Ten days after former U.S. Olympic gymnastics coach Don Peters was banned from the sport for life amid allegations of sexual abuse in November 2011, he ran up a $133.50 tab at the Titlow Tavern & Grille in Uniontown, Pa., 12 miles from his new home southeast of Pittsburgh.
Peters paid the bill at the 125-year-old establishment with a credit card on an account for SCATS, the nonprofit Huntington Beach gymnastics academy he first made world famous 30 years earlier.
Under the terms of the ban by USA Gymnastics that rocked the gymnastics world and the Olympic movement, SCATS and all other USA Gymnastics member clubs are prohibited from being involved with Peters.
Yet despite the ban, Peters has continued to oversee SCATS investments, has been listed as SCATS president and a “key employee” on financial documents, has made appearances at the SCATS facility and has charged meals on SCATS credit cards, a Southern California News Group investigation has found.
Peters, 67, also is listed as the “sole-shareholder” of a second gym, the for-profit Olympica Gymnastics Academy (OGA) in Laguna Hills, according to SCATS’ three most recent filings with the Internal Revenue Service. The filings were approved by Phyllis “Jean” Peters, Don’s wife and chairwoman of SCATS’ board of directors.
The Titlow Tavern bill follows a pattern that Peters, for three decades one of the most famous and successful coaches in international gymnastics, began when he was the top coach and chief executive at SCATS. Both before and after his expulsion, Peters routinely used SCATS credit cards and checking accounts for his personal benefit, according to documents obtained by the news organization that included IRS and California Department of Justice filings; credit card, bank and online trading statements; billing invoices; and memos from former employees.
Financial documents raise similar questions about charges to SCATS credit cards and checking accounts by Peters’ family members, who have continued to operate and control SCATS after Don Peters’ banishment.
Peters denied any association with SCATS in an email and said he does not own any part of OGA. That position was echoed by SCATS’ executive director, David N. Peters, who is Don Peters’ son.
“Don Peters is not employed by nor involved in any capacity with SCATS Gymnastics or OGA Gymnastics and has not been since his banning in 2011,” David N. Peters, wrote in an email. “I take his banning from the sport very seriously and will relieve fully any concerns that may be held in this regard.”
However, an examination of SCATS’ financial documents presented a different picture. Among the findings:
•Peters continued to use SCATS credit cards after the ban, sometimes running up monthly expenses of more than $800.
•Until at least August 2014, SCATS continued to pay Peters’ phone bill, the organization paying Verizon for four phone numbers in Don Peters’ name – two in California, two in Pennsylvania.
•Until at least February 2015, Peters continued to be responsible for SCATS’ stock portfolio. SCATS reported $614,589 in publicly traded securities at the end of the 2015 fiscal year, according to IRS records. SCATS began that fiscal year with $736,560 in securities.
•Family members regularly continued to charge restaurant and bar bills to SCATS credit cards. A SCATS CitiBusiness credit card in David N. Peters’ name charged a $5,000 payment to a luxury car dealer.
“Those are all red flags,” said Lindsay J.K. Nichols, vice-president at America’s Charities and former senior director for GuideStar, which bills itself as the world’s largest source of information on nonprofits.
Peters’ links to SCATS and the Olympic Gymnastics Academy appear to violate USA Gymnastics’ lifetime ban, which was prompted by a 2011 Orange County Register investigation into allegations that Peters had sex with teenage gymnasts in the 1980s. Under USA Gymnastics rules, member clubs and registered businesses agree “not to employ, or use as a volunteer, anyone who is on the ‘permanently ineligible list.’”
USA Gymnastics, the sport’s national governing body, began looking into Peters’ involvement with the two Orange County gyms after being contacted for comment last week.
“USA Gymnastics has banned Don Peters permanently from membership,” USA Gymnastics spokesperson Leslie King said in an email. “Its Member Club requirements mandate that a club cannot hire or be associated in any way with any person who is permanently ineligible for membership in the organization. USA Gymnastics is reviewing the matter.”
NONPROFIT STATUS
The Southern California Acro Team (SCATS) was founded in 1963 and obtained nonprofit status in 1974. For decades the club was run by a board of directors largely made up of parents. Peters was hired in 1979 and within a year had coached two gymnasts onto the 1980 U.S. Olympic team. He was named U.S. national team coach in 1981, a position he held until 1987 while running SCATS at the same time.
