Friday, March 6, 2015

VERDICT WATCH! Jury Deliberations Begin Today In Steven Ingersoll Fraud Trial

It's in the hands of the jury.

Cole Waterman of MLive reports closing arguments wrapped up yesterday, March 5, in the trial of Steven J. Ingersoll, brother Gayle R. Ingersoll, and husband and wife Roy C. Bradley Sr. and Tammy S. Bradley. 

Prior to the closing arguments, U.S. District Judge Thomas L. Ludington dismissed a charge of attempt and conspiracy to commit fraud against all four defendants and Deborah M. Ingersoll, Steven Ingersoll's wife, on the grounds of "insufficient evidence". It was the only charge Deborah Ingersoll faced.

MULTI-MILLION DOLLAR SHELL GAME: Assistant U.S. Attorney Janet L. Parker for the prosecution

According to Waterman's account, Parker addressed the jury first, echoing her opening statements from February 11 in describing the Ingersolls and Bradleys interaction as a "shell game" of moving money around to hide it for tax purposes.

"These people ... they were working together to achieve an objective, which was to shuttle money around and evade taxes," Parker said. "We don't know how the plan was formulated, but we know how it was executed."

With an easel bearing an illustrated map of the process, Parker referenced $704,000 withdrawn from a $1.8 million Chemical Bank construction loan on June 29, 2011, which was transferred to an account of Ingersoll-owned entity Madison Arts, to the Bradleys' construction business account, to Gayle Ingersoll's business account, to Steven Ingersoll's personal account. Steven Ingersoll controlled the Madison Arts account and could have transferred the money from there directly to his personal account, Parker argued.

"There's no purpose for doing it this way other than to make it convoluted, to conceal," Parker said.

Steven Ingersoll in early 2011 hired Roy Bradley and his construction company to convert a former church at 400 N. Madison Ave. into the first campus of the Bay City Academy. The Bradleys had a modest income before 2011, which increased to millions in 2011, Parker said.

"Steven Ingersoll starts making money flow through them," she said. "In fact, the money is moving so fast, they don't keep records, they can't keep up with it."

Ingersoll at the time owed $3.5 million to Grand Traverse Academy, another charter school he previously founded, Parker argued during the trial. He used money from his Chemical Bank loan in an attempt to pay off this debt, she said.

Gayle Ingersoll's involvement saw him create a shell corporation (actually just a Bay County DBA), dubbed Mid Michigan Geo Thermal, to participate in the scheme, Parker alleged. The business had no books and records in support of its legitimacy, Parker said.

"He is part of this movement of money, back and forth, in and out," Parker said.

Parker encouraged the jurors to look at the 2009 and 2010 tax returns for Smart Schools Management and Smart Schools Inc., other Ingersoll-owned entities.

"Look and see how much they have to loan," she said. "Most of those returns are (at) a loss. They don't show positive balances; they show negative balances. They didn't have money to loan. It wasn't a loan; it was what he took."

Parker also reminded jurors of the testimony of attorney Margaret M. Hackett, who said she attended a Grand Traverse Academy school board meeting in May 2013 in which Ingersoll sought to have his $3.5 debt to the school classified as a loan for tax purposes. At that time, Ingersoll was already aware of the Internal Revenue Service's investigation into his practices, she said.

FROM TOKYO TO CADDYSHACK-GODZILLA AND A GOPHER: Martin E. Crandall, Mark Satawa, Robert Dunn, Joan Morgan for the defense

Steven Ingersoll's attorney, Martin E. Crandall, told the jury no criminal enterprise or conspiracy ever transpired. He reminded the jury that Randy Kienbaum of Chemical Bank testified that his agency was not defrauded and that Ingersoll could have spent the loan sum any way he wanted to. The $704,000 in particular went into Grand Traverse Academy's account, Crandall said.

"The loop is nothing more than business people not sophisticated in these kinds of actions," said Crandall, arguing the transfer of $704,000 was not illegal. "That event, emphasized in charts and testimony, it's legitimate." Yes, so unsophisticated that even the IRS could not locate all of Steven Ingersoll's bank accounts!

In Crandall's eyes, the prosecution resulted from an overreaching government effort, characterized by a shoddy investigation and lacking evidence. Ingersoll may have made some mistakes on his taxes, but there was certainly no criminal intent, Crandall said.

One of the trial's more colorful personalities, attorney Mark Satawa, argued on behalf of his client, Roy Bradley. Satawa described his client as "Inexperienced, over his head, and underwater." He characterized the federal government as "Godzilla" and his client as "the Geico lizard" and that the case against all involved is "a great big mess."

"The government saw something that they didn't like, that they didn't understand, and they went after it and everyone they thought was a part of it," he told the jury.

Disorganized though Bradley was with his receipts, deductions, and taxes, he had no intent to defraud the IRS, Satawa said.

Attorney Robert J. Dunn, representing Tammy Bradley, said the government failed to provide any evidence that his client met with or communicated with the Ingersolls. Therefore, there was no evidence of a criminal conspiracy. All Tammy Bradley did, Dunn said, was do some banking for her husband. (Well, at least he didn't say she was "just following orders".)

Attorney Joan Morgan, representing Gayle Ingersoll, said her client came to Bay City in 2011 and acted as a "gopher" or "runner" at the Bay City Academy construction site, bringing supplies there and to other projects run by his brother. At the time, he was broke and living in an abandoned warehouse, she said.

"$704,000 to Gayle Ingersoll would be $704 million to some rich person," she said. "Gayle Ingersoll never saw a cent of it."

Citing "stupidity" as a criminal defense, Morgan said the government provided no evidence to indicate Gayle Ingersoll was a willful part of any conspiracy to defraud the IRS and that, while he may not be the smartest individual, him making a mistake or accident on tax forms does not constitute criminal intent.

1 comment:

  1. Will the jury deliberate through the weekend or resume on Monday?