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Tuesday, January 20, 2015

MONEY MENAGE A TROIS: Part 2-Embezzlement or Loans?

THE MONEY MENAGE A TROIS: 
Smart Schools Management, Inc.--
Grand Traverse Academy--
Smart Schools Incorporated

Part 2 of Miss Fortune's exclusive series: "A White Collar Crime Three-Way!"

In Part 1 of an exclusive series, Miss Fortune analyzed the defense theory regarding Steven Ingersoll's alleged tax evasion and wire fraud charges.

In today's report, Miss Fortune addresses what may be the most compelling facet of this case: the millions of taxpayer dollars the government alleges Steven Ingersoll looted from the Grand Traverse Academy coffers — apparently under the noses of the Academy's compliant Board of Directors.

In its April 23, 2014 superseding indictment, the government alleged Ingersoll embezzled millions of dollars from the Grand Traverse Academy. 

However, according to Steven Ingersoll's defense memorandum, the economic purpose for obtaining what his attorney, Jan Geht, calls “loans” was to “continue spreading a unique educational model that happens to be profitable.”

But can you really call it a “loan” when there are no inter-company payment records, no firm repayment date, no interest rate, collateral...or any repayment at all?

WHEN IS AN INTER-COMPANY TRANSACTION NOT A LOAN? (CUE THE VIOLINS...HERE COMES THE "FAUX"-LANTHROPIST!)

The economic purpose for obtaining “loans” [emphasis added] was to continue spreading a unique educational model that happens to be profitable.

At least that's how Jan Geht, Steven Ingersoll's attorney, portrays it in the defense theory memorandum.

Launching into a heart-tugging tale that wouldn't leave a dry seat in any Broadway theatre, Geht plucks the heart strings and asserts that Ingersoll developed a unique educational model (Smart Schools) with input from
recognized experts in the fields of optometry, psychology, and education.


Geht says that Ingersoll's most unique contribution was the development of Integrated Visual Learning. Claiming that it's a treatment for learning disorders such as Attention Deficit Hyperactivity Disorder, the memorandum claims (without attribution) that as a result of the learning technique, 90% of the 54 students taking physician-prescribed Ritalin for behavior, learning and attention problems were weaned off the drug
and found success in the classroom among their peers.
 

Geht builds the case for Ingersoll as an educational expert, citing the reputation of the Grand Traverse Academy as the springboard for Ingersoll's burgeoning speaking and consulting career. 

Bay City, home of Ingersoll's owned-and-operated Bay City Academy, was meant to be another locale where Smart Schools would alter the educational landscape for the better. Dr. Ingersoll saw quality education as the key to the renaissance of Bay City.

See how wonderful and selfless he was! 

As part of that plan, Geht says that Ingersoll wanted to purchase and rehabilitate homes of historical significance, so that employees of the new Bay City Academy could rent or purchase those homes.”

What a guy!

Ingersoll's vision was not a secret and was shared not only with the elected officials (including Governor Snyder) but also with Chemical Bank, which actually approved a separate line of credit for the purchase and the rehabilitation of some of the homes.

And so, as Geht explains, the economic purpose for Ingersoll siphoning money from the Grand Traverse Academy for obtaining what he calls “loans” was to enable Ingersoll to spread his largesse around Bay City.


And spread it he did...or did he?

Never mind that one of the homes Ingersoll purchased (616 N. Grant Street) burned one night in a suspicious fire, and that many of the so called-rental homes were never officially certified as such by Bay City, and that Ingersoll owes Bay City nearly $200,000 in property taxes, it appears that Ingersoll may have dipped into the public coffers to help fund what he called his Front Porch Renaissance.

But Geht raises a straw man argument: the constant financial pressure resulting from Ingersoll's Smart Schools Management, Inc. promising to rebate some of its contractually earned fees back to the Grand Traverse Academy.

HELP AN IVL BROTHER OUT: THE FRONT PORCH RENAISSANCE MADE ME DO IT, AND THE GRAND TRAVERSE ACADEMY WANTS MY REBATES!

Geht claims that Ingersoll's ability to rebate a portion of his Smart Schools Management, Inc. fee, without any other successful sister school, hinged solely on the firm's continuous relationship with the Grand Traverse Academy and, just as importantly, the Grand Traverse Academy's own financial survival.

Tomorrow, in the final installment of my exclusive series, Miss Fortune examines Steven Ingersoll's alleged double-dipping at the Grand Traverse Academy...and you'll be stunned to learn what else I've discovered!

COMING TOMORROW: PART 3-Robbing Peter to Pay Paul... Then Robbing Paul To Pay Peter?


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