}

Friday, August 29, 2014

BUYING TIME? YOU ASKED FOR SIX MONTHS...WE'LL GIVE YOU THREE: Asst. US Attorney Counters Steven Ingersoll's Request For Six-Month Trial Delay With Three-Month Offer

BREAKING NEWS! 

PLEAD NOW OR FOREVER HOLD YOUR PEACE: Ingersoll tried to cut a plea deal in his federal fraud case nearly a year ago!




A document filed on August 25 reveals Assistant U. S. Attorney Janet Parker countered Steven Ingersoll's request for a six-month delay in his federal fraud trial with a compromise: three months.

But that's not the most shocking fact revealed in the document, made public less than 24 hours ago: Ingersoll's attorneys—Martin Crandall and Jan Geht—were engaged in "pre-indictment plea negotiations" on his behalf, beginning nearly a year ago.

Those plea negotiations appears to coincide with the June 2013 Grand Traverse Academy fiscal audit process. 

Ingersoll apparently withheld that information from the Board, only informing them in March of his impending federal indictment.

The acute financial issue the Academy board is currently grappling with rests on the fact that Ingersoll's Smart Schools Management, Inc. "withheld repayment" of a $2.3 prepaid fee overcharge reported in the June 2013 fiscal audit...money Ingersoll apparently advanced to Smart Schools Management directly from the Academy's bank account right under everyone's noses.

And that $2.3 million dollar overpayment is in addition to the $1,347,234 management fee paid to Ingersoll's Smart Schools Management, Inc. in 2013.


THE US ATTORNEY'S RESPONSE 

On August 19, 2014, less than a month before the scheduled trial date, counsel for Deborah Ingersoll filed a motion, asking that the trial be delayed for six months. Counsel for Steven Ingersoll and Roy Bradley joined in that motion. 

The government response stated that "a six-month adjournment of the trial is unwarranted in this case." Instead, a "more moderate adjournment of approximately three months would be more appropriate in this case."

In addition, since no search warrant evidence is to be presented in the case, and the statements of all defendants were disclosed to their respective counsel more than a month before the deadline for filing motions expired on August 19, 2014, the government opposes the defense request to extend that deadline for two additional months, to October 20, 2014. 

Deborah Ingersoll hired a new attorney (Kenneth R. Sasse) on July 15, 2014, who "was presumably aware of the nature of the charges in the indictment when he sought to join in the case." 

Moreover, at the time when Sasse came on board, the government had already disclosed "over 2100 pages of discovery to all defense counsel, so Sasse should have had reason to believe that discovery was substantial."

In addition, the August 25 filing states that "a cursory check of the docket would have informed counsel that a trial was scheduled for September 16, 2014, and that the deadline for filing motions and entering into a plea agreement were looming."


STEVEN INGERSOLL'S PLEA DEAL 

Sasse, Deborah Ingersoll's attorney, claimed in his August 19 motion that Steven Ingersoll's attorneys have "trials scheduled in September, October and November of 2014."

The government responded, stating that Ingersoll's attorneys are "hardly unique in that regard" and revealed government attorneys also have "trials scheduled during those same months."

In addition, unlike the government in this case, Ingersoll is represented by two attorneys. Both of those attorneys have been involved in the case for approximately two years and even engaged in pre-indictment plea negotiations, starting almost a year ago.


REALLY SMART, SMART SCHOOLS MANAGEMENT: WHO'S YOUR SUGAR DADDY NOW?


This crapapalooza is starting to make sense, in a perverse way.

Could some of that $2.3 million overpaid to Smart Schools have instead found its way into the "Steven J. Ingersoll Criminal Defense and Offshore Excursion Fund"?

Short of a forensic audit of the Grand Traverse Academy, we'll never know.

HOW YOUNG IS TOO YOUNG: IVL For A 3-Year-Old?

Kelly Weaver, who writes the excellent political blog Up North Progressive, has another eye-opening story about IVL (Integrated Visual Learning).

Weaver reveals new information about the business link between federally-indicted charter school manager Steven Ingersoll and Full Spectrum Management's Mark Noss.

And with the Bay City Academy's Quality Care pushing IVL in its new preschool program (licensed to offer care to children as young as three), it's a timely story.

IF NOT FOR YOU: Miss Fortune Analyzes Grand Traverse Academy Board's Ingersoll Support Statement

COMING WEDNESDAY, September 3
 
You will be surprised to learn what I discovered!

Happy Labor Day!

Thursday, August 28, 2014

NEVER MIND THE MAN BEHIND THE CURTAIN! Piercing The Corporate Veil: Steven Ingersoll, Smart Schools Management and the Grand Traverse Academy Board of Directors

The Traverse City Record-Eagle recently reported on Steven Ingersoll’s six month trial extension request, news first revealed on this blog.

