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Monday, September 7, 2015

BACK TO SCHOOL 101: The Grand Traverse Academy's Steven Ingersoll Fraud Scandal — Part 3, The Final Installment

If you thought parts one and two were bad, wait until you read part three.

Most shocking? The Michigan Department of Education's chickenshit excuse for not getting involved: it's a "local" issue!


 
January 8, 2015 Ann Arbor-based online magazine, Bridge MI, features Steven Ingersoll’s upcoming trial and interviews Grand Traverse Academy Board President, Brad Habermehl and Full Spectrum Management’s Mark Noss.

Habermehl and Noss continue the concerted cover up, with one (Habermehl) expressing appreciation of what he called Ingersoll’s “philanthropy” while the other (Noss) denied any “conflict of interest”. (This timeline really needs a laugh track!)
 
Optometrist Mark Noss helped Ingersoll develop the curriculum for the school and was the school board president for about five years. Ingersoll founded the Excel Institute in Traverse City, a clinic that specializes in Integrated Visual Learning that is now owned by Noss.

In the “Bridge” story, Noss said even though he and Ingersoll developed the curriculum for the school, it was not a conflict of interest for him to be a board member responsible for overseeing Ingersoll’s management of the school through Smart Schools. The school paid Smart Schools for management and also paid a fee for use of the curriculum.

“I don’t view that as a conflict of interest,” Noss said. “We never owned a business together. I was not getting financially compensated.”

(NOTE: Here's something The Bridge missed: although “Integrated Visual Learning” is the foundation of much of Ingersoll’s “intellectual property”, U. S. Copyright Office records reveal Ingersoll and Mark Noss share the copyright for the original 1994 IVL process text titled “Integrated vision therapy” — not Smart Schools, Inc.)

In the article, Habermehl called Ingersoll’s April 2014 indictment “old news” and said the school was able to avoid cuts and keep class sizes small due to Ingersoll’s management.

“The board was definitely appreciative of Steve’s philanthropy and help staying out of deficit,” Habermehl said in the article. “This school was his baby, not a Ponzi scheme or way of ripping off money. He certainly wasn’t trying to get rich by scamming the school. Whatever the school owed the company or the company owed the school is no longer at issue.” The school doesn’t expect the company to pay up and has no plans to pay Ingersoll’s company anything further.

“All deals are off,” Habermehl said.

February 11, 2015 After several delays, Steven Ingersoll’s federal fraud trial begins in U. S. District Court in Bay City.

March 3, 2015 Called by the prosecution, Academy attorney Margaret Hackett testifies during Ingersoll’s federal fraud trial. When asked by Ingersoll’s defense attorney, Martin Crandall, to describe his client’s demeanor during the May 20, 2013 Grand Traverse Academy special board meeting, Hackett said that at times Ingersoll “seemed to be challenging the sums owed.”

Admitting that Ingersoll’s request was the first time he’d asked for his debt to be considered a loan, Hackett states that the debt had been variously characterized in Grand Traverse Academy financial audits as either  “accounts receivable or a prepaid expense.”

Asked by Crandall to describe the amount Ingersoll owed, Hackett described the $3.5 million dollars as a “significant unauthorized transfer of funds.”

March 10, 2015 Steven Ingersoll convicted of three counts of fraud and tax evasion.

March 11, 2015 Grand Traverse Academy Board President Brad Habermehl comments on the verdict to the Traverse City Record-Eagle.

Habermehl claims Ingersoll’s conviction “doesn’t involve Grand Traverse Academy at all. There’s no relationship between that particular case that involved Dr. Ingersoll’s personal taxes and Grand Traverse Academy.”

The crony cover up continues.

March 19, 2015 Stipulation filed in federal court allowing convicted felon Steven Ingersoll to contact a select group of individuals to "arrange his financial affairs and to prepare for sentencing": Bay City Academy Board member Craig Johnston, Ingersoll longtime business associate Mark Noss, Smart Schools Management, Inc. employees Margo Abbott and Patty Engler, bank executives Randy Kienbaum and Walter Szostak, Lake Superior State University Charter School office Executive Director Nick Oshelski, tax preparer Richard Cummins and one Kyle Andrezjewski.

March 26, 2015 Steven Ingersoll files motion for a judgment of acquittal/new trial.

March 26, 2015 A quit claim deed filed with the Bay County Register of Deeds transferring 111 N. Monroe in Bay City from Arts District LLC to Kyle Andrezjewski— for the consideration of one dollar!

Steven Ingersoll signed the quit claim deed as the grantor on behalf of the Arts District LLC.

Later that day, accompanied by Steven Ingersoll’s brother, Gayle, Kyle Andrezjewski files a request at the Bay County Treasurer’s office seeking a "hardship exemption" from the $10,247.44 owed in back property taxes on 111 N. Monroe.

On the hardship exemption paperwork, Andrezjewski listed Roy Bradley's Thunder Builders as his former employer. Also, he listed his estimated household income for 2015 as approximately $8,416.39. As a federal affidavit filed with the government’s March 31 motion for a restraining order would later reveal, Andrezjewski "inexplicably agreed to pay the county $500 per month for the back taxes owed on 111 N. Monroe", leaving him less than $2,500 to live on for the year.

And who was Kyle Andrezjewski? Better known to fellow Thunder Builders wage slaves at the Bay City Academy construction site as "Peanut", Andrezjewski was subpoenaed to testify before the Bradley/Essex asbestos case grand jury in the fall of 2013 and by Bradley's lawyer for his trial in the fall of 2014.

So, what's the name of that game? Cooperate, and you'll get a "$1.00 House?"

Even more galling, court documents later filed March 31 revealed Ingersoll was already transferring properties March 11, the day after he was convicted of three federal felonies.