Four of the six members on the record-setting 1984 U.S. Olympic team trained under Peters at SCATS. Team USA won the team all-around silver medal at the Los Angeles Games and won eight medals overall, a total that was not surpassed by a U.S. Olympic women’s gymnastics team until the Simone Biles-led squad won nine medals last summer in Rio de Janeiro.
SCATS has produced more than 40 U.S. national team members and 14 U.S. Olympians, including 2014 Olympian Sam Mikulak, the U.S. all-around champion and and World Championships medalist. The gym currently has 1,300 students.
But the organization has had financial difficulties in recent years.
In October 2015, the California Department of Justice’s Registry of Charitable Trusts rejected SCATS’ application to renew its nonprofit status for failing to have independent audits conducted for the 2012, 2013 and 2014 fiscal years. In a Nov. 4, 2015 response to the registry, David N. Peters asked to be relieved of having to perform the three audits, maintaining the cost would “place a tremendous financial burden on our small school.”
“SCATS will inevitably need to lay off employees to free up funds to pay for the older three years of audits,” David N. Peters said in a letter to the Department of Justice.
Brenda Gonzalez, a spokesman for the California Attorney General’s office, said in an email Friday that SCATS’ nonprofit status is now current.
David N. Peters’ plea came at a time when SCATS was reporting a $65,459 deficit, yet his annual salary had tripled over the previous three fiscal years. David N. Peters was paid $214,731 for a 35-hour-per-week SCATS management position for the 2015 fiscal year, the most recent period available, according to financial records.
David N. Peters’ salary, Nichols said, “seems excessive to me.”
SCATS’ total employee compensation increased from $1.54 million in 2014 to $1.68 million in 2015.
SCATS is a 501(c)(3) tax-exempt nonprofit organization operated by a three-member board chaired by Jean Peters, according to filings with the IRS and the state. Under IRS rules, 501(c)(3) organizations are prohibited from allowing their income or assets from benefiting insiders such as board members, officers, directors and key employees.
Jean Peters received a salary of $102,869 for the 30-hour-a-week position even though she lives in Perryolopolis, Pa. The address she lists on the filing is the same one listed for her husband, Don Peters.
The two other members of the SCATS board of directors are David A. Peters, Don’s twin brother, who also lives in Pennsylvania; and Bill Callandar, a longtime Peters’ friend. Neither David A. Peters nor Callandar receives compensation from SCATS, according to the filings.
The IRS and state filings also lists three “key employees”: Don Peters, David N. Peters and Candice Peters, David N. Peters’ wife, who is paid $60,400 for a 30-hour-a-week bookkeeping job. The state filing lists Don Peters as a “key employee” five times.
“That’s a big red flag in its own right,” Nichols said. “It’s an ethical violation. If there are family members involved there’s supposed to be a separation between church and state between board leadership and leadership.”
SCATS’ 2015 IRS and state filings also state that “Donald R. Peters is the sole-shareholder of OGA Gymnastics Academy Inc.” in a section explaining the relationship between the two gyms. Both filings also list Don Peters as the “direct controlling entity” of the Olympic Gymnastics Academy.
“I am not an employee at SCATS, nor am I associated in any way with that organization,” Don Peters wrote in an email. “I can only believe that if my name is listed on any IRS form regarding SCATS it must be as a result of a filing error by SCATS’ CPA. I resigned all of my associations with SCATS back in 2011.
“I am not the sole shareholder in OGA, nor do I own any part of it. This also must have been a filing error.”
SCATS’ 2013, 2014, 2015 Form 990s, the form non-profits must file annually with the IRS, all say “Form 990 read and signed by Phyllis Peters.”
The Form 990s filed with the state’s Registry of Charitable Trusts for 2013 and 2015 include the same line right below a section of the form identifying Don Peters as a key employee at SCATS. If a Form 990 was filed with the state for 2014 it is unavailable.
In addition to her SCATS compensation, Jean Peters also received $48,000 from the Olympic Gymnastics Academy during the 2015 fiscal year, bringing her total annual compensation from the two gyms to $150,869. Jean Peters is listed in documents filed with the California Secretary of State’s office in February 2016 as the OGA’s chief executive officer, secretary, chief financial officer and sole director. David N. Peters and Candice Peters each received $15,958 from OGA in 2015.
