Banned coach Don Peters kept ties to 2 Orange County gymnastics schools, financial records show

[Gary Roselles]

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, an
Orange County Register investigation has found.

Peters, 67, also is listed as the "sole shareholder" of a second
Orange County 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
Register 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 to the
Register 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 Register’s 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 Olympica Gymnastics Academy
appear to violate USA Gymnastics’ lifetime ban, which was
prompted by a 2011 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 by the Register for comment last week.

“USA Gymnastics has banned Don Peters permanently from
membership,” USA Gymnastics spokesperson Leslie King said in an
email to the Register. “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 Olympica 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 to the
Register. “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 Olympica 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 Register 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.

“A USA Gymnastics’ hearing panel has concluded the investigation
regarding Don Peters and has ruled that Peters will be listed as
‘permanently ineligible’ for membership in USA Gymnastics, and
that Peters' membership in the USA Gymnastics Hall of Fame will
be revoked, along with any rights and privileges connected to
either,” USA Gymnastics said in a statement at the time.

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 Register 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 Olympica 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.

Between Oct. 20 and Dec. 10, 2010, Peters charged $1,306.96 in
restaurant and bar bills to SCATS. The charges included a
$138.98 tab at the Backporch Restaurant in Belle Vernon, Pa.; a
$33.01 bill at the Avalon Grille on Catalina Island; and 13
bills at Mangia Mangia, an Italian restaurant in Huntington
Beach. During that same period, Peters also charged a $65.19
bill from Minney’s Yacht Surplus in Costa Mesa to the SCATS
credit card.

Neither the ban nor the fact that he was living on the other
side of the country and 2,445 miles from SCATS deterred Peters
from continuing to make charges to the SCATS credit card, which
remained in his name. In July 2012, eight months after his
expulsion, Peters charged a $153.69 bill at the Rivers Edge Café
in Confluence, Pa., and $71.40 at Rischitelli Enterprises, a
liquor store in Perryopolis, to the SCATS credit card. Back in
Orange County in December 2012, Peters charged $226.21 at a Home
Depot in Costa Mesa and $102.03 at G&M Oil in Huntington Beach
to the SCATS card. That same month a $233.67 bill from
Caporellas Italian restaurant in Uniontown, Pa. was charged to
Jean Peters’ SCATS credit card.

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. The meals ranged from regular stops at Corner
Bakery, Starbucks and Del Taco to more expensive tastes such as
Sababa, a restaurant in Long Beach, and his father’s old haunt,
Mangia Mangia, according to credit card statements. In one three-
week period $427.23 in restaurant bills was charged to a SCATS
Citibusiness credit card in David N. Peters name.

Food and drink aren’t all the younger Peters charged to SCATS.
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.

Contact the writer: sr...@scng.com

http://www.ocregister.com/articles/peters-740500-scats-
gymnastics.html