The U.S. Center for SafeSport, the U.S. Olympic Committee’s sexual misconduct watchdog, notified U.S. Figure Skating that its lifetime ban of once-celebrated figure skating coach Richard Callaghan was overturned on Monday, a source familiar with the matter told ABC News.

SafeSport had declared Callaghan “permanently ineligible” for membership in August following an 18-month investigation into allegations reported by one of Callaghan’s former students and colleagues, citing “sexual misconduct involving [a] minor,” physical misconduct and emotional misconduct.

But Callaghan, who has repeatedly denied any misconduct, appealed that decision to an arbitrator, who modified the sanctions after a private hearing earlier this month, reducing the penalties to a three-year suspension, 15-year probation and 100 hours of community service.

Craig Maurizi, the former skater turned Olympic coach who first reported the allegations to SafeSport, declined to comment, but his attorney Ilene Jaroslaw of the New York-based firm Phillips Nizer LLP said the decision calls the credibility of the U.S. Center for SafeSport, which has exclusive jurisdiction over allegations of sexual misconduct reported to national sports governing bodies, into question.

“It’s horrifying that, in 2019, Richard Callaghan’s serial child abuse of young skaters is not considered serious enough to warrant a lifetime exclusion from teaching youngsters how to skate,” Jaroslaw told ABC News. “This is another instance that leads us to question the competence of the U.S. Center for SafeSport to deal with these issues.”

Dean Groulx, a Michigan-based attorney representing Callaghan, sent a brief statement to ABC News but declined further comment.

“Richard Callaghan and his family are relieved that this matter has been finally put to rest – once and for all,” Groulx said. “We will have no further comment.”

Dan Hill, a spokesperson for the U.S. Center for SafeSport, said the watchdog group stands by the conclusions of its investigation – which determined Callaghan had committed a trio of “violations” – but respects the outcome of the arbitration.

“When it’s an older case, the Center has to use whatever rules and laws existed at the time, which has been successful in a number of instances,” Hill told ABC News. “But we do have a fair process that allows respondents to appeal through arbitration, and that happened here.”

U.S. Figure Skating, the sport's national governing body, meanwhile, issued a brief statement acknowledging the decision and referring further questions to SafeSport.

“U.S. Figure Skating received a notice of decision regarding Richard Callaghan from the U.S. Center for SafeSport and will enforce it accordingly,” the statement reads. “As the Center has exclusive jurisdiction of this matter, all questions should be directed to the U.S. Center for SafeSport. U.S. Figure Skating encourages anyone who has been abused or suspects abuse to report it to local law enforcement, the U.S. Center for SafeSport or U.S. Figure Skating.”

The ruling is the latest twist in a case with a long, fraught history. In 1999, Maurizi accused Callaghan of sexually abusing him when he was a young skater from about 1977 to 1986. He filed a grievance with U.S. Figure Skating that included accounts from several other people who either allegedly experienced or witnessed sexual misconduct by Callaghan.

The federation quickly dismissed that grievance without full consideration, however, because skating bylaws at the time stipulated that alleged misconduct must be reported within 60 days, permitting Callaghan — one of the world’s top coaches at the time — to continue coaching for nearly two decades without any further investigation into those claims.

That decision allowed Callaghan’s alleged abuse of Adam Schmidt, another former skater who trained under Callaghan, to “continue unabated,” according to a lawsuit Schmidt filed against Callaghan, U.S. Figure Skating and others in San Diego Superior Court in August.

Schmidt has alleged that he suffered “numerous sexual assaults” by Callaghan while he was a teenager from about 1999 to 2001. Both Callaghan and U.S. Figure Skating have denied any wrongdoing. Schmidt’s attorney John Manly, who also represents more than a hundred gymnasts who were abused by disgraced USA Gymnastics team doctor Larry Nassar, blasted the ruling as “nauseating” and called the U.S. Center for SafeSport “a complete sham.”

“This is a system designed to protect the U.S. Olympic Committee and the national governing bodies and to give them public relations cover,” Manly told ABC News. “It has nothing to do with athlete safety.”

With the arbitrator’s ruling, a source told ABC News, the U.S. Center for SafeSport has made its final decision on the matter, and according to Hill, the SafeSport spokesperson, the watchdog group does not plan to share any further details about the decision with the public.

The U.S. Center for SafeSport could open a new case in light of new information, Hill said, but that appears unlikely to come from athletes represented by Manly.

“This is why,” Manly said of SafeSport investigations, “we don’t allow our clients to participate in these.”