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Saturday, October 25, 2014

STEVEN INGERSOLL'S MULTI-MILLION DOLLAR GRAND TRAVERSE ACADEMY DEBT DROVE HIS BANK FRAUD! Government Alleges Effort To Repay Millions Misappropriated From Grand Traverse Academy Was Main Driver Of Bank Fraud, Tax Evasion; Ingersoll Used $704,000 of Diverted Chemical Bank Loan To Partially Repay Grand Traverse Academy. Federal Clawback Coming?



BREAKING NEWS! Court filing reveals Steve Ingersoll allegedly used $704,000 from a $1.8 million dollar Chemical Bank loan to repay part of his debt to the Grand Traverse Academy!

It is with great pleasure that I bring you this story, and luxuriate in the blissful knowledge that your girl Miss Fortune was right.

(And you won't read this story in your local parakeet cage crap catcher!)

Clawback coming?


In a 26-page decision released October 22 in Ingersoll’s federal fraud case, Judge Thomas L. Ludington denied Roy Bradley’s, Deborah Ingersoll’s, and Gayle Ingersoll’s motions to sever counts 6 and 7 due to “improper joinder”, and refused to order Steven Ingersoll’s, Deborah Ingersoll’s, and Gayle Ingersoll’s motions to produce “confidential informants and exculpatory information” as requested. 

The motions were filed on September 12, the drop-dead motion deadline for Ingersoll’s upcoming December 2 federal fraud trial. (Bradley, his wife Tammy and Deborah and Gayle Ingersoll are all Steven Ingersoll’s co-defendants.)

However, Ludington did grant Steven Ingersoll’s motion for a bill of particulars as to Counts 6 and 7 (income tax evasion) of the superseding indictment, and ordered the government to provide the defense team with: (1) the specific method the Government intends to use to prove the charges; (2) the computation and calculation of the specific items of income comprising Steven Ingersoll’s actual taxable income and their source, and the deductions and costs allowed and disallowed against such income; (3) the dates, amount, character, and source of the income allegedly received but not reported; and (4) the specific entries or portions of the relevant tax returns that are allegedly false. (Counts 6 and 7 charged Steven Ingersoll with income tax evasion, alleging he failed to report taxable income for the years 2009 and 2010.)


In the final motion under review, Steven Ingersoll and Gayle Ingersoll sought permission to file future evidentiary motions after the motion cut-off date set in the trial’s “Scheduling Order”. (September 12). The Brothers Ingersoll noted that, although they have filed all motions that are currently “ripe for decision”, as the trial date approaches, trial strategy can evolve and “previously unrecognized evidentiary or discovery issues may arise”, especially as discovery is organized and prepared for trial.

Ludington acknowledged the motion was limited to evidentiary challenges that will otherwise have to be addressed in trial, and extended the deadline to November 3, 2014. All motions in limine and motions to exclude evidence should be filed on or before that date. 

IMPROPER JOINDER? NAH! 

The April 26 superseding indictment charged all five defendants with conspiracy to commit bank fraud, and charged Steven Ingersoll, Gayle Ingersoll, and Roy Bradley, Sr., with conspiracy to commit tax fraud.

The superseding indictment further charged Steven Ingersoll with tax evasion regarding his attempt to “disguise the money allegedly received from Grand Traverse Academy”—which is also named by the government as the motive for the bank fraud conspiracy and tax evasion conspiracy.

In its October 8 response, the government asserted that evidence supporting Counts 6 and 7 against Steven Ingersoll “may be admissible to explain acts in furtherance of the conspiracies to commit bank fraud and tax fraud—the central charges in the superseding indictment. “


In announcing his decision to deny the motion, Judge Ludington stated that “joining the charges against Steven Ingersoll is in the interests of trial economy, as both the tax fraud and the conspiracies were an attempt to cover up the income received from Grand Traverse Academy. Therefore, the charges against Steven Ingersoll only—Counts 6 and 7—were properly joined.”

CONFIDENTIAL INFORMANTS 

Steven Ingersoll, Deborah Ingersoll, and Gayle Ingersoll had asked the court to order the "production of confidential informants and exculpatory information." 

In their motion, the Ingersolls asserted that various recordings "made by a government witness were only produced because of repeated demands by defense counsel".

In addition, the Ingersolls claimed that former Front Porch Renaissance CEO Tim Hunnicutt “played detective” and “secretly recorded several of his conversations with other third-parties”. They argued that “based on the surreptitious way Hunnicutt made recordings of conversations with Dr. Ingersoll without government oversight, there is reason to believe other individuals were likewise consorting with Hunnicutt and feeding the government information in efforts to ruin Dr. Ingersoll personally.”

Damn, somebody’s got a persecution complex!

The Ingersolls contended that they “are entitled to the names of any person that Hunnicutt may have surreptitiously recorded”, including cooperating witnesses and/or any confidential informants
who participated in the alleged events surrounding Dr. and Mrs. Ingersoll’s indictment.”

However, the group did concede that “the supposed informants did not actively participate in the underlying events”, a factor that would have weighed heavily in favor of disclosure. 


