}

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.

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!

Wednesday, August 20, 2014

I NEED MORE TIME!: Steve Ingersoll Seeks Six Month Delay, Federal Fraud Trial Was Set To Begin September 16

BREAKING NEWS!!

Wiretapped!: Continuance motion reveals pretrial discovery includes "recorded conversations" 

Attorneys for federally indicted Steven J. Ingersoll and his wife, Deborah, filed a motion yesterday in U. S. District Court seeking to delay the duo's upcoming federal trial for six months. 

Assistant U.S. Attorney Janet Parker stated in the motion that she "would not oppose an adjournment". However, neither co-counsel for the defendants nor Parker have committed to the length of the adjournment that would be acceptable.
 
The filing requests an extension in the August 19 motion deadline for a period of approximately two months until October 20, 2014.

Ingersoll's case involves complex issues concerning a $1.8 million dollar construction loan, the responsibility of the parties (including Ingersoll's brother, Gayle, Roy C. Bradley, Sr. and his wife, Tammy) pursuant to the loan, and the Bay City Academy construction project that it funded.
 

The document reveals that discovery in this case is "voluminous", stating that the "government has provided 16 CD-R’s which include over 3,100 pages of documents as well as recorded conversations."

In addition, the most recent installment of the discovery, received on or about August 12, 2014, includes "over 900 pages of documents and a recorded conversation".

The April 23 superseding indictment in this case alleges several offenses. Count 1 charges all defendants with a conspiracy to defraud Chemical Bank of funds obtained through the construction loan 

Count 2 charges Steven Ingersoll, Gayle Ingersoll and Roy C. Bradley, Sr. with a conspiracy to defraud the Internal Revenue Service. 

Counts 3,4, and 5 charge Steven Ingersoll alone, or with a codefendant, with wire fraud in connection with the transfer of funds obtained from Chemical Bank.

Counts 6 and 7 charge Steven Ingersoll with tax evasion with respect to his 2009 and 2010 tax returns.


Steven Ingersoll is represented by Martin E. Crandall of the Detroit firm Clark Hill and Traverse City attorney Jan Geht. Ingersoll's wife, Deborah, is represented by Lake Orion attorney Kenneth R. Sasse. 

Deborah Ingersoll's former attorney, Saginaw-based Barbara Klimaszewski, filed a motion to withdraw from the case on June 30, stating there had been a "complete breakdown of the attorney/client relationship". 

Court records show Sasse replaced Klimaszewski on July 10.


Tuesday, August 19, 2014

MISS FORTUNE SENDS A FOIA: How Will The Grand Traverse Academy Board Respond?

There is a silver lining to the dark cloud represented by the threatening letter delivered to my former Novi condo—and it's spelled F-O-I-A!




Now that my identity has been revealed, I'm free to FOIA...and I've only just begun.

The image above shows the header of this morning's email (due to the ongoing law enforcement investigation, I've redacted my personal email address), and the rest follows:

In addition, I am requesting copies of the Grand Traverse Academy’s fiscal audits for these years:

Year ending June 30, 2000
Year ending June 30, 2001
Year ending June 30, 2002
Year ending June 30, 2003
Year ending June 30, 2004
Year ending June 30, 2005
Year ending June 30, 2006

If there are any fees for searching or copying these records, please inform me if the cost will exceed $25.00.  However, I would also like to request a waiver of all fees in that the disclosure of the requested information is in the public interest and will contribute significantly to the public’s understanding of the Dr. Steven Ingersoll’s upcoming federal fraud trial, his $2.38 million dollar Grand Traverse Academy overpayment and the $1.6 million dollars still owed to the Academy by Ingersoll.

As the editor of the blog, “Glistening, Quivering Underbelly”, I have written extensively about Ingersoll’s fee overpayment, breaking the news in a post on April 13th.


This information is not being sought for commercial purposes.

The Michigan Freedom of Information Act requires a response to this request within five days.  If access to the records I am requesting will take longer than this amount of time, please contact me with information about when I might expect copies of the requested records.

If you deny any or all of this request, please cite each specific exemption you feel justifies the refusal to release the information and notify me of the appeal procedures available to me under the law.

Thank you for considering my request.

Sincerely,

Anita Senkowski

Saturday, August 16, 2014

NEW GRAND TRAVERSE ACADEMY SUPERINTENDENT NAMED: Susan Wager-Dameron, Former Paw Paw Public Schools' Executive Director of Curriculum and Instruction, Tapped for Superintendent/Secondary Principal Combo Spot

After missing the cut back in May for the Northport superintendent slot, the Traverse City Record-Eagle reported yesterday that Paw Paw Public Schools' Susan Dameron has nabbed a gig with the Grand Traverse Academy as the embattled charter school's new Superintendent/Secondary Principal.