Quoted in the article was attorney Kerry Morgan, currently representing the Grand Traverse Academy Board in its quest to retrieve the $1.6 million dollars owed to the school by its former education management provider, Smart Schools Management, Inc.

Morgan stated that “he’s been looking into how and whether it’s even possible the school can retrieve the $1.6 million from Smart Schools.”  Morgan went on to ponder whether there’s a “legally enforceable obligation for that money to be paid.”

Like many of you, Miss Fortune was perplexed—although the Academy had parted ways with Ingersoll’s Smart Schools management entity in March, the school’s Board of Directors has yet to make an effort to recover the money from Ingersoll’s company. 


Seems like someone in State of Michigan's Department of Education would want to know why that's not being addressed.

Hmmm?


In addition, as of June 30, the Academy’s Board still classified the missing money as an “Asset” on its June balance sheet although it's clear that Smart Schools will never provide a benefit to be used in future periods.

So, has the Board gotten cold feet? What could be preventing any attempt to recover the taxpayer money that disappeared from the Grand Traverse Academy into Smart Schools Management’s bank accounts?

In an effort to determine the rationale for the “legally enforceable obligation” question, I went to the source—attorney Kerry Morgan.


In an email response to my inquiry, Morgan stated that the Academy’s “recovery if any must arise under the management contract.” Morgan explained that the Grand Traverse Academy “had a Management contract with SSM, not Ingersoll. SSM is a corporation, Ingersoll an individual.”

Morgan explained that the fact that Ingersoll “is the owner of SSM does not make him personally liable on a contract between SSM and GTA.” The nature of corporate liability means that “statements that ‘Ingersoll owes GTA x dollars’ are misleading. If Ingersoll personally owes GTA any money it must arise from some legal obligation. An oral promise without valid consideration is simply not an enforceable legal obligation.”

Morgan raises several important points, including the true nature of the repayment plan the Academy accepted from Smart Schools Management (relating to the $2,338,980 overpayment/advance revealed in the 2013 fiscal audit) and the Academy’s ability to compel a court to “pierce the corporate veil” of Smart Schools Management.


PIERCING THE CORPORATE VEIL

A key reason that business owners and managers choose to form a corporation or limited liability company (LLC) is so that they won't be held personally liable for debts should the business be unable to pay its creditors. But sometimes courts will hold an LLC or corporation's owners, members, and shareholders personally liable for business debts. When this happens it's called "piercing the corporate veil."

But first, let’s take a look back at how we arrived at this problem.

It might be an overstatement to say that some education management companies (like Smart Schools) use charter schools as their own personal piggy banks, but the scandal at the Grand Traverse Academy illustrates just how easy it is for taxpayer money to flow from charter schools to private companies…and to private individuals.

The Grand Traverse Academy’s 2013 audit revealed that Smart Schools Management Inc., an education management firm run by the school’s co-founder Steven Ingersoll, would draw down cash advances from the school every year, unauthorized by the board. The advances were based on budgeted amounts that “exceeded what the Academy could ultimately afford.”


The audit concluded, “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.” Though these practices were apparently business as usual at the Academy, Board officials raised no alarm when these “prepaid expenses” jumped from $69,898 in 2012 to $2.3 million in 2013.

Rather than demanding Ingersoll’s company give back the $2.3 million, the Academy’s board agreed to a compensation plan that would reduce management fees for future services until 2016.

But less than a year later, an April 10, 2014 federal indictment charged Ingersoll with fraud. The indictment alleged that Ingersoll had tried to redirect about half of a $1.8 million Bay City Academy construction loan to a personal bank account controlled by Ingersoll and his wife in part to “reduce his indebtedness to the Grand Traverse Academy.”

As the Traverse City Record-Eagle has reported, because of this legal jeopardy, which includes additional counts of tax evasion, the $1.6 million Ingersoll owes to the charter school remains in limbo.

Corporate Liability for Business Debts

As Kerry Morgan explained in his email, corporations are legal entities, separate and distinct from the people who create and own them.

One of the principal advantages of forming a corporation or an LLC is that, because the corporation or LLC is considered a separate entity (unlike partnerships and sole proprietorships), the owners and managers have limited personal liability for the company's debts. This means that the people who own and run the corporation or LLC cannot usually be held personally responsible for the debts of the business.

But, in certain situations, courts can ignore the limited liability status of a corporation or LLC and hold its officers, directors, and shareholders or members personally liable for its debts. When this happens, it is called piercing the corporate veil. Closely held corporations and small LLCs are most likely to get their veils pierced (corporations that are owned by one or just a few people are called closely held corporations, or close corporations for short).

If a court pierces a company's corporate veil, the owners, shareholders, or members of a corporation or LLC can be held personally liable for corporate debts. This means creditors can go after the owners' home, bank account, investments, and other assets to satisfy the corporate debt. 


