Thursday, October 23, 2014

STEVEN INGERSOLL'S MULTI-MILLION DOLLAR GRAND TRAVERSE ACADEMY DEBT DROVE HIS BANK FRAUD! Government Alleges Repayment Of Whopping Advances Was Main Driver Of Bank Fraud, Tax Evasion; Ingersoll Used Most of Diverted Money ($704,000) To Repay Grand Traverse Academy. Clawback?

BREAKING NEWS! Government filing reveals Steve Ingersoll used $704,000 from a Chemical Bank loan to repay part of his debt to the Grand Traverse Academy!

Clawback coming?


According to the government, the federal fraud case against Steven Ingersoll began in 2009 when Ingersoll "caused another charter school that he owned or controlledthe Grand Traverse Academyto advance him funds that need to be repaid."
A stinging 26-page decision filed late yesterday in Ingersoll's fraud case revealed that "Counts 6 and 7 of the Superseding Indictment relate specifically to those advances" and Ingersoll's personal income tax treatment of those Grand Traverse Academy-related transactions in 2009 and 2010.

And the document revealed the shocking allegation behind Ingersoll's indictment (shocking to everyone except Miss Fortune, who nailed it mere hours after the indictment was unsealed on April 10): once Ingersoll fell too far into debt—at one time owing three to four million dollars to the Grand Traverse Academy—it became necessary for him to repay the indebtedness in "another way". 

And that "way"? Count 1 in the federal fraud indictment alleges that Ingersoll used the bulk of the $934,000 in diverted bank construction loan proceeds to "reduce his indebtedness to the Grand Traverse Academy".

And one more thing—while the government had previously stated its position that "Steven Ingersoll misused his authority to improperly advance himself funds from the Academy", yesterday's filing revealed the government considered the Grand Traverse Academy's practice of reflecting those advances in fiscal audits as "accounts receivable" as "prohibited by law".



WILL "BEN LAUGHIN" BE POSTING...DAILY? Passive-Agressive Poster Continues Covert, Cowardly Attacks Against Miss Fortune

It looks like someone has finally freed up some "bandwidth"— and he's using the witless pseudonym "Ben Laughin".

"Ben" wants to remind you that in late June, Miss Fortune's real identity was revealed through a systematic series of cyberbullying incidents, designed to intimidate Miss Fortune.

The online campaign was capped with a threatening letter, handwritten and hand-delivered to my former Novi townhouse. The matter is under police investigation.

Of course, I revealed all in two posts that appeared on this blog in early August.

Something tells me "Ben" might not be laughing when a police investigator comes knocking...or will he just keep dealing with his passive-aggressiveness with these lily-livered, chicken-hearted tactics?

Come to think of it, they have a lot in common with pathological narcissism: the destructive envy, the recurrent attempts to buttress grandiose fantasies of omnipotence and omniscience, the lack of impulse control, the deficient ability to empathize, and the sense of entitlement, often incommensurate with its real-life achievements. 

Damn, it's the coattail effect!

Tuesday, October 21, 2014


When Teapublican Dan Benishek (R-Crystal Falls) announced in May that he encouraged "growth of charter schools in Northern Michigan", the press release mysteriously left out the area's most notorious charter school hustler, Steven Ingersoll.

And why not? As Miss Fortune revealed yesterday, the federally-indicted Ingersoll is a longtime member of "Team Benishek" and has contributed $4,500 to Benishek's congressional campaigns since 2011including a $250 donation on June 30!

Come on, is anyone really surprised that pimps and whores hang out together?

I'm not, although it may be because I fondly remember New York's Times Square when it was soiled, seedy and fragrant with weed.

In politics, money talks. 

In this case, it might also clink when it walks.


Monday, October 20, 2014

ELECTILE DYSFUNCTION: When Glasser Choice Theory Collides With The Id of Ingersoll, What's Left Standing (Straight Up)?

While Steve Ingersoll owes nearly $180,000 in Bay City property taxes (and at least $1.6 million to the Grand Traverse Academy) it hasn't stopped him and wife Deborah from contributing thousands of dollars to Republican political efforts—including a donation to Dan Benishek's 2014 reelection campaign less than three months ago.

