Wednesday, October 29, 2014

WE'RE GONNA MAKE THEM AN OFFER THEY CAN'T REFUSE: How An Insular, Private Fiefdom (Supported With Public Tax Dollars) Helped Enable A Multi-Million Dollar Crime Wave!

Part 2-HOW THE CHARTER SCHOOL RACKET OPERATES IN MICHIGAN: Cracks in the Facade-From The Inception to the Deception

Unlike the Mafia, somebody was smart enough to do their dirt without anyone noticing for a very long time...even though it had been “public knowledge” for years.

What taxpayers didn't know couldn't hurt them, right?—logical thinking to a sociopath. 

It's like saying it's not infidelity if your wife never finds out.


On December 20, 2011, Michigan's "great pretender",  Governor Rick Snyder, touched off a charter school boom when he signed a reform bill into law that (among other things) completely eliminated the cap on the number of the state's public school academies after 2014. 

But in an interview today, Snyder said all schools need to be held more accountable.  

“We shouldn’t create silos of traditional schools and charter schools,” Snyder said during the interview in his Lansing office. “I’m all in favor of raising the standards of accountability for all schools.” 

MLive reported that after a summer full of questions about how charter schools operate in Michigan, Snyder today said he doesn’t want the debate about accountability and transparency in schools to devolve further into charter schools vs. traditional public schools. 

Instead, he’d like to see the discussion move more toward how schools are impacting student learning.

“People are always talking about the money,” he said. “It’s adults talking about adults, and we need to talk more about the kids.”

This is what I hear: Snyder saying he is going to continue to allow charters to abscond with taxpayer money with no accountability unless traditional public schools agree to more stringent reporting requirements. So, either traditional schools "do what I say", or charters continue to get their free ride and our money. 

The kind of corruption unfolding in the Steven Ingersoll fraud case shows educational reform is not about "the kids", it's about the charlatans who took advantage of Michigan's poorly written charter school law and cashed in.

Looks like Snyder doesn't have the guts to admit the mistakes that were made in Michigan's DeVos-fueled effort to overhaul public education.

The transformation of Michigan into a center of for-profit schools and the restoration of a class-based education system is a complete reversal of history. According to University of Michigan Professor Jeffrey Mirel, a specialist on the history of education, by the mid-nineteenth century the state had “become a leader in democratizing education, and in creating a public K-16 system.” During this period Michigan State University was founded as the first land grant college in the United States.

All this was in place when the eruption of the American working class in the 1930s, spearheaded by auto workers in Detroit and Flint, led to the formation of industrial unions, a substantial improvement in living standards and expansion of the reach of quality public education to ever wider layers of the population.

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 Grand Traverse Academy's money sometime in 2009. The missing 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 shell corporation, Smart Schools, Inc., the money ultimately reached Steven Ingersoll's personal bank accounts.

But after discovering Ingersoll's theft, likely revealed to the Grand Traverse Academy Board during the annual audit, it appears the Board may have attempted to stave off any meaningful public disclosure of the loss. 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.

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 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.

And it's apparent to me that the Academy Board's cover-up campaign was aided by a reclassification found buried within the school's 2013 audit, transforming Ingersoll's remaining "receivable" (a previously uncollectible bad debt) into a $2.38 million "prepaid expense"—camouflaging Ingersoll's misappropriation with the guise of an asset. 

In plain language, the Academy would simply deduct the $2.38 million former receivablein three installmentsfrom Smart Schools' expected future management fees.  

According to the 2013 financial audit, the prepaid management fee “reductions” were scheduled to be received from Ingersoll's Smart Schools Management, Inc. as follows:

2014: $774,000
2015: $960,000
2016: $604,980

It's clear to me now from court documents made public in Ingersoll's federal fraud case that he was aware of the impending charges well over a year ago, and likely made the agreement with the Academy for "repayment" while his attorneys were seeking to negotiate his plea bargain.

Although it remains unclear exactly how much key members of the Academy Board knew and when they knew, I believe they must have been aware. Couple that awareness with the nearly non-existent oversight provided by its authorizer, Lake Superior State University, the Board apparently hoped what it buried would stay buried.

But it didn't.

In addition, the Academy Board's preposterous attempt at "make it go away" crisis PR, designed to remedy the school's earlier lack of communication and transparency regarding repayment of an outstanding $1.67 million dollars owed to the Traverse City charter school by Steven Ingersoll's Smart Schools Management, Inc., has fallen far short its goal: to convince you that the missing money is actually the "remainder of nearly $5.0 million in earnings that SSM promised to pay to GTA according to its needs".

In a September 17 interview with Interlochen Public Radio, Full Spectrum Management's Mark Noss went unchallenged when he objected to the term "prepaid expense", calling it "a terrible description of what that money is."

And if anyone would know about the Grand Traverse Academy and its finances, it would be Mark Noss, the head of Full Spectrum Management. 

In a broadcast email sent on April 28 (shown at left), Noss introduced himself to the Academy community, prominently mentioning his 15 years of Board service and "deep understanding of GTA's history and operations".

Financial operations?

Sure looks like it to Miss Fortune.

Noss continues, burnishing his bona fides by highlighting the financial and management experience he "gained as a business owner of over 30 years"—conveniently leaving out the fact he was (and still is) a business partner of Steve Ingersoll.

If it was "important to sever ties with Smart Schools Management to preserve the integrity of Grand Traverse Academy", why was there no mention of the Academy's pivotal role in Ingersoll's federal fraud charges?

We may likely find out the answer to that question, and many others, when members of the Academy Board are called to testify during Ingersoll's upcoming trial. But, since witness lists are private, we're left to ponder.

In the meantime, you'll just have to wonder how millions leaked out of the Academy's bank account during the years Noss (and other insiders) served on the Board.

And how $704,000 in cash just turned up one day, like an abandoned baby on a doorstep, in the Academy's bank account.

Wonder if anyone noticed that

1 comment:

  1. And yet Noss is still asking for money for rentals in his office.

    Office Space for Lease-328 Munson, TC
    2 office spaces 100&160sqft. One with cathedral ceiling, stained glass & cherry trim. Shared conference, waiting & bath rooms. Incl. utility & parking. $300&375/mo. 231 620-7282. drmarknoss@charter.net