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Saturday, April 12, 2014

INSIDE THE BAD ACTORS STUDIO: Steve Ingersoll And The Madison Arts Gang

Ingersoll
"CHARTER CHEATER" INGERSOLL, WIFE, BROTHER, CONTRACTOR INDICTED IN FEDERAL FRAUD CASE
 
Steven J. Ingersoll, who splits his time between homes in Traverse City and Bay City, can officially add “criminal defendant” to his resume.

On Thursday, April 10, Ingersoll appeared before U.S. District Magistrate Judge Charles M. Binder for his arraignment. Court records indicated he stood mute and not guilty pleas were entered on his behalf. Ingersoll is represented by Traverse City tax attorney/CPA Jan Geht and Detroit criminal defense attorney Martin E. Crandall.



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

Steve Ingersoll, Tammy Bradley and Gayle Ingersoll are charged with wire fraud offenses.

The indictment, unsealed Friday, April 11 in U. S. District Court in

Bay City, alleges that Ingersoll, and the four others named in the indictment, diverted about $934,000 from a school construction project, converting it into personal income for Steven and Deborah Ingersoll. 


The indictment alleges that Ingersoll and contractor Roy C. Bradley, Sr. conspired to induce Chemical Bank of Bay City to approve a construction line of credit loan. The proceeds were to be used to pay for the conversion of a Bay City church building into the school building currently used by one of Ingersoll’s charter schools, the Bay City Academy.

Ingersoll and Bradley, along with Ingersoll’s brother Gayle, his wife Deborah, and Bradley’s wife Tammy, engaged in a series of transactions that successfully diverted nearly half of the $1.8 million Chemical Bank construction loan proceeds away from the Bay City Academy construction project to a joint, personal bank account held by Steven Ingersoll and his wife Deborah at Fifth-Third Bank.


THE TICK TOCK
 
In the spring of 2010, Ingersoll’s Madison Arts LLC shell corporation purchased the former Madison Avenue Methodist Episcopal Church church at 400 N. Madison Avenue in Bay City. In October, Ingersoll signed a contract with Roy C. Bradley, Sr., owner of Lasting Impressions, a construction company, to convert the church into a school for use by the Bay City Academy.

In January 2011, using the construction contract signed by Bradley and acting on behalf of Madison Arts, formed on December 16, 2010, Ingersoll obtained a $1.8 million construction line of credit from Chemical Bank in Bay City. The loan was backed by the U. S. Department of Agriculture, and was supposed to be used to pay for the church conversion. Later that month, Ingersoll signed a promissory note on behalf of Madison Arts, LLC to obtain the loan from Chemical Bank.

Over the next few months, the Ingersolls and Bradleys moved large sums of money between various business and personal accounts and issued checks to one another, according to the indictment.

In February 2011, Roy Bradley signed documentation that Ingersoll used to obtain a $508,000 advance from Chemical Bank. Ingersoll deposited the check into a Madison Arts account he controlled at Chemical Bank. Later that month, Ingersoll issued a $100,000 check payable to Roy Bradley drawn on the Madison Arts account that was subsequently deposited into Bradley’s construction company’s bank account. Also in February, Ingersoll obtained a $400,000 cashier’s check, payable to Roy Bradley, using money from the Madison Arts account at Chemical Bank.

Bradley deposited the $400,000 cashier’s check into his construction company’s bank account. Bradley issued a $200,000 check drawn on his construction company’s bank account and payable to Ingersoll’s brother, Gayle, the owner of a subcontracting company.

Gayle Ingersoll deposited the check into his bank account, and shortly thereafter issued a $200,000 check to his brother, Steven.

Steven Ingersoll deposited the $200,000 check from his brother into a joint, personal bank account he and his wife owned at Fifth-Third Bank in February 2011.

Later that month, Tammy Bradley withdrew almost $100,000 in cash from the construction company’s bank account. Roy and Tammy Bradley closed the bank account and opened a business account at Catholic Federal Credit Union.


During the last week of May in 2011, Deborah Ingersoll made three $9,000 cash deposits into the personal bank account she held jointly with her husband, Steven, at Fifth-Third Bank. Deborah Ingersoll not only “structured” her cash deposits (keeping them under the $10,000 limit that triggers a Currency Transaction Report), she even trotted around to different Fifth-Third branches to make her cash deposits.

Federal law requires all financial institutions to file a Currency Transaction Report (CTR) for currency transactions that exceed $10,000. To evade the filing of a CTR, individuals often structure their currency transactions so that no single transaction exceeds $10,000.

Structuring involves the repeated depositing of amounts of cash less than the $10,000 limit, or the splitting of a cash transaction that exceeds $10,000 into smaller cash transactions in an effort to avoid the reporting requirements. Even if the deposited funds are derived from a legitimate means, financial transactions conducted in this manner are still in violation of federal criminal law.

In May 2011, Roy Bradley wrote a $30,000 check, payable to Gayle Ingersoll, against Roy and Tammy Bradley’s construction company’s credit union account. Gayle Ingersoll deposited the check from Bradley, and then wrote a check for $30,000 to his brother, Steven Ingersoll.

In early June, Deborah Ingersoll deposited the $30,000 check from Gayle Ingersoll and $9,000 cash into the joint, personal bank account she shared with her husband Steven at Fifth-Third Bank.


In June of 2011, Roy Bradley and Steven Ingersoll submitted construction draw requests totaling $704,000 to Chemical Bank, causing the bank to transfer $704,000 to the Madison Arts account in late June. Steven Ingersoll then transferred the $704,000 to Roy and Tammy Bradley’s construction company’s credit union account.