The Record-Eagle quotes Mark Noss, head of Full Spectrum Management, LLC about his new hire: "She has an amazing understanding of our culture ... and just has philosophies and understanding of who we are and will just bring some new insight to a model that is already shown to be successful, and I believe she can only add to that educational model," Noss said.  

The Record-Eagle explained that Dameron's new title will be "superintendent/secondary principal" until school leaders decide whether to fill a vacant principal position, formerly held by Allyson Apsey, who left to take a new job in Zeeland.

Dameron left Kalamazoo's Spring Valley Elementary School in June 2012 to take the Paw Paw position, and the school board approved an annual salary for Dameron at $94,600, plus benefits. Former Grand Traverse Academy Superintendent Kaye Mentley reportedly earned a $95,000 annual salary during the 2013-2014 school year. 

Dameron has roots in Traverse City, owning an area home with husband David.

Thursday, August 14, 2014

SCHLITZ & GIGGLES: Throwback Thursday With The "Crooked Chiropractor", Robert Buckhannon

What do "$0.00" and "$8,750,207.22" have in common?

If you guessed Battle Creek's "crooked chiropractor" Robert Buckhannon, you'd be correct!

According to a report released in late July by Buckhannon's bankruptcy trustee, Brian Shapiro, Buckhannon has paid exactly "$0.00" to the U. S. Securities and Exchange Commission. In 2010, the former Las Vegas resident agreed to pay nearly $1.5 million to settle a federal complaint that he participated in a $34 million investment fraud victimizing hedge fund investors.

Miss Fortune can now confirm the exact amount of Buckhannon's SEC fine ($1,479,600.00) is the amount he still owes the SEC!

The report (shown at left) shows that assets worth $315,300.17 were recovered by Shapiro after Buckhannon filed his now legendary $37 million dollar bankruptcy action in Nevada.

As suspected, most of the recovered assets went for the trustee and attorney fees required...to recover the assets!

But what about that other number:
$8,750,207.22?

The report shows that unsecured creditors filed "timely claims" against Buckhannon, totaling $8,750,207.22


You can see that the list includes the SEC, which is still owed the entire amount of the payment Buckhannon agreed to make to settle a federal fraud complaint.

Zia Shlaimoun
In December 2010, the Securities and Exchange Commission filed suit in federal court in Tampa, Florida, against chiropractor, Buckhannon, and codefendants involved with two now-defunct hedge funds, Arcanum Equity Fund LLC and Vestium Equity Fund LLC.

The SEC said the funds, which worked with investment advisor Imperium Investment Advisors LLC, told investors they would earn handsome profits through conservative investments.

Instead, much of the money was misappropriated, the SEC alleged in its lawsuit.

The defendants from early 2008 through April 2010 "comingled investor money from three separate offerings and then looted and bankrupted the hedge funds by steering millions of dollars to themselves,'' the lawsuit alleged.

For instance, the SEC said Buckhannon was involved in deal to steer $6 million in investor money to Shea Mining and Milling LLC for a project called the "Tonopah Mine.'' Buckhannon, however, didn't disclose he had a conflict of interest because he was a founder of Shea Mining and planned to enter into an employment contract with Shea and receive a share of the firm's revenue, the SEC alleged.

The SEC also complained Buckhannon funneled at least $390,000 of investor money to himself, his father, two brothers, his then-fiance's cousin (the infamous Zia Shlaimoun, who recently scuttled back to London after unloading his Malibu home for a reported $15,000,000) and a friend. The SEC said in August 2008 he wired $60,000 out of a fund account to a jewelry store for the purchase of an engagement ring for his fiance (and now wife) Marlena Michaels and in July 2009 he wired another $80,000 to a title company for the down payment on a Las Vegas home.


Mahany/Humphreville LLC, a California company who invested, sued Buckhannon, Arcanum and Vestium in Clark County District Court in April, charging the plaintiff invested $300,000 in Arcanum in January 2008 based on representations it would receive a 15 percent rate of return.

After Mahany/Humphreville became concerned about the use of its funds, the defendants failed to return the investment as requested, the lawsuit charges.

"The parties formulated a scheme to keep the monies and invest them not in securities but in precious gem mines and other nefarious investments which were not part of the original agreement between the parties,'' the suit charged.


Mahany/Humphreville is listed among Buckhannon's unsecured creditors, with a claim of $3, 255.000.

So ask yourself this: what in the world is this dude living on? 

His looks? Nah!

He's not exactly "Mack Daddy" anymore, and if he were a drag queen, his name might be "Lotta Myles".

Could he have money stashed somewhere...it's possible.

