Michigan State halts assistance payments to Nassar victims to investigate possible fraud

Citing possible fraud, Michigan State University has stopped making payments from a fund established to financially s...

Posted: Jul 29, 2018 1:02 AM
Updated: Jul 29, 2018 1:02 AM

Citing possible fraud, Michigan State University has stopped making payments from a fund established to financially support counseling for victims of convicted sexual abuser Larry Nassar.

The website for the $10 million Healing Assistance Fund now states that "due to an investigation into fraudulent claims made to the Healing Assistance Fund, the university is suspending payments until the investigation is complete."

The fund was set up by MSU's board of trustees in December 2017 as an initial response to the testimony of hundreds of former gymnasts who said they were abused by Nassar. Its $10 million is separate from the $500 million in damages the university agreed to pay this spring.

The nature and scope of the potentially fraudulent activity and the investigation has not been made public.

In a statement emailed to CNN, MSU said, "It was brought to our attention earlier this week by the firm that manages the Healing Assistance Fund that there are possible fraudulent claims being made." MSU said it does not have specific details of the investigation. The Boston-based firm Commonwealth Mediation and Conciliation Inc., which is managing the fund, did not immediately respond to CNN's request for comment.

More than $1.15 million had been paid out to victims from the fund as of June 30, MSU told CNN in a statement, and "until the investigation is complete, the fund will not be providing reimbursement for expenses."

Attorney John Manly, who represents 180 women who allege they were sexually abused by Nassar, said he has clients with "some very serious psychological issues" as a result of their abuse.

"When you say, 'We are going to pay your bills,' the victims are entitled to rely on that. They are on medication and receiving therapy two to three times a week, all paid for by the fund," he said. Manly added, if there is fraud "they should call the police" and "root it out but not punish the victims."

Nassar will effectively spend the rest of his life in prison.

He is currently serving a 60-year sentence in in a federal prison on child pornography charges. He is then scheduled to serve between 40 and 1275 years in a Michigan state prison for seven counts of first degree criminal sexual misconduct in Ingham County and between 40 and 125 years for sexual abuse in Eaton County. Nassar filed a motion Tuesday asking to be resentenced on the grounds that Judge Rosemarie Aquilina of the Ingham County Circuit Court was biased during the sentencing hearing.

The Michigan attorney general's office is currently reviewing the filing.

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