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Thursday, April 16, 2015

THE INGERSOLL GANG: Greedy Paws-An Exclusive Report From Inside The Monkey Cage!

H.L. Mencken is regarded as one of the most influential American writers of the early 20th century. 

One of his timeless quotes on politics sums up the current state of Michigan's charter schools—on both macrocosm and microcosm scales:Democracy is the art and science of running the circus from the monkey cage.

“Government” is a false aggregate—it's merely a collection of people who wield power over other people and the people in those positions are as self-interested as anyone in Washington.


DO YOU KNOW THE DIFFERENCE BETWEEN EMBEZZLEMENT, A DONATION AND A LOAN? NO? YOU'RE PERFECT!
 

"It doesn't involve Grand Traverse Academy at all," board President Brad Habermehl said to the Traverse City Record-Eagle on March 11, the day after Steven Ingersoll's verdict was announced. 

"There's no relationship between that particular case that involved Dr. Ingersoll's personal taxes and Grand Traverse Academy."

Are those comments merely self-deceptive...or is the claim falseness on a scale even Charles F. Richter would laugh at?


Before I answer that question, let's take a context break, climb into the Wayback Machine and take a trip back to 1993 (bad hair, even worse music!).

Who said, "Public education is a monopoly, and monopolies don't work."? 

No, it wasn't free market economist Milton Friedman, former president Ronald Reagan...or even Ronald McDonald!

It was Governor John Engler, kicking off a school reform debate in a speech to a Joint Session of the Michigan Legislature on October 5, 1993. 

Engler addressed the legislature saying, “No public school teacher should be compelled to be in the union to teach in the classroom.” Engler stood in front of state legislators with a 20-gauge sawed-off shotgun and voiced his support for school choice. 

Engler brandished the gun, supposedly confiscated from a student, to dramatize school violence and promote his plan to "allow
parents more leeway in choosing the schools their children attend".


Michigan's charter school system was set up under the explicit assumption that choice and market forces could allow a massive government funded set of private companies to run with only minimal oversight and regulation. 

Fast forward to 2015, and this free market fundamentalism has brought us, among others, convicted tax cheat (and charter school management company head) Steven Ingersoll. 

But Ingersoll didn't do it all on his own. 

Setting the stage for financial fraud was Governor Snyder, who lifted the cap on Michigan's charter schools in 2012,  Lake Superior State University's charter office (apparently less interested in the appropriate use of taxpayer millions than getting their 3 percent cut), and the Grand Traverse Academy board.

Every failure of a charter school can be traced back, in some form, to the board that governs the school. Charter school boards have many responsibilities and fiscal oversight of the school is a major charge of each charter’s board. 

Instead of zealous public advocacy, the Grand Traverse Academy board appears to have chosen the role of management company defender, insisting that Ingersoll was "rebating" or "donating" money to the school during the years he was really racking up unpaid "related party receivables". The Academy board's stance continued, even years after Doug Bishop, former attorney for the charter school, sent a letter to Ingersoll on June 16, 2013 demanding repayment of the $3.5 million dollars he owed the school.

Why? 

Michigan's weaker-than-water charter school board "conflict of interest" policy may have played a role.

CONFLICTS OF INTEREST...OR INTERESTING CONFLICTS?

"I do solemnly swear that I will support the constitution of the United States and the constitution of this state, and that I will faithfully discharge the duties of office of member of the board of education of the Grand Traverse Academy according to the best of my ability."

As a public official, each board member is required to be sworn in. In addition, a board member must complete an annual "conflict of interest" questionnaire (shown above).

The questions are superficial, and don't probe for answers that might reveal situations like those that enabled the Traverse City school to write off $1.6 million still owed by Ingersoll as a "bad debt".

For example, how about one that asks: Do you share a copyright with the head of the Academy's management company that could entitle you to share in six-figure annual curriculum licensing payments?

Or how about this one: Do you run a business under the name of a trademark held by the head of the Academy's management company?

Yeah, like those would really be included!

