Michigan State University has stopped making payments out of its Healing Assistance Fund set up for the victims of 54-year-old Larry Nassar, a former MSU and USA Gymnastics physician.
The concerns grew after the fund administrator, Commonwealth Mediation and Conciliation Inc., brought “possible fraudulent claims” to the notice of the university and sought direction in $10 million healing fund which was set up in December 2017.
The funds were made available to MSU health clinic patients and student-athletes whom Nassar abused, as well as the parents of these victims.
MSU spokeswoman Emily Guerrant was quoted by The Lansing State Journal on Thursday, July 26, that stopping payments will allow an investigation into the issue. She further said that as of June 30, the fund had distributed more than $1.1 million.
The funds were set up to reimburse the victims and their parents for their expenses related to counseling and mental health services.
Last week, the university found it difficult to pay the settlement amount and filed a lawsuit against all its insurance carriers regarding the policies and coverage for sexual assault claims and alleged insurance companies of “failing to honor their policies.”
The university had in May agreed to settle the lawsuit by paying $500 million to 332 victims of sexual abuse by Nassar, who was sentenced to 40-175 years in prison after he was found guilty of three child pornography and 10 sexual assault charges. He is serving his sentence at the United States Penitentiary in Tuscon, Arizona.