Penny left USA Cycling in 1996, returning to his hometown of Seattle to become vice president of Bob Walsh Enterprises, focused on business development in conjunction with sports marketing, events, media and consulting.

[3] Penny joined USA Gymnastics in March 1999 as the senior vice president, overseeing a variety of areas focused on business development.

Within a few years, his responsibilities grew to oversee the marketing, sponsorship, event operations, television and communications, including the management of the 2003 World Artistic Gymnastics Championships in Anaheim, California.

During Penny's tenure, USAG leaders routinely dismissed complaints and warnings that employees and USAG-affiliated coaches were sexually abusing gymnasts in their programs.

[11] More than 500 athletes alleged that they were sexually assaulted "by gym owners, coaches, and staff working for gymnastics programs across the country", including USAG and Michigan State University (MSU).

[18] On October 17, 2018, the United States Marshals Smoky Mountains Fugitive Task Force arrested Penny on charges of tampering with evidence during the investigation of sexual assaults against Larry Nassar.

"[20] The day after his arrest, USAG placed Penny on its "permanently ineligible" list of members "per the provisions in SafeSport Code for the U.S. Olympic and Paralympic Movement, III.A.4, and USA Gymnastics Bylaw 10.14(b).