He's reportedly juggling at least two women, flying between Michigan and Las Vegas while waiting for the virtual smoke to clear at the On Deck in Battle Creek.

Something tells Miss Fortune that Kari Sonovich's upcoming trial, heating up out near Sacramento, will have our "crooked chiropractor" making a few trips to the Left Coast.

After all, he is mentioned in the indictment!

Tuesday, August 12, 2014

MID-CONTRACT REVIEW: Steve Ingersoll's Bay City Academy

COMING WEDNESDAY

The Bay City Academy charter contract expires June 30, 2016. The "Application for Renewal" process will begin in 2015. 

Tomorrow, Miss Fortune examines the official review and brings you an exclusive report.

(Rescheduled from Tuesday, August 12)


APSEY TO ZEELAND PUBLIC SCHOOLS: Grand Traverse Academy Co-Principal Resigns

UPDATE: August 12 @ 12:15 PM

Miss Fortune has confirmed that Allyson Apsey, former co-principal of the Grand Traverse Academy, resigned to accept a position with the Zeeland Public Schools.

According to an August 11 news release issued by Zeeland Public Schools, Apsey has been selected as the new Quincy Elementary School principal. Zeeland Public Schools received nearly 60 applications for the position vacated by Ellen Kontowicz, who retired earlier this summer.

A formal timeline for the transition has not yet been announced.
--end update-- 

August 14 update: Grand Traverse Academy sends notice email to student families.




August 12 @ 9:03 am:
Miss Fortune is working to confirm a news tip that indicates a Grand Traverse Academy principal has given notice, alerting Full Spectrum Management that she will not be returning for the upcoming school year. 

More information as soon as it becomes available.

Monday, August 11, 2014

AT RISK OF SUSPENSION: Flanagan Takes Charter Authorizers To School

State Superintendent Mike Flanagan announced today that the Department of Education has placed nearly 28 percent of Michigan's charter school authorizers in "At Risk of Suspension" status. 






The school authorizers who were placed in "At Risk of Suspension" are:

    -Detroit Public Schools
    -Education Achievement Authority
    -Eastern Michigan University
    -Ferris State University
    -Grand Valley State University
    -Highland Park Schools
    -Kellogg Community College
    -Lake Superior State University
    -Macomb Intermediate School District
    -Muskegon Heights Public Schools
    -Northern Michigan University



Flanagan said that a recent series of news articles raised enough questions regarding the appropriate oversight by charter school authorizers that he wants to prevent those that do not measure up from contracting new charter schools. 

And Miss Fortune likes to think Department of Education staffers have also been reading this blog, with its extensive revelations of monkey business at both the Bay City Academy and the Grand Traverse Academy.

Flanagan has directed staff at the Michigan Department of Education to establish rigorous principles that measure the transparency, academic, and financial practices of the charter schools of each authorizer. The result of these measures will determine which authorizers would lose their chartering capabilities.

“We are getting serious about quality choices for Michigan students,” Flanagan said. “This is not just about getting academic results. It is about total transparency and accountability.”

Flanagan received a series of letters last week from Greg Richmond, president and CEO of the National Association of Charter School Authorizers, where Richmond outlined the principles and practices that define quality charter school authorizing.

Included in those principles and practices are that authorizers should:

-Clearly identify the school governing board as the party ultimately responsible for the success or failure of the school, and clearly define the external provider as a vendor of services;

-Prohibit the management company from selecting, approving, employing, compensating, or serving as school governing board members. In Michigan, management companies are allowed to recruit board members and are free to hire friends and relatives of board members without disclosing that information;

-Require the school governing board to directly select, retain and compensate the school attorney, accountant and audit firm. In Michigan, management companies can and often do perform this function;

-Require that payments from the authorizer to the school go to an account controlled by the school governing board, not the management company. Michigan already requires this, but management companies can and do immediately move the money out of the board-managed account;

-Require all instructional materials, furnishings, and equipment purchased or developed with public funds to be the property of the school, not the management company;

-Condition charter approval on authorizer review and approval of the management contract;

-Grant charter school renewals only to those that have achieved the standards and targets stated in the charter contract; are organizationally and fiscally viable; and have been faithful to the terms of the contract and applicable law;

-Clearly communicate to schools the criteria for charter revocation, renewal, and non-renewal decisions that are consistent with the charter contract;

-Require evidence of a management company’s educational and management success;

-Require a proposed agreement with a management company to include performance evaluation measures, fee structures, financial controls, oversight and disclosure, and renewal and termination details;

-Require a management company to disclose and explain any existing or potential conflicts of interest between the charter school governing board and proposed service provider or any affiliated business entities.
 

