I posted this last year, but since we’re talking about it again, I thought it a good time to bring it back up.
A lot of people at the university and in the community knew. Most people haven't heard this but Sandusky was actually close to becoming the UVA head coach in December 2000, a year after he "retired" from PSU. He had a handshake agreement with Terry Holland the then UVA athletic director. Sandusky even went as far as to start putting together a coaching staff. This included Jim Caldwell, who had recently been fired at Wake Forest and who coached with Sandusky at Penn St for a decade.
Well long story short, the deal fell apart and UVA ended up hiring Al Groh from the NY Jets. The reason given for the reversal on Sandusky was that the people at UVA were concerned that he was too focused on his charity and wouldn't be able to handle head coaching duties as well. This is patently false. While I was a student at UVA from 2006-2008, I actually worked in the athletic department doing admin work.
After the Sandusky story broke I called a couple of guys who worked in the department at the time of the 2000 coaching search. They said the charity story was just a cover. What really happened was that Terry Holland received phone calls from two people in state college. One higher up in the university and the other a community leader. They both told Holland to steer clear of Sandusky. They didn't go into detail about sexual abuse, but told Holland that he wouldn't want Sandusky representing UVA because there were a lot of "disturbing" stories about Sandusky. So the notion the Joe Paterno didn't know about the sexual abuse claims is completely ludicrous. A lot if people inside the university and the community knew what was going on.