Cheer groups move to dismiss abuse case, racketeering claims

Dec 19, 2022, 10:12 PM | Updated: Dec 20, 2022, 12:18 pm

COLUMBIA, S.C. (AP) — A series of lawsuits beginning in South Carolina have detailed the alleged sexual abuse of at least 20 cheerleaders across six states. The anonymous plaintiffs have accused coaches, choreographers and others of illicit drug provision, child pornography solicitation and rape.

The cases have spotlighted sexual abuse within cheerleading. The concerns have only grown since a prominent coach who starred on a popular Netflix show was arrested in 2020 on child pornography charges.

But the lawsuits don’t stop there. Lawyers are also pursuing the same organized crime charges recently brought against high-profile sex abuse defendants like Harvey Weinstein and the Catholic Church.

Alongside the alleged violations of the Protecting Young Victims from Sexual Abuse and Safe Sport Authorization Act have been claims that the growing sport’s leading governing and commercial bodies and the investors backing them violated federal racketeering laws. Now, the man credited with transforming modern cheerleading, the sport’s top corporations, the co-owner of a successful local gym and two private equity firms are moving to dismiss the first case in Greenville, South Carolina.

Congress passed the Racketeer Influenced and Corrupt Organizations Act of 1970, also known as RICO, to help combat organized crime. The law carries stiff penalties. In addition to a maximum prison sentence of 20 years, a conviction can bring a payout totaling triple the damages suffered by the plaintiff.

The plaintiff must show that they suffered injuries to their business resulting from the enterprise’s violation of any number of enumerated RICO crimes. The crimes must have been committed at least twice to establish a pattern and for similar purposes.

In the South Carolina case, the plaintiffs name an “association-in-fact enterprise” consisting of the defendants: Varsity Brands, the leading uniform retailer, which faces a separate anti-trust lawsuit alleging illegal monopolization; Varsity Spirit, a subsidiary that is the dominant provider of competitions and camps; U.S. All Star Federation and USA Cheer, nonprofits created with interest-free loans from Varsity to govern the sport; Jeff Webb, the founder and former owner of Varsity Brands; Rockstar Cheer, a South Carolina gym where coaches allegedly abused athletes; Scott and Kathy Foster, the married duo who owned Rockstar Cheer until Kathy closed the gym after Scott’s recent suicide amid a reported investigation into abuse; Charlesbank, which led an investment group that bought Varsity Brands in 2014; and Bain Capital, which took ownership in 2018.

The crimes of mail and wire fraud were committed through false online messaging, according to the lawsuit. For example, the U.S. All Star Federation allegedly purported on its website to require background checks of all coaches while only implementing them for entry into warm-up rooms at competitions and not for adults coaching children.

The defendants allegedly enticed the plaintiffs to continue cheering competitively “to obtain social media fame which they could monetize” through scholarships and eventual gym ownership, according to a complaint. But the abuse is alleged to have “prevented the realization of these financial and business opportunities.”

The defendants shared “the common purpose of recklessly, intentionally, and willfully endangering the Plaintiffs as minor athletes by exposing them to illegal sexual abuse and exploitation of children while assuring parents they were particularly safe in order to take their money,” lawyers with the Strom Law Firm wrote.

In motions filed by the Dec. 19 deadline, defendants asked the judge to dismiss the case. They say the evidence, or lack thereof, doesn’t pass muster.

In a motion to dismiss, lawyers for Varsity Spirit said the arguments around racketeering and other counts amount to “spurious claims” that fail to meet the legal basis necessary for the lawsuit to proceed. For example, the lawyers argued that financial losses stemming from personal injuries do not count as the business damages required by RICO. The lawyers added that alleged misstatements about athlete protection attributed to Varsity Spirit are just descriptions of its policies — not evidence of any fraud.

The lawyers said the complaint fails to show that the alleged enterprising groups entered into any “conspiratorial agreement” or coordination. They said that the presence of Varsity Spirit representatives on the governing bodies’ boards does not prove that the U.S. All Star Federation or USA Cheer served as a “legal alter ego” controlled by Varsity Spirit.

“The first part of the case involves serious and particularized allegations of sexual abuse and misconduct perpetrated by individual coaches and trainers,” the lawyers wrote. “The second part of the case invokes racketeering and conspiracy theories, embellished by sweeping conclusory allegations and impermissible group pleading devices, to reach parties with no involvement in the underlying abuse.”

Meanwhile, lawyers for Webb said the Varsity Brands founder should be dismissed from the case because he committed no illegal actions and had zero relevant business proceedings in South Carolina. They emphasized Webb had no involvement with allegations of abusive conduct or control over the alleged perpetrators.

Similarly, lawyers for Charlesbank and Bain Capital argued separately that the court lacks jurisdiction and that the RICO claims fail. The U.S. All Star Federation and USA Cheer received extensions to file their motions.

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Cheer groups move to dismiss abuse case, racketeering claims