A BILL OF PARTICULARS: SEE STEVE SCREW UNCLE SAM 

According to the government, on or about May 11, 2010, Steven Ingersoll filed a fraudulent income tax return with the Internal Revenue Service for the calendar year 2009. In that false income tax return, Ingersoll “stated that his and his wife’s taxable income for the calendar year was $278,377, and that the amount of tax due was $77,722,” when in fact, as Ingersoll knew, their taxable income for calendar year 2009 was substantially in excess of the amount stated on the return, and, based upon the additional taxable income, a substantial additional tax was due.

In addition, Ingersoll stated that his and his wife’s taxable income for the calendar year 2010 was the sum of $197,225, and that the amount of tax due was $49,351, when as Ingersoll knew, their taxable income for calendar year 2010 was substantially in excess of the amount stated on the return.


As stated earlier, Judge Ludington did grant Steven Ingersoll’s motion for a bill of particulars as to Counts 6 and 7 of the superseding indictment, and ordered the government to provide the defense team with: (1) the specific method the Government intends to use to prove the charges; (2) the computation and calculation of the specific items of income comprising Steven Ingersoll’s actual taxable income and their source, and the deductions and costs allowed and disallowed against such income; (3) the dates, amount, character, and source of the income allegedly received but not reported; and (4) the specific entries or portions of the relevant tax returns that are allegedly false.

One crazy coincidence: the CPA who filed Ingersoll’s personal income tax returns during those two calendar years was the late Duane Kundinger, a Lewiston, Michigan-based CPA.


If his name sounds familiar, it should: Kundinger audited the Grand Traverse Academy in its early years. 

STEVE’S PERSONAL PIGGY BANK? INGERSOLL FLEECES THE “NATIONAL BANK OF THE GRAND TRAVERSE ACADEMY”

According to the government, this case began in 2009 when Steven Ingersoll “caused another charter school that he owned or controlled—the Grand Traverse Academy—to advance him funds that needed to be repaid”. Counts 6 and 7 of the superseding indictment “relate specifically to those advances and Steven Ingersoll’s personal income tax treatment of those transactions in 2009 and 2010.” The superseding indictment alleges that Steven Ingersoll either mischaracterized or omitted the advances from his personal income tax returns.

Ingersoll, then acting in concert with Roy C. Bradley, Sr., “conspired” to “induce Chemical Bank, an FDIC insured depository institution, to approve a $1.8 million construction line of credit loan to Madison Arts L.L.C. to finance the construction work for the Bay City Academy in Bay City.
  (The shell corporation 'Madison Arts LLC' was formed on December 16, 2010 by Ingersoll.)

Rather than using the loan for the Bay City construction project, Steven Ingersoll used loan proceeds to
partially repay the advances from Grand Traverse Academy. The superseding indictment alleges that all five of the defendants “conspired to a series of transactions that diverted at least part of the funds required to be used on the Bay City Academy project to the Ingersolls’ personal bank account at Fifth-Third Bank.”

The stinging 26-page decision, filed October 22, repeatedly reinforced that Counts 6 and 7 of the superseding indictment relate specifically to Ingersoll’s infamous, multi-million dollar cash “advances" and Ingersoll's personal income tax treatment of those Grand Traverse Academy-related transactions in 2009 and 2010.

And the document revealed another shocking allegation (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 between 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", Miss Fortune?

The government alleges Ingersoll cooked up the Chemical Bank loan diversion scheme just to get his filthy meat hooks on enough scratch 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", the October 22 filing revealed the government considers the Grand Traverse Academy's practice of reflecting those advances in its fiscal audits as "accounts receivable" as "prohibited by law".

In the October 22 filing, Assistant U. S. Attorney Janet Parker outlined much of the factual background to the superseding indictment—revealing this bombshell allegation: cash advances Steven Ingersoll made to himself from the Grand Traverse Academy's publicly-funded coffers may at one point have exceeded $3.5 million dollars.

A HOG AT THE PUBLIC TROUGH

During the October 8 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." 


In response, it was pointed out that “the Grand Traverse Academy was audited annually.” 

The government responded, adding that Note 3 to the publicly available audit report for the fiscal year ending on June 30, 2012 for the Grand Traverse Academy contained an entry that stated, “Amounts receivable from related parties $3,548,319.”

And who is that “related party”?  The government alleges it’s Steven Ingersoll.


THE MONEY LAUNDERING SHELL GAME

After diverting approximately $932,000 from the Chemical Bank loan, Steven Ingersoll then transferred $704,000 to Roy Bradley and Tammy Bradley’s construction company’s credit union account.

Tammy Bradley then transferred  $704,000 to Gayle Ingersoll’s business account.

Gayle Ingersoll then transferred the $704,000 to Steven Ingersoll and Deborah Ingersoll’s joint, personal bank account at Fifth-Third Bank.
 

Once the $704,000 was in Steven and Deborah Ingersoll’s personal account, Steven Ingersoll was able to use that money to partially repay the Grand Traverse Academy.

The government alleges the bank fraud conspiracy began when Steven Ingersoll submitted a $704,000 draw request to Chemical Bank supported by Roy Bradley’s certification of construction work at the Bay City Academy's Madison Arts campus. 


This $704,000, after a series of transfers, ended up in Steven
Ingersoll and Deborah Ingersoll’s joint account.


And, if the government is right, it went back to the Grand Traverse Academy.

So, which one of you future criminals wants to argue the deceptive and deceitful "there were times when the resources were just not there, 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" theory?

I didn't think so.

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