But if they had, we might have an official document from Mark Noss revealing he shared the Integrated Visual Learning copyright with Steven Ingersoll.


And we'd have another showing another board member's Detroit-area vision clinic uses Steven Ingersoll's trademarked logo and his method of treatment...a business arrangement likely requiring a licensing fee to Ingersoll and significant income for Academy board member Danna Haba. 

But did financial self-dealing and ultra cozy relations between Ingersoll and the board allow his $3.5 million dollar fee overpayment, described so powerfully by Academy attorney Margaret Hackett during her bombshell testimony at Ingersoll's trial as "a substantial unauthorized transfer of funds"?

Let's look at the so-far unexamined (by law enforcement, anyway) "prepayment" scheme: in a nut shell, Ingersoll advanced money from the Grand Traverse Academy's bank accounts to his Smart Schools Management, Inc. account at the beginning of each school year.

Initially based on preliminary budgets, those amounts were later adjusted at year-end, requiring Ingersoll to "rebate" a portion of his management fees to balance the Academy's books. 

Although the so-called "rebates" were booked first as "receivables" and later as "related party receivables", the Academy's financial audits reveal that Ingersoll never repaid those overpayments over a period of at least five years, leaving him with a $3.5 million dollar debt to the Academy by June 2013.

Hackett, an attorney representing the Grand Traverse Academy board, testified during Steven Ingersoll’s federal fraud trial that during a May 20, 2013 Academy board meeting, Ingersoll asked the board to characterize his $3.5 million dollar indebtedness to the charter school as a “loan”. 

When asked by the prosecution why Steven Ingersoll needed to have his debt “recharacterized”, Hackett said Ingersoll told her he “needed the sums characterized as a loan for reasons related to an IRS investigation and/or audit.”  Ingersoll was clearly aware of the ongoing federal investigation into his finances.

Discussing his $3.5 million dollar debt (while referring to spreadsheets detailing the sums he had transferred from the Grand Traverse Academy's accounts to his personal bank accounts and those of Smart Schools Management), Hackett said Steven Ingersoll told those in the meeting that he “could not afford to pay that (his Academy debt) and his taxes all at the same time”, and needed to have the debt characterized as a loan. 


But rather than pursue recovery, the Grand Traverse Academy board has instead closed ranks, written off $1.6 million dollars, and still refers to convicted felon Ingersoll's bogus "philanthropy" when discussing the massive loss.


This crazy story leaves Miss Fortune wondering how many undisclosed conflicts are still to be discovered?

Who knows...but I will keep looking!



20 comments:

  1. No more funds for using his curriculum? The charter school should have a substantial fund balance. They pay no huge teacher retirement and minimal insurance. Where is the fund balance? It should be close to $500000 or larger if this board wad properly managing a school.

    ReplyDelete
    Replies
    1. Teacher retirement? HA!! No teacher has stayed on long enough there to be vested in the retirement plan!

      Delete
  2. This makes me sick. These thrives are robbing student's education to profit themselves and Ingersoll. Charter schools run by self interest. No student interest in eirherif these schools. Management companies should be required to carry insurance to reimburse schools for their fraud.

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  3. Please keep on keeping on! It's obvious they are all crooks. Everyone knows it.

    Why no one with formal power is interested in investigating them all is mind boggling.

    It is great to see more people are posting to your blog and speaking out. I hope you are recognizing these posts as offset (albiet minor offset) to all of the shit you have had to go through defending yourself for speaking out and having to deal with death threats.

    ReplyDelete
  4. Is Habermehl actually suggesting Steve Ingersoll can rip off millions of tax dollars from a school and that's okay? If a public school board president said this publicly, it would be the scandal of the century and all over national news.

    ReplyDelete
  5. Here is the interesting part - a charter school is a public school. Charter schools are funded with taxes. It is the "management" company that is not public. The solution would be to end charters or write laws that "contracts" paid by "all" schools must be specific in time hours and rates after the service is performed. Each payment supported by time sheets and invoices. The management team with an hourly charge and the left over amount at year end left with the charter "public" school. Many charter schools keep books as open as regular public schools. The schools operated for the students do so. The crooks do it the Ingersoll way.

