By Nick Butler

Ary S Graça has consistently denied all allegation concerning his time at the Brazilian Volleyball Confederation ©Getty ImagesInternational Volleyball Federation (FIVB) President Ary S Graça has strongly denied allegations that he illegally channeled funds to family and friends between 2010 and 2013 while he was head of the Brazilian Volleyball Confederation (CBV).

Graça, who served as CBV head from 1997 to 2012 before stepping down to assume the FIVB Presidency, is accused, along with other directors, in a Government investigation of involvement in the funneling of BRL30 million (£7 million/$11 million/€9 million).

In a 50-page report by a Federal Anti-Corruption Agency, it is alleged that sponsorship funds were not distributed to athletes as promised, while administration costs rose sharply and money was paid to various companies owned by directors, former directors and relatives.

The CBV has promised further enquires, and has said it will not hold a FIBV-sponsored Olympic test event in Rio next July, as scheduled, in what would be a huge blow for Rio 2016 preparations.

Graça has claimed he always "acted in the best interests of Brazilian volleyball".

In a statement sent to insidethegames today, the FIVB admitted it was "fully aware of the allegations against the former President and management of the Braziian Volleyball Confederation.

The statement added: "It is important to point out that Ary Graca, and others accused, have rigorously and consistently denied any wrongdoing and have openly explained how, at all times, they acted in the best interests of Brazilian Volleyball."

The scandal is threatening to detract from the success of Brazilian teams as they prepare for Rio 2016 ©Getty ImagesThe scandal is threatening to detract from the success of Brazilian teams as they prepare for Rio 2016 ©Getty Images

It cited a recent external auditing conducted by porfessional services company PricewaterhouseCoopers, and supported by independent legal experts, which claimed it had found "no evidence" of any malpractice.

But, whatever the eventual findings and repercussions on the Olympics, the allegations are a bitter blow for the sport in Brazil two years out from the Games, particularly considering the sport is the second most popular in the host nation behind football.

With Brazil having won 20 Olympic medals in volleyball making it the second most successful nation in the sport's history behind the Soviet Union, it is also one of the country's best hopes for a medal.

In a strongly worded message on Facebook, Brazilian captain Fabiana Claudino expressed her hope the allegations are evaluated with "the seriousness and severity that a subject like this deserves to be treated".

She wrote: "People who are part of a Confederation should be fighting with us for the good and for the evolution of the sport, instead of using devices to enrich [themselves] illegally on top of our daily struggle to win. 

"This act seems to me, at least, a great disrespect."

Fabiana Claudino has called for a full investigation to get to the bottom of the allegations ©Getty ImagesFabiana Claudino has called for a full investigation to get to the bottom of the allegations ©Getty Images

The scandal is also another blow for the sport after a year which, along with two World Championships hailed as the "most successful" in history, has seen the FIVB face criticism over its handling of Ghoncheh Ghavami, the woman jailed for watching a World League match in Iran before being released on bail last month.

A second corruption allegation also emerged in recent weeks involving organisers of the Men's World Championships in Poland, with Polish Volleyball Federation President Miroslaw Przedpelski arrested for allegedly accepting bribes from a company involved in the event. 

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