlazny said
Michigan State reached a $500 million settlement with more than 300 of Nassar's survivors in May. Nassar was a longtime member of the university's sport medicine staff.
Under the terms of the settlement $425 million was paid to 332 known Nassar survivors with an additional $75 million placed in a trust fund for future claimants.
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