The 1998 book, Choice Theory: A New Psychology of Personal Freedom, is the primary text for all that is taught by The William Glasser Institute. Glasser was an American psychiatrist who developed "choice theory" (formerly called "control theory") and "reality therapy".

Choice theory states that:
-all we do is behave,

-that almost all behavior is chosen, and
-that we are driven by our genes to satisfy five basic needs: survival, love and belonging, power, freedom and fun.

In 2005, the Grand Traverse Academy was declared a "Glasser Quality School", one of only 15 in the nation at the time. The criteria include relationships based upon trust and respect, students doing work that is significantly beyond competence each year and staff, students and parents viewing the school as a joyful place.


One of Glasser's early methods of choice theory intervention involved confronting clients to accept responsibility for their behavior. 

Miss Fortune has taken Glasser a leap forward, including a strong id among the "all we do is behave" touchy-feely, EST nonsense and developed a new alternative—"accept reality therapy". 

If there is no punishment, then there is no reason to accept excuses. And with no punishment, then there's no disillusionment, stagnation, frustration and apathy. 

The id rules, so let it loose, free to run around the room!


A review of Federal Election Commission individual contribution records reveals that Deborah and Steven Ingersoll really loved them some would-be Senator Pete Hoekstra!

In 2012, the Ingersolls collectively contributed $10,500 to Hoekstra's primary and general election senatorial campaigns, with Deborah kicking in $5,000 and Steven adding $5,500.

Steve Ingersoll's support of the Republican party extends back to 2007, with substantial donations to both the Michigan Republican Party and the Republican National Committee in 2008.

Since 2011, Steve Ingersoll has contributed $4,500 to the primary and general election campaigns of Dan Benishek.

And, with Ingersoll's December 2 federal fraud trial looming, you'd think his mind would be focused on his defense.

Maybe it is, but Ingersoll managed to loot his couch cushions, finding enough scratch to donate $250 to Dan Benishek's primary campaign on June 30.

My newly-minted "accept reality therapy" dictates that all we do is behave badly—but, unlike Glasser, I'm still betting on crime and punishment.

Thursday, October 16, 2014

THE REAL TRUTH--HIDING IN PLAIN SIGHT: Donation/Pledge Story Was A Lie; Miss Fortune Uncovers The Cover-Up! Early Warning?: Grand Traverse Academy 2011 Audit Revealed $2.5 Million Receivable From "Related Party"; Feds Say "Party" Was Steven Ingersoll!


Miss Fortune investigates the Academy's missing millions, and discovers a complicit Board and a shocking cover-up!

In the end, it was all right there in black and white...you just had to know where to look. 

Beginning in 2010, audits for the Grand Traverse Academy showed the charter school carrying seven-figure receivables, some classified as coming from "related parties". 

And it appears that party was Steven Ingersoll.


After spending months spinning like Sufis, the Grand Traverse Academy's Board finally heard the other shoe drop yesterday.

And in reality, following the missing millions trail was as easy as 1-2-3.

According to a court document filed October 14 in Steven Ingersoll's federal fraud case, the government alleges that Ingersoll began helping himself to the Academy's money sometime in 2009. The missing Grand Traverse Academy millions traveled during 2009-2011 from the Academy's bank account to Ingersoll's Smart Schools Management. 

Making a short stop at Ingersoll's pass-through corporation, Smart Schools, Inc., the money ultimately reached Steven Ingersoll's personal bank accounts.

After discovering Ingersoll's theft, it appears the Grand Traverse Academy Board may have attempted to stave off any meaningful public disclosure of the loss, but time ran out. The government alleges Ingersoll took an estimated $3.5 million over the time period at issue, and the Academy's 2012 fiscal audit appears to confirm that, revealing an outstanding $3,548,319 "accounts receivable from related parties" in that year's audit (below)...but there's much more.

In its 2010 audit, the Grand Traverse Academy revealed in Note 4 it was owed $2,715,251, which was classified as "amounts receivable from sources other than governmental units". 

There is no description of the source of that receivable, and with the lack of data there's no way to definitively attribute that amount to Ingersoll.

However, by the next fiscal year, the Grand Traverse Academy revealed in Note 4 (below) of its fiscal 2011 audit that it was owed a whopping  $2,500,000 from "related parties", the first use of that classification.