But courts will impose personal liability only on those individuals who are responsible for the corporation or LLC's wrongful or fraudulent actions; they won't hold innocent parties personally liable for company debts.

Factors Courts Consider in Piercing the Corporate Veil

The most common factors that courts consider in determining whether to pierce the corporate veil are:

•whether the corporation or LLC engaged in fraudulent behavior
•whether the corporation or LLC failed to follow corporate formalities
•whether the corporation or LLC was inadequately capitalized (if the corporation never had enough funds to operate, it was not really a separate entity that could stand on its own), and
•whether one person or a small group of closely related people were in complete control of the corporation or LLC.


I’m not attorney (and never played one on TV), but it looks to me like the Grand Traverse Academy may have a good chance at winning a case against Smart Schools Management.

So what could be preventing the Grand Traverse Academy Board from filing a civil action against Smart Schools Management to retrieve the money?

Could it be that, like Staten Island’s Fresh Kills landfill, the deeper you dig…the more it stinks?


THE REPAYMENT PLAN: THE TIES THAT BIND (AND GAG)

Despite a promise to clean the schoolhouse, things don’t appear to have changed much at Grand Traverse Academy. About one month before Steven Ingersoll’s impending indictment, Mark Noss, Ingersoll’s Ferris State classmate, twenty-year business associate and former board president, filed incorporation paperwork to form another education management firm, Full Spectrum Management, LLC.

The very same day, Grand Traverse Academy announced its switch to Noss’ company.

Even though Noss worked with Ingersoll for twenty years and headed the board that allowed Smart Schools Management to collect advanced payments year after year (and a multi-million dollar overpayment in 2013), he claimed he had no knowledge of Ingersoll’s alleged wrongdoing.


“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 (emphasis added).

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

“With my deep understanding of GTA’s history and operations, and my thorough knowledge and alignment with the school’s model,” Noss explained in an April 28 email, “I am confident that Full Spectrum will be a great asset to Grand Traverse Academy.”

In a July 3 Record-Eagle article, Board President Brad Habermehl was quoted musing rhetorically about how the Academy could be "moving forward with a new team when we have all the same high management employees running the show with Mark."

Habermehl said he noticed after Ingersoll's indictment that correspondence about the school's finances came from Gretchen Ingersoll, Steven Ingersoll's daughter-in-law.

“After inquiring what the relationship was and what was going on, it came up she was still doing the books, and had been doing the books for Smart Schools,” said Habermehl, a Flint-based optometrist.

Habermehl said the GTA board hoped Gretchen Ingersoll would leave, as well as any other employees who "crossed over" from Smart Schools management.

And with another Smart Schools’ staffer, Margo Abbott, reportedly providing financial and school count support to both the Bay City Academy and the Grand Traverse Academy, it appears that the links continue.

In fact, Ingersoll’s son, Josh, recently registered Full Spectrum’s new domain name for Noss.

So what exactly did that “repayment plan” agreement state, anyway?

I don’t know, but it’s next on my FOIA request list.

Friday, August 22, 2014

JUSTICE SWERVED?: Ingersoll Fraud Co-Defendant Roy C. Bradley, Sr. Says "Me Too"; Files Motion In Support of Trial Delay

File this one under "no surprises": Roy C. Bradley, Sr. has joined co-defendants Steven and Deborah Ingersoll, giving notice in a court document filed today that he concurs with their motion to adjourn the upcoming September 16 federal fraud trial.

The Ingersolls requested a six month delay, and that the motion deadline of August 19, 2014 be extended for a period of approximately two months.

PER WICKSTROM'S SOUTH BEND TRANQUILITY DETOX OPEN? Unlicensed Facility May Be Illegally Accepting Patients

Miss Fortune has received information from sources that indicates Per Wickstrom's South Bend, Indiana-based Tranquility Detox may be open and illegally accepting patients.

The expansion clinic, located at 3606 E. Jefferson Boulevard in South Bend, was originally supposed to open in mid-March 2013, but its status remains in limbo.

An official spokesperson from Indiana's Family and Social Services Administration confirmed to Miss Fortune recently that although Per Wickstrom's attorney had begun the licensing process for the facility last year, all licensing activity ceased in August, 2013.

The official stated that Amber Howe, on behalf of the South Bend location, informed the State of Indiana in a July 14 email that the clinic would be opening on or around August 1.

The spokesperson explained to Miss Fortune that she told Howe that all previously submitted application materials had been disposed of, as Wickstrom's attorney failed to meet a September 2013 deadline for outstanding material requested by the State of Indiana.

The licensing process will have to be restarted and if the clinic did already open, it is "operating illegally", according to the spokesperson.


The facility is located in South Bend, next to Bill's Liquor.

If you have information regarding the facility's status, please send me an email at: tcmissfortune@yahoo.com and I will alert the appropriate State of Indiana official. 