Tammy Bradley then transferred the $704,000 from the construction company’s credit union account to Gayle Ingersoll’s business account at United Bay Community Credit Union in Bay City. Gayle Ingersoll, shortly after receiving the funds, transferred the entire $704,000 to Steven and Deborah Ingersoll’s joint, personal Fifth-Third Bank account.

Steven Ingersoll allegedly used part of the contruction 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.

Ingersoll had made significant financial advances—to himself—using funds belonging to the Grand Traverse Academy.

Ingersoll and his wife Deborah are accused of tax evasion, filing fraudulent returns for the 2009 and 2010 tax years.

Ingersoll’s 2009 tax return claims his and his wife’s taxable income for the year was $278,377 and that the amount of tax due was $77,772 when they knew their taxable income was far in excess of that amount.

On his joint 2010 tax return, Ingersoll claimed a $197,225 taxable income year, with $49,351 in tax owed. 


Prosecutors also allege Gayle Ingersoll and Roy Bradley, whose construction/restoration company worked on many of Ingersoll's projects, conspired to defraud the Internal Revenue Service by evading tax payments.

THE LAWYERS SPEAK (WHO'S PAYING THEM, ANYWAY?)

 “Dr. and Mrs. Ingersoll are innocent of all charges,” Geht said. “The indictment, which alleges they committed various financial crimes, is based on the government’s attempt to cherry pick a few isolated transactions and/or utterly unsupported assertions.”

By focusing on a these transactions, the government ignores the broadly clarifying conduct that defines Ingersoll’s “appropriate, lawful and civic-minded financial activity,” Geht said. “A more detailed review of the Dr. Ingersoll’s actions clearly establishes that none of the accused has committed any wrongdoing.”


Binder set Ingersoll’s bond at $250,000. Deborah Ingersoll is to appear for arraignment at 2:30 p.m. on Tuesday, April 22. Arraignment dates for the other three defendants are not listed in court documents, nor is Steve Ingersoll’s next court appearance.

BAY CITY ACADEMY KICKED INGERSOLL TO THE CURB IN MARCH AFTER LOW ACADEMIC PERFORMANCE REPORT

In late March, disappointed by low academic performance at the charter school, the Bay City Academy Board of Education removed founder Ingersoll as its president of educational services, saying the school needed an administrator whose full-time job is to oversee the school's day-to-day operations.

The move came after the dismissals of former superintendent Ryan Schrock in January and principal Marcia Quayle earlier that month.

The board appointed Traverse City resident Brian Lynch, who had served as an education consultant to the school since the beginning of the academic year, as its new superintendent and president of educational services.
 

Ingersoll stated in March that he couldn't “devote all of his time to the school” that's now in its third year. Ingersoll remains president of Smart Schools, the company that operates Bay City Academy and Grand Traverse Academy in Traverse City.

And Ingersoll still owns the three campus buildings of Bay City Academy — 400 N. Madison Ave., 301 N. Farragut St. and 111 N. Madison Ave. — and continues to serve as the landlord to those buildings.


OPRA AND STEVE

Steve Ingersoll, who has bought dozens of properties throughout Bay City with pie-in-the-sky plans to renovate them, has been in hot water over tax issues. In May 2013, Bay City repealed eight tax breaks for Ingersoll when he fell behind by $29,081 in tax payments at properties previously granted an Obsolete Property Rehabilitation Act Exemption, sometimes known as OPRA.


Several years ago, Ingersoll promised to turn one of Bay City’s aging neighborhoods into “front porch living” – his phrase for a vibrant neighborhood.

It was one of several renovation plans Ingersoll promised when he purchased $750,000 worth of properties between 1991 and 2010. The properties include homes on Bay City's East Side, commercial structures along with the Bay City Academy charter school.

FEDERAL ASBESTOS REMOVAL CHARGES AT BAY CITY ACADEMY

A federal grand jury in August 2013 charged Roy Bradley and Gerald Essex with four counts of illegally distributing and handling asbestos, a felony punishable by up to five years in prison and a $250,000 fine.

Bradley's business, Lasting Impressions, was hired by Ingersoll to do renovations at the Bay City Academy, and has been charged (along with his wife Tammy in the fraud case).

Roy Bradley and Essex's trial on the asbestos charges is to begin Tuesday, April 29, before U.S. District Judge Thomas L. Ludington.

In January 2013, one of Bradley's crew, Rodolfo Rodriguez, testified before a grand jury and deliberately gave false testimony regarding how much asbestos he removed and who directed him at the task, court records show.


Rodriguez in February 2014 pleaded guilty to one count of perjury before a grand jury. “At Bradley’s direction, and under Essex’s supervision, Rodriguez removed at least 200 feet of asbestos insulation from pipes in the church so the pipes themselves could be removed,” the plea agreement stated.
 

Excerpts of Rodriguez’s testimony contained in his plea agreement indicate he varied on how much asbestos he removed, from 20 feet to 200 feet. He initially maintained no one told him to remove the material and that he did so on his own volition, but after being pressed by a grand juror, he said Essex told him to gut the place.


Rodriguez’ sentencing guidelines range from 15 to 21 months. He is also subject to three years of probation following incarceration and a fine which ranges from $3,000 to $30,000, court records show.

U.S. District Judge Thomas L. Ludington is to sentence Rodriguez at 2:30 p.m. on Thursday, June 5.

Bradley and Essex’s trials are scheduled to begin before Ludington next Tuesday, April 15.

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