It appears the amount, which ballooned to well over $3.5 million by the 2012 audit, is likely attributable to Steven Ingersoll.

In its 2013 audit, the Grand Traverse Academy utilized an agile bit of financial alchemy, transforming its multi-million dollar Ingersoll-generated "receivable" (an uncollectible bad debt) into a "prepaid expense"—camouflaging Ingersoll's misappropriation with the guise of an asset. Amounts due from Smart Schools Management, Inc. were shown in 2012 as "accounts receivable" and included as "unassigned fund balance". That balance ($2.38 million) was reclassified in 2013 as "prepaid expenditures". The audit does not explain the status of the remaining $1.2 million dollars—if it was repaid by Ingersoll, or was owed to the Academy by someone else.

A Traverse City Record-Eagle report, published nearly two weeks after this blog broke the $2.38 million dollar overpayment story, revealed that Academy officials claimed they severed ties with Ingersoll at his suggestion to prevent his pending case from casting a shadow over the school.

Mark Noss was quoted in that article saying he "knew nothing of the transactions that placed Ingersoll on federal prosecutors’ radar". And Kaye Mentley (displaying the peculiar sense of humor of one who'd testified to a grand jury and escaped without an indictment) said she was "not concerned" about the $1.6 million owed by Ingersoll and Smart Schools.

Knowing what she knew, Mentley must have laughed all the way back to her horse barn!

Yes, Noss actually said he knew nothing of the transactions that placed Ingersoll on federal prosecutors’ radar, even though he'd known him for over 30 years, been his business partner for nearly that longand sat on the Academy's Board while millions leaked from its bank accounts into Ingersoll's.

“I’m surprised by the indictment because I only know Steve Ingersoll as a professional colleague,” Noss said. “I’ve only known Dr. Ingersoll to be of high character.”

The Record-Eagle story, quoting the 2013 audit report, stated that “Smart Schools Management, Inc.’s ability to prepay their fee and withhold payment of overpaid fees enables Smart Schools Management, Inc. to abuse their access to public funds.”

Noss said he did not see a problem with the practice, which had been going on for years without being flagged by an auditor.

“Smart Schools Management took their management fee that was budgeted for that fiscal year,” Noss said. The fee was adjusted down at the end of the year, and the remaining amount was owed to the schools.

“There was never an advancement or more money provided to Smart Schools that they weren’t entitled to,” Noss said.

Well, it looks like I was right...all along!

Wednesday, October 15, 2014

IS STEVEN INGERSOLL THE GRAND TRAVERSE ACADEMY'S SIX MILLION DOLLAR MAN? Federal Court Document Offers New Fraud Details; Explosive Revelations Undercut Academy Board's Bogus Claim Of Ingersoll's "Pledge Donations"; How Many More Millions Are Missing?

A court brief filed late yesterday in US District Court by Assistant U. S. Attorney Janet Parker in the Ingersoll fraud and tax evasion case includes a bombshell allegation—cash advances Steven Ingersoll made from the Grand Traverse Academy's publicly-funded coffers exceeded $3.5 million dollars.

And the feds didn't call that money a pledge or a donation!

The motion was filed by the government in response to questions asked by Judge Thomas L. Ludington during an October 8 motion hearing.

During the hearing, Judge Ludington asked whether the school board for the Grand Traverse Academy "was aware of the advances that Steven Ingersoll had made to himself from funds belonging to the school." 

While Ingersoll's attorney could only weakly point "out that the Grand Traverse Academy was audited annually", the government attorney responded by revealing that Note 4 (above) to the Grand Traverse Academy's publicly available audit report for the fiscal year ending on June 30, 2012 contains an entry that states, “Amounts receivable from related parties $3,548,319.” 

The government contends that the “related party” is Steven Ingersoll. 


On April 10 Ingersoll, his wife Deborah M. Ingersoll, his brother Gayle R. Ingersoll, Roy C. Bradley Sr. and his wife Tammy S. Bradley were each charged with conspiracy to commit bank fraud. Steve Ingersoll, Roy Bradley and Gayle Ingersoll were also charged with conspiracy to evade federal income tax laws. (The bank conspiracy charge alone carries a maximum penalty of 30 years in prison.) 