‘PERMANENTLY INELIGIBLE’
Peters’ continued involvement at the two high-profile gyms comes at a time when four U.S. senators, including Dianne Feinstein, have raised concerns about how USA Gymnastics chief executive Steve Penny and other top USAG officials have handled sex abuse cases.
In a letter to Penny, the senators demanded he “explain how coaches or others supervise children are vetted and evaluated over time to ensure athletes in their care are protected.”
Doe Yamashiro, a former U.S. national team member who trained with Peters at SCATS in the 1980s, told the Register in 2011 that Peters repeatedly fondled her, beginning when she was 16, and had sexual intercourse with her when she was 17. A second former SCATS gymnast told the Register that Peters had sexual intercourse with her when she was 18. The woman said she had earlier been sexually abused by her father, a close friend of Peters, abuse that Peters was aware of, she said.
Linda McNamara, a former assistant director at SCATS who shared an office with Peters, told the Register that Peters confessed to her in the early 1990s to having sex Yamashiro, the second former SCATS gymnast and a third teenage gymnast.
Following the investigation, USA Gymnastics in November 2011 placed Peters on the organization’s permanently ineligible list and removed him from the sport’s Hall of Fame.
Because of measures adopted by USA Gymnastics following the Register investigation of Peters and former U.S. national team coach Doug Boger, banned coaches are prohibited from working at the more than 2,000 “member clubs” sanctioned by USA Gymnastics as well as approximately 300 entities designated as “registered businesses” by USAG. Boger, the news organization found, continued to coach at a non-member gym in Colorado Springs even after being banned by USA Gymnastics for the sexual and physical abuse of more than a dozen underage female gymnasts.
Both SCATS and the Olympic Gymnastics Academy are USA Gymnastics member clubs, according to USAG records.
“The safety of our students and confidence of their families is paramount, and again, I take Don’s ban very seriously as it relates to this,” David N. Peters said in an email. “The appropriate steps to comply with it were taken immediately in 2011. Making every conceivable adjustment to disentangle Don from the organization simply and unfortunately proved to be an ongoing process.”
Credit card statements, phone bills, other financial documents and employee notes and memos, however, indicate otherwise.
On Sept. 13, 2012, less than year after his banishment, Peters was back at SCATS and in the following days used a SCATS pickup truck, according to an employee memo. He continued to make appearances at the gym through at least July 8, 2014, according to employee notes.
Peters also continued to use his SCATS credit card freely, continuing a pattern of spending that was routine prior to his ban. Unchecked by a SCATS board dominated by family and friends, Peters regularly charged restaurant and bar bills to the gym, a practice other family members and SCATS employees followed. By 2010, monthly restaurant fees charged to SCATS’ CitiBusiness credit card accounts for Peters and nine other employees routinely surpassed $1,000.
Meanwhile, Don Peters was listed as managing the organization’s Scottrade stocks account on SCATS’ 2013, 2014 and 2015 IRS filings and 2013 and 2015 state filings, all of which were approved by Jean Peters.
Don Peters charged $99 for a financial newsletter on Jan. 31, 2012 to the SCATS credit card in his name, according to billing statements. On Feb. 4, 2012 he charged $695 to the same credit card for The Energy Inner Circle, “a fast-paced service designed to exploit the energy market’s most significant moves before mainstream money does,” according to the service’s website. Two weeks later Peters charged $99 to the credit card for a small stock analysis service.
Peters continued to receive documents from Scottrade on the SCATS account until at least Feb. 24, 2015, according tax documents for the account.
“I do not manage SCATS stock portfolio,” Don Peters said in an email. “That was turned over to David N. Peters years ago. However, as I had originally set up the account my name continued to appear on some account documents. So, at the first opportunity to go to the Scottrade office in (Huntingon Beach) together with Dave (as I live in Pennsylvania now) we went and had my name removed from the account. This was I believe in March of 2015.”
David N. Peters has followed his father’s pattern of charging restaurant bills and other apparent personal purchases to his SCATS credit card.
On March 3, 2012, a $5,000 payment to McKenna Volkswagen/Audi in Norwalk was charged to a SCATS CitiBusiness card under David N. Peters’ name, according to a SCATS credit card statement. Candice Peters has written at least two checks on SCATS’ Bank of America checking account to Audi Financial Services, one for $685.77 on Oct. 4, 2012 and another for $687.37 on Feb. 4, 2013, according to bank statements that include copies of the cancelled checks.
“That’s a huge red flag,” Nichols said.
