And Miss Fortune reveals new defense theory details from a document filed on January 15 in Ingersoll's upcoming federal fraud trial. Miss Fortune reveals the names of select witnesses the defense may (or may not) call to testify.
THE FRAUD TRIANGLE
The research on fraud has identified three key factors that determine whether a person will commit fraud.
The three factors, which make up the so-called “fraud triangle,” are: 1- perceived pressure facing the person, 2- perceived opportunity to commit fraud, and 3- the person’s rationalization, or integrity.
All three factors are usually necessary for fraud to result.
For example, an unethical person facing financial pressure will have to identify an opportunity to commit fraud to be able to commit it. Similarly, a person facing financial pressure and in a job position that presents an opportunity to commit fraud will not do so if his personal integrity outweighs the other two factors.
On the other hand, even the second person might commit the fraud if he rationalizes it, for example, by convincing himself that he is only “borrowing” the money and will pay it back.
STEVE INGERSOLL'S CASUAL RELATIONSHIP WITH THE TRUTH?
DEFENSE CLAIMS INGERSOLL BORROWED TAXPAYER MONEY TO ENABLE HIM TO REBATE FEES TO THE GRAND TRAVERSE ACADEMY; SHORE UP HIS PERSONAL BAY CITY REAL ESTATE VENTURES
In the defense theory document filed January 15, Ingersoll's attorney Jan Geht addresses the so-called economic purpose for Ingersoll obtaining what Geht terms “loans”: Ingersoll funneled taxpayer funds through Smart Schools Management, Inc. and Smart Schools Incorporated due to the combined economic pressures of Ingersoll's aggressive “distressed property” real estate expansion in Bay City and the continuous problem of rebating a portion of his Grand Traverse Academy-related management fees.
However, there's no acknowledgment or defense against the government's allegation that Ingersoll could not, as a matter of law, receive a loan from SSM or SSI.
The government previously represented that the payments could not have been loans under Michigan state law, which prohibits charter school funds from being loaned to third parties.
Geht persists, saying that “Smart Schools Management's ability to repay those fees, without any other successful sister school, hinged solely on its continuous relationship with GTA and, just as importantly, GTA’s own financial survival.”
By diverting the money to his other ventures (the Bay City Academy and real estate investments) Ingersoll “ensured that, were either source of future income jeopardized, SSM would have other funds to draw on to fulfill its promise to GTA.”
Think about that for a minute.
Aren’t the two charter schools (Ingersoll's owned-and-operated Bay City Academy and the Grand Traverse Academy) discrete entities and unconnected, with the economic survival of one not dependant on the survival of the other?
Maybe that's what Ingersoll meant by a “symbiotic” financial relationship (left) between Smart Schools Management and the Grand Traverse Academy.
But what may have begun as symbiotic deteriorated and became parasitic — if one goes down, then we all do.
It does sound like a Ponzi scheme.
Rob Peter to pay Paul, then rob Paul to pay Peter.
Sounds like Ingersoll was afraid of getting caught with his pants down—fiscally speaking, of course.
REALLY, I WOULD HAVE PAID IT BACK...IF THE DAMN GOVERNMENT HADN'T INDICTED ME FIRST!
“To the extent there was no actual repayment in full, the failure to repay resulted from the Government’s
investigation and subsequent indictment of Dr. Ingersoll.”
According to Geht, Ingersoll was just one big score away from making it all good — even though court documents filed in this case revealed that his defense team spent nearly a year negotiating a plea deal before Ingersoll was indicted in April 2014!
READY FOR THE DEFENSE, YOUR HONOR!
Since I broke the news on this blog about Ingersoll's multi-million dollar debt, I've written extensively about this case, breaking news about the Grand Traverse Academy's June 2013 $3.5 million dollar demand letter, and I can now share exclusive information about the defense witness list: Steven Ingersoll has selected Grand Traverse Academy Board president Brad Habermehl as a star witness.
Habermehl, who famously dithered back on July 18, 2014 over whether or not to “sue Smart Schools or take it to court”, also admitted that Ingersoll's remaining $1.6 million debt “has been haunting us for over a year now” — just days before the Academy board wrote the amount off as a “bad debt”.
The government's cross-examination of that guy will be one for the ages!
Ingersoll's also listed his forensic accountant, David J. Hammel, Lake Superior State University's Dr. Bruce Harger, Michigan Department of Education accountant Glenda Rader, and CPA Mark Taylor.
In addition, the witness list states that Ingersoll may (or may not) take the stand, with his coat-tailer Roy C. Bradley, Sr. nodding in unison.
And Ingersoll reserves the right to call any witness identified by the government, like his buddy and business partner Mark Noss, Excel Institute colleague Patty Engler, Smart Schools Management, Inc. employee (and former Grand Traverse Academy staffer) Margo Abbott and Bay City Academy
Get there early: it promises to be a hot ticket!