The indictment, unsealed April 11 in U. S. District Court in Bay City, alleged that Ingersoll, and the four others named, diverted about $934,000 from a school construction project, converting it into personal income for Steven and Deborah Ingersoll.

Steven Ingersoll allegedly used part of the construction loan proceeds, backed by the U. S. Department of Agriculture and diverted to his joint, personal Fifth-Third Bank account, to "reduce his indebtedness to his Traverse City charter school, the Grand Traverse Academy".

Those thirteen words were the impetus for my investigation, which revealed early details of Ingersoll's overpayments and the Academy Board's apparent cover-up. 


So how did the millions get from the Grand Traverse Academy to Steven Ingersoll?  And did he pay taxes on that money?

In its brief, the government revealed that "a significant part of the money at issue from Smart Schools Management reached Steven Ingersoll via Smart Schools, Inc., a Chapter S corporation." The books and records of the Grand Traverse Academy, Smart Schools Management and Smart Schools, Inc., were controlled by Ingersoll during the relevant time period, making the financial shell game that ensued a breeze.  (See timeline below)

Ingersoll formed Smart Schools, Inc. on October 9, 1996. 

According to IRS guidelines, "S corporations" are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income. 

Judge Ludington asked about the "tax treatment" of the transactions at issue alleged to have occurred "between the Grand Traverse Academy and Smart Schools Management", referring to the $3.5 million the government alleges Ingersoll siphoned from the Academy's bank accounts.

The government indicated it does "not have any Forms 990 filed with the IRS for the Grand Traverse Academy for the years at issue, 2009, 2010 and 2011." In addition, the filing revealed that "a publicly-available database that should reflect the submission of Forms 990 by Steven Ingersoll on behalf of the Grand Traverse Academy apparently does not report the submission of such forms for the relevant years."

The court also asked about the tax treatment of the transactions alleged to have occurred between Smart Schools Management and Steven Ingersoll. For the 2009 and 2010 tax years, the government "submits that the Forms 1120 filed by Steven Ingersoll with the IRS on behalf of Smart Schools Management do not reflect the payments at issue." The government indicated that it "does not have a copy of a Form 1120 filed with the IRS by Smart Schools Management for 2011, and it appears that no Form 1120 for 2011 was filed with the IRS for Smart Schools Management by Steven Ingersoll."

Although people claim that tax law is way too complex, there's one statute that's real simple: you have to pay your taxes.

It appears that Steven Ingersoll did not.


Finally, during the discussion of Ingersoll's motion for a "bill of particulars", his attorney said that the amount of the taxes evaded, and the government’s theory used in computing that alleged underpayment of tax, was a proper subject for a bill of particulars because the amount related to sentencing.

The government replied, stating "there is a rather indirect relationship between the amount of unreported income and tax evaded, and the sentencing guidelines calculations that will apply upon conviction to Steven Ingersoll."

In addition, the government revealed that the unreported income for all of the years at issue will be multiplied by a factor of either 28% or 34%. Penalties and interest would be added to the tax loss upon conviction.

Based on the government's back-of-the-envelope calculation, Ingersoll could end up owing $2.5 million dollars.


Facing a December 2 trial date (that just got a helluva lot more interesting!), the Grand Traverse Academy's "six million dollar man" Steve Ingersoll is starting to look more like my prescient
April 22 description: a rotting albatross around the Academy's neck.

Having allegedly swept up over $3.5 million dollars from the Academy's bank accounts, and facing a potential tax debt of $2.5 million dollars, Mr. Six Million's future's not looking so bright.

And I'm wondering how Ingersoll's good buddy, Count deMoney himself Mark Noss (the Chang to Ingersoll's Eng), is resting most nights.

Hey, anyone want to try and convince me that money's a "donation pledge"?

I didn't think so.

See you all in court, bitches!

Monday, October 13, 2014

IS IT CREATIVE ACCOUNTING...Or Simply More 'Fudge' Than Mackinac Island? Miss Fortune Detects The Deception Behind The Campaign To Convince You That $1.6 Million Dollars Isn't Really Missing!