-Require evidence of a management company’s educational and management success;

-Require a proposed agreement with a management company to include performance evaluation measures, fee structures, financial controls, oversight and disclosure, and renewal and termination details;

-Require a management company to disclose and explain any existing or potential conflicts of interest between the charter school governing board and proposed service provider or any affiliated business entities.

THE "T" WORD: TRANSPARENCY

Flanagan stepped up today as he'd warned on July 7 in a press release, alerting Michigan's charter school authorizers that he would be exercising his statutory authority to end their ability to authorize future charter schools – something he'd had the power to do but had never done during his nine years in the job.

Flanagan said today the authorizers are deficient in transparency, accountability and fiscal governance, and their schools as a whole rank in the bottom 10 percent academically. After kicking it old school on the authorizers, about the only thing Flanagan didn't do was let loose with a pack of "maternal insults"—also known as "your mama" jokes.
 
Authorizers at risk of suspension have until Oct. 22 to remediate their deficiencies. Flanagan will decide in November whether to suspend them.


If suspended, the public universities, community colleges and school districts couldn't open more charter schools. Their current schools could stay open.

Monday, August 4, 2014

THE EXCLUSIVE INTERVIEW: Part 2-Miss Fortune Reveals All...To Miss Fortune

The Babuskha of Truth!


THREAT, INTIMIDATION EFFORTS BACKFIRE AS MISS FORTUNE SPEAKS OUT!

AS: This is like the Shawshank Redemption, but with more tunneling through shit and no redemption!

Now where did I leave off? 

Oh yeah, "Pissed Consumer"! Once someone drinks a big glass (or a red Solo cup) of Haterade, there's not much you can do--except join the party.

I'll admit, it was not fun receiving a call from the Novi Police Department telling me that a threat letter intended for me was hand-delivered to a townhouse I'd sold six years ago!

If the person who took the time to drive down Eight Mile Road, turn into Country Place Condominiums, continue to the back of the 90-acre complex, drive into my former court, park the car, walk past someone else's front door, and open my former screen door and shove a crudely lettered note through the mail slot had just spent 90 seconds researching Novi's property records, the idiot would have seen that I no longer owned the home.

But who said criminals were smart, eh?

After developing a detailed "tick-tock" of events leading up to the threat, along with screen captures and copies of emails, I presented that 45-page document to the police department investigating the threat letter and the three cyberstalking incidents.

MF: Cyberstalking, Miss Fortune? Wasn't someone just doing to you what you've done on this blog?

AS:  Not at all! According to Michigan law, charter school board members are considered public officials, and there's a huge difference between revealing pertinent details about a ballooning charter school scandal on your blog and a nudnik who maliciously tells people to "feel free to contact Ms. Fortune (sic) at her home address"...and then publishes it!

MF: You're obviously concerned about your privacy, so why then did you finally reveal your true identity?

AS: After drowning my sorrows with a sweet and savory Dirty Martini (and more than a few Slutty Brownies) one night, I realized that I have much more credibility now. In a perverse way, "Interlochen Idiot" did me a favor.

MF: How's that?

AS: I get credit for everything I've discovered, and I can now FOIA to my heart's content! I working on a number of requests for information that I will soon be sending to the Grand Traverse Academy Board of Directors.

MF: Any hints?

AS: You know, if I told you...

MF: (Laughter)

AS: I do want want my many readers to know that those who've reached out to me in the past and shared information can continue to do so, knowing that their confidence will never be breached.

MF:That's important to know. What's next for Miss Fortune?

AS: Well, most people who read this blog may not know that I've also volunteered for the past few years at a public radio station as a Community News Producer.

I've interviewed former Governor Jennifer Granholm, Flint native and author Gordon Young and even did a special feature interview with Reed Cowan after the Supreme Court struck down part of the Defense of Marriage Act.

MF: Reed Cowan? He directed "8: The Mormon Proposition", right?

AS: Yes, and he's also a news anchor at a television station in Las Vegas. But he started his career in Traverse City--as a thank you gift, I sent him a gift box from the Cherry Republic!

MF: Sweet! So who's your dream interview...the one person you'd really like to talk to?

AS: My girl Kaye Mentley, of course! She must be all Grumpy Cat now, and ready to pop like a can of Pringles!

Kaye, send me an email at tcmissfortune@yahoo.com!

MF: So who do you think will replace Kaye at the Grand Traverse Academy?

AS: My money's on Brian Lynch. Once Ingersoll's convicted, those Bay City Academy students will disperse like milkweed seeds and that school will fold.

MF: Well, the Academy board did give Mark Noss complete approval on hiring...it's in the Full Spectrum Management contract!

AS:  And the position description for the gig just says "administrative experience" and not "supervisory" experience.

MF: You don't miss a thing, girl!

AS: Only my original nose!

(Laughter)