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  6. If Bill Schuette actually did his job as Attorney General and went after these Charter school crooks and some real corruption he would earn a lot of voter respect and votes. If he does not … he should be out of office for job failure.

    ReplyDelete
  7. The TCAPS superintendent sneezes and it makes the headlines of the Record Eagle and is the headline story on the local tv stations. Ingersoll and pals steal millions and get basically no coverage. How does that happen? Payoffs?

    ReplyDelete
  8. Good question! Mr. Tyree, are you listening?

    ReplyDelete
  9. I'm guessing, misguided journalism, sloppy journalism, selective and /or slanted media coverage? Whatever the reason for not doing proper and balanced coverage of the Grand Traverse Academy and their school board's lack of responsibility and passing the buck, it's absolutely sick and sad. They should be ashamed of themselves. It's a good thing Up North Progressive and Glisteninq, Quivering Underbelly are exposing the crimes and true story of the GTA and Ingersoll et al.

    ReplyDelete
  10. Part of this statement of advancing funds are false. Schools receive state aid over 10 payments based on student count number breakdown not important to this discussion from October to June. The July and August are for prior year. He would be billing monthly for services. The MDE does not prepayment state aid. He had to have been getting paid about the 20th of each month.

    ReplyDelete
    Replies
    1. I believe the School Board has said he took the monies in lump sum payments early in the school year. He always overestimated how much SSM was owed and overestimated school enrollment. He then promised to review the management fee sometime on the spring based on state issued funds and enrollment. SURPRISE! The board or the school accounting person (his relative) never did the review.

      Delete
    2. According to its financial statements, the Grand Traverse Academy participates in the Michigan Finance Authority's State Aid Note Program. Borrowing money from the state allowed the GTA to obtain a percentage of its expected state aid in an August lump sum, repaying it when the monthly payments arrive from the MDE. In 2013, the MFA lowered the total borrowing limit to 55% of state aid from 60% the previous year.

      Prior to the SOM getting into the business, the GTA used a private firm, Massachusetts-based Charter FS Corporation, for similar lending.

      I will clarify that in my post.

      Delete
  11. Are you kidding me? He made the school "borrow" against the state aid and pay interest? Taking more resources from students? I dislike this a**hole more every time I read about his criminal acts against kids.

    ReplyDelete
    Replies
    1. Although the GTA borrowed against its anticipated Michigan school funding, it's a common practice. Due to the payment method, schools borrow to have a significant amount available at the beginning of the academic year.

      Delete
  12. The interest the school paid on the Ingersoll loan - prepaid fees - loan (not legal) did the interest paid get counted as Ingersoll income? Over the year the interest would be another source of income since the school paid a debt for his benefit.

    ReplyDelete
    Replies
    1. The interest on the GTA's borrowing would have been paid directly to the State of Michigan, and as Ingersoll was not part of the transaction the interest would not have been considered income.

      Delete
    2. Do not kid yourself that Ingersoll was not part of the transaction. It is not normal school practice to make prepayment the management team. School loans are suppose to be minimized. Student count near the end of September. These schools were set up for Ingersoll to steal and educating children was not a priority.

      Delete
    3. I'm not kidding myself...IVL is another ATM for Ingersoll and his merry band of thieves. By "Ingersoll was not part of the transaction" I meant he was not part of the loan the State of Michigan made to the GTA--he was just the recipient of its largesse!

      Delete
  13. It seems that the "Excel Institute" only excells at getting money for licensing its learning propaganda, and at marketing. Ingersoll, Noss, and that whole team of 'visionaries' need to be further investigated. What clever wording - "Neuro Vision Rehabilitation Center". They all need rehabilitation and some federal scrutiny...maybe then they can be rehabilitated themselves!

    ReplyDelete