All drama is about lies. All drama is about something that’s hidden. A drama starts because a situation becomes imbalanced by a lie. The lie may be something we tell each other or something we think about ourselves, but the lie imbalances a situation. If you’re cheating on your wife the repression of that puts things out of balance; or if you’re someone you think you’re not, and you think you should be further ahead in your job, that neurotic vision takes over your life and you’re plagued by it until you’re cleansed. At the end of a play the lie is revealed. The better the play the more surprising and inevitable the lie is. Aristotle told us this.” 

It's not every day I begin a story with a quote from David Mamet, my favorite playwright—especially one about lies.

As readers of this blog know by now, I've been vocal about the significant conflict of interest and potential accounting fraud at the Grand Traverse Academy.

But with the release last week of the Academy's September 12 Board meeting minutes, it appears that even a bankrupt CPA could see right through attorney Kerry Morgan's dishonest assertion that Smart Schools Management's pattern of ending a fiscal year with a "prepaid expense" balance was merely a way to record federally-indicted Steven Ingersoll's "pledge" to contribute about "5 million to GTA over time."

Wait a minute! It looks like Morgan admitted the Academy committed false accounting fraud!

Somebody thinks you're stupid.


The formal pivot away from acknowledging the $1.7 million owed to the Academy by Ingersoll's Smart Schools was the direct result of its 2013 fiscal year $2.38 million dollar fee "overpayment" began at the charter school's July 18 Board meeting.

Brad Habermehl, Flint-area resident and Board president, read this prepared statement:

If not for the efforts and intellectual contributions of Dr. Steven Ingersoll and Kaye Mentley and Smart Schools’ willingness to rebate its earnings, GTA would not likely exist today.

Over the years GTA needed substantial financial support and Smart Schools always supplied what the Academy needed.

Analysis of GTA’s audited financial statements and board minutes from June, 2004 through March, 2014 shows that Smart Schools gave GTA $3.3 million from its budgeted and contractually authorized earnings. Additionally, Smart Schools planned to rebate another $1.6 million from its future earnings which is classified on GTA’s books as a non-spendable asset.

Smart Schools founded and funded GTA from its origin. GTA flourished in large part because Smart Schools was willing to rebate its contract and budget authorized earnings during GTA’s lean years of infancy, expansion and State funding reductions. 

With Smart Schools no longer associated with GTA the board will now go into closed session to consider proper disposition of the $1.6 million non-spendable asset.

During that meeting, Habermehl offered no proof that backed up his assertionsbecause there really isn't any.

Even the Board's five-page follow up attempt"History of Grand Traverse Academy", published on September 14provides no financial reports that support the assertions. 

Habermehl should have just asked, "Do you honestly think we wouldn't let a harmless white collar crime like this escape the wheels of justice?"

Somebody thinks you're stupid.


The standard framework of accounting principles, standards and procedures that companies use to compile their financial statements includes 'prepaid expenses'. Prepaid expenses and deferred charges appear on a company’s balance sheet as 'other assets'.

Both apply to a situation where a company pays in advance for a good or service. Generally accepted accounting principles (GAAP) dictate that expenses that are paid before they're due belong on the balance sheet. Whenever a company pays expenses in the current period that won't be matched with services until subsequent periods, the expense is a "prepaid expense" or "deferred charge".

Somebody thinks you're stupid.


As the 2001-2013 financial snapshot shows (left), the Grand Traverse Academy had a long history of ending its fiscal years with a "prepaid expense" balance.

Beginning in fiscal year 2005 (ending June 30), the Academy's annual audits began to show a pattern of ending each year with prepaid expense balances ranging from $25,882, and topping out in 2013 at $2.38 million. 

There was never a mention in any report that claimed the "prepaid expense" balance was really a "donation pledge" made by Steven Ingersoll's Smart Schools Management.

While the early audits may have been performed by a more compliant, less rigorous CPA firm, the Academy's 2013 audit drew much closer scrutiny of its "prepaid expense" balance by Traverse City public accounting firm Dennis, Gartland & Niergarth.

In the auditor’s report, Smart Schools Management actually agreed that it “owed Grand Traverse Academy an amount classified as a prepaid balance” ($2,338,980), and worked out a repayment plan with the Academy. The plan called for Smart Schools to "work off the prepayment" by “partially reducing cash transfers for future management fees through June 2016”.