TRANQUILITY DETOX: An Organization Exempt From Income Tax...But Not Income!

163 North Avenue
PER WICKSTROM'S TAX-EXEMPT TRANQUILITY DETOX MAKES MILLIONS!
More than $2.8 million shoveled into Wickstrom-controlled businesses in 2012; whopping $2,432,328 expense classified as 'Advertising and Promotion'

Housed in a rundown, 7,500 square foot building located at 163 North Avenue in Battle Creek, Michigan, Per Wickstrom's Tranquility Detox managed to generate over $5,000,000 in revenue during 2012. (Due to IRS filing deadlines, the 2012 Form 990 is the most recently available report, filed on March 3, 2014.)

Tranquility Detox, formed on May 9, 2011 by Wickstrom's nephew, Stephen Anderson, was ruled "tax exempt" by the IRS in May 2012. Tranquility Detox was granted its unconditional 501(c)(3) status, and classified as an "educational organization".

The snapshots shown below, comparing 2012 revenue with 2011, show a significant leap.


In addition, the 2012 990 report reveals nearly 55 percent of total revenue ($2,835,600) was funneled through the nonprofit and paid out to two Wickstrom-controlled businesses: Life Solutions Incorporated and Jade Transportation.

Life Solutions received $2,521,700 for "sales & management" services and Jade Transportation received $313,900 for "client transportation". 

Historic Family Physicians (Dr. Stephen A. Robinson) received $673,970.

And the largest line item expense? It's 'Advertising & Promotion', coming in at $2,432,328.


According to the State of Michigan's corporation database, Life Solutions Incorporated was formed in Michigan on January 17, 2012 by Michael Toth, an attorney with Kreis, Enderle, Hudgins & Borsos, P. C., of Battle Creek.

That's the same firm that represented former Narconon Stone Hawk owner Per Wickstrom and TIA Corporation, Inc. during its efforts to obtain a six month extension for the Special Use Permit (SUP) at 300 Care Center Drive in Manistee, home of Best Drug Rehabilitation.

The Nevada records show that Wickstom's sister, Pamela Anderson, was formerly Life Solutions' Secretary and her son, Stephen, was formerly Director, President, and Treasurer. 


They've been replaced by Richie Almstead, Tranquility Detox's Deputy Executive Director, and Heather Harrington. Harrington is the Cheraw, South Carolina-based web developer who's registered hundreds of referral sites for Wickstrom and other Narconon-related drug facilities.


 Officers  
 President - RICHIE ALMSTEAD
Address 1:  121 CAPITAL AVE NEAddress 2: 
City:  BATTLE CREEKState:  MI
Zip Code:  49017Country:  USA
Status:  ActiveEmail: 

 Treasurer - RICHIE ALMSTEAD
Address 1:  121 CAPITAL AVE NEAddress 2: 
City:  BATTLE CREEKState:  MI
Zip Code:  49017Country:  USA
Status:  ActiveEmail: 

 Director - RICHIE ALMSTEAD
Address 1:  121 CAPITAL AVE NEAddress 2: 
City:  BATTLE CREEKState:  MI
Zip Code:  49017Country:  USA
Status:  ActiveEmail: 

 Secretary - PAMELA L ANDERSON
Address 1:  8255 BASELINE ROADAddress 2: 
City:  BATTLE CREEKState:  MI
Zip Code:  49017Country:  USA
Status:  HistoricalEmail: 

 President - STEPHEN P ANDERSON
Address 1:  10486 WILDWOOD DRIVEAddress 2: 
City:  RICHLANDState:  MI
Zip Code:  49083Country:  USA
Status:  HistoricalEmail: 

 Treasurer - STEPHEN P ANDERSON
Address 1:  10486 WILDWOOD DRIVEAddress 2: 
City:  RICHLANDState:  MI
Zip Code:  49083Country:  USA
Status:  HistoricalEmail: 

 Director - STEPHEN P ANDERSON
Address 1:  10486 WILDWOOD DRIVEAddress 2: 
City:  RICHLANDState:  MI
Zip Code:  49083Country:  USA
Status:  HistoricalEmail: 

 Secretary - HEATHER HARRINGTON
Address 1:  121 CAPITAL AVE NEAddress 2: 
City:  BATTLE CREEKState:  MI
Zip Code:  49017Country:  USA
Status:  ActiveEmail: 


"Tranquility Detox" is the fictitious name used for corporate and sales purposes for the withdrawal detox services formerly used and licensed to both A Forever Recovery and Best Drug Rehabilitation.

A Forever Recovery received its own residential detox license from the State of Michigan on March 27, 2014 after closing its previous Tranquility Detox-related license. It appears that only Best Drug Rehabilitation now uses the 163 North Avenue facility for detox, prior to sending patients to the Manistee facility.

So now you know where all that "feel-good" community donation money comes from!