You may want to read that again, especially the part that called for Smart Schools to "work off the prepayment", before you read the comments attributed to attorney Kerry Morgan in the Academy's official September 12 Board meeting minutes.

Here they are:

First, Mr. Morgan addressed the past relationship with Smart Schools Management (SSM). He observed that SSM had a written contract with Grand Traverse Academy (GTA). The parties agreed that SSM would contribute about 5 million to GTA over time. GTA carried this pledge upon its books as a “prepaid” amount. Annual certified public audits found this characterization acceptable since the continued relationship with Dr. Ingersoll and SSM warranted the expectation of GTA’s eventual receipt of these funds. 

Due to the federal indictment of Dr. Ingersoll, however, GTA terminated its contractual relationship with SSM in March of 2014, having received only about $3.4 million of that amount leaving $1.6 million not received by GTA. 

It is anticipated that the next audited statement of GTA will modify the accounting treatment of these funds, since receipt thereof was rendered uncertain by the abrupt termination of GTA’s management relationship with SSM.

So, did Morgan inadvertently make a false representation (insert your own euphemism for lying here) with absolutely no proof, or were his assertions correct?
Somebody thinks you're stupid.


The Academy's 2013 audit confirmed Smart Schools' years-long pattern of advancing payment to itself for management fees and other expenses, calling the resulting year-end balance a “prepaid expense”.

However, in an interview that aired last month on Interlochen Public Radio, Mark Noss said prepaid expense was a “terrible description of what that money is.” 

Noss is the former Board president who signed a two-year management contract while a board member, remaining on the board for weeks after and even making a motion to add an agenda item directly relating to his contract during the April 11 meeting! But this serious conflict-of-interest is only part of the continuing pattern of fraud, deception and financial monkey business by Noss and his Full Spectrum Management, LLC.

In the IPR interview, Noss continued unchallenged, swinging through his financial jungle and claiming "the reason Ingersoll’s company owed the charter school money was not because the school paid for services it never received."

What!? So why the "repayment plan" then, Mark? When is there ever a repayment for a pledged donation?

Noss, who is currently a business partner of Steven Ingersoll, goes on to explain that what looks like down is really up.

Utilizing the bogus "it's a donation pledge, not a debt" pivot, Noss claimed in the IPR interview that Smart Schools "would promise to refund some fees when money was tight for the academy, like if teachers offered to take a pay cut in the middle of the year to fill a budget gap."

Teachers, did you ever offer to take a pay cut, or is this just more blown smoke from a financial monkey's ass?

“There were times when the resources were just not there,” explains Noss. “So Smart Schools basically pledged or rebated that money back, saying at some point in time we will repay what we’re calling a prepaid expense.”  

It's hard to take this joker seriously, especially when he contradicts himself twice within the same sentence.

In mid-September, the Academy Board announced with a flourish that it had decided to wait until after Steven Ingersoll's federal trial to sue Smart Schools Management to recover the $1.67 million in taxpayer funds lost to this financial shell game, knowing that if Ingersoll is convicted the feds will seize his assets—making this whole ugly issue moot.

Or is it?


The Academy's attempt at "make it go away" PR looks like could work. There's been no follow-up interview with Mark Noss, even though I revealed on this blog that Noss was a board member when he signed his management contract

And it's clear that the Academy's Board conducted business outside its regular public meetings, considering that the Full Spectrum Management contract was signed on March 19—you can't just pull that rabbit out of your hat in minutes.

In its contorted Orwellian language (lies meant to convince you that Steven Ingersoll didn't run off with nearly $2.5 million right under their noses—and apparently with their complicity), the Academy Board really thinks you're stupid.

And now you need to show them you're not.

Every day, I get upwards of 1,000 page views on this blog, so I know many people are reading my coverage of this controversy.

Just think what might happen if ten of you called Michael Flanagan's office, and asked him the status of the forensic investigation into the Grand Traverse Academy.

And I know someone out there knows an influential person (or three) who can help get this story the traction and attention it deserves.

It does no one any good if you just sit, read, and titter vicariously behind your hands.

Do something...because you're not stupid.