March 31, 2015 Government files a motion seeking a restraining order to stop Steven Ingersoll from “putting his properties beyond the reach of the court”. The motion revealed since his trial began on February 10, and continuing after the jury returned its verdicts on March 10, Ingersoll had been taking various steps to "cloud the title to property owned by his various entities and to put his property interests beyond the reach of the court."

Based on the timing of the transfers, as well as the participants in the transactions, the government motion stated that "it appears that Steven Ingersoll is engaging in a course of conduct intended to put title to his assets into friendly hands to keep liens based on the anticipated restitution and costs of prosecution provision in the forthcoming judgment from attaching to those properties."

April 14, 2015 Admitting in its response to the government’s March 31 motion that the five properties referenced by the government had "no equity and were due to revert to the Bay County Treasurer due to unpaid property taxes", Ingersoll’s defense asserts he owns other, similar low-value properties in Bay City, which he can no longer maintain due to his "now-limited ability to earn a living following the prosecution and conviction". (Theory known among legal circles as the “I’m a broke-ass, feel sorry for me” defense.)

April 17, 2015 Judge Thomas L. Ludington issues an order delaying Steven Ingersoll’s sentencing hearing from June 16 to September 24.

June 9, 2015 Government files response to Ingersoll’s motion for a new trial.

During the trial, the government presented evidence that Ingersoll used his solely-owned businesses to obtain control over millions of dollars which he then used as he saw fit, shuttling funds between his entities, his personal bank accounts, and projects pursued with Bradley, all without reporting the income that the funds represented to him on his tax returns filed during the relevant time periods.

The evidence included federal income tax returns filed by Steven Ingersoll for himself, Smart Schools Management (SSM), and Smart Schools Incorporated (SSI).

Over a period of six years, millions of dollars sluiced through the Grand Traverse Academy's bank accounts like rainwater into a storm sewer — ending up in various accounts controlled by Steven Ingersoll.

Those federal tax returns revealed that Steven Ingersoll and his related entities did not have enough money of their own to fund the Bay City Academy church-to-school renovation project that Ingersoll undertook with Roy Bradley in 2010 and 2011.

But what about former Grand Traverse Academy superintendent Kaye Mentley, who famously circled the wagons after Ingersoll's indictment, claiming in an email that "the charges have nothing to do with the Grand Traverse Academy"?

In its response, the government revealed information indicating Mentley must have been aware her post-indictment assertions were untruthful:

“As Ingersoll told Kaye Mentley, the school superintendent for GTA and an employee of Ingersoll’s SSM, Ingersoll used money from the BCA loan to repay part of the “seed money” that GTA had provided to BCA, albeit without authorization by GTA."

July 13, 2015
Judge Thomas L. Ludington issues an order denying motions for a new trial filed by Steven Ingersoll and co-defendant Roy C. Bradley, Sr. In his order, Judge Ludington stated the “arguments are without merit”.

July 19, 2015 Interlochen Public Radio reports the Grand Traverse Academy Board could finally be ready to recover $1.67 million dollars from convicted felon Steven Ingersoll...maybe.

IPR interviews Academy Board President Brad Habermehl, who is “not confident they (the Board) will be able to recover money” from Ingersoll. 


And it’s no wonder the Board spokesperson would say that — a slippery sidestep whose hidden meaning zipped right over the head of the reporter.

As I revealed exclusively on this blog September 2, 2014, the Grand Traverse Academy never amended Ingersoll’s Smart Schools Management contract with the agreed upon details of the three-year fee “repayment plan” outlined in the Academy's 2013 fiscal annual report, apparently leaving the charter school without a “legally enforceable obligation for that money to be paid.”

It was a friendly oversight that left a giant loophole big enough for Steven Ingersoll to walk through.

August 6, 2015 Judge Thomas L. Ludington issues order granting attorney Martin Crandall’s motion to withdraw as Steven Ingersoll’s “counsel of record”. Ludington issued the order granting Crandall's request to parachute from the case because Ingersoll had "not met his financial obligations". Crandall complained that Ingersoll had not paid him for any work done in 2015. (#BOOHOO)

August 6, 2015 In an email to Miss Fortune, Grand Traverse Academy Board attorney Kerry Morgan finally admits that after nearly 16 months of public statements to the contrary, the Board has formally decided against taking any legal action to recover the estimated $1.67 million dollars owed to the Traverse City charter school by its former management company, Ingersoll’s Smart Schools Management, Inc.

Morgan said that that “litigation is legally precluded because the SSM and GTA contract contains a mandatory arbitration clause. Thus, a lawsuit is not a legal option.” And although a July 9 Interlochen Public Radio interview featured Board President Brad Habermehl claiming that the school’s attorney was “looking at options for recovering the $1.6 million”, including bringing in an outside arbitrator, Morgan contradicted Habermehl's assertion.

Morgan revealed in his August 6 email that “the [Grand Traverse Academy] Board is not inclined to file an arbitration demand either.”
 


Apparently Morgan has never heard of the “fraud exception”.

#FREEMONEY!

August 24, 2015 Judge Thomas L. Ludington delays Steven Ingersoll’s sentencing hearing again from September 24 to October 20, 2015 at 8:30 a.m. to accommodate a hearing on two government motions: one for a restraining order and another to compel Ingersoll to produce "complete and accurate financial information". (That hearing is scheduled for September 24 at at 2:30 p.m.)

August 26, 2015 Miss Fortune reveals Chris Oshelski, son of former Lake Superior State University Charter School office Executive Director Nick Oshelski, has taken over his father’s job. Although Chris Oshelski, who shares the same last name as his predecessor, was most recently a 4th grade teacher, he has absolutely no charter school management experience. The position description lists a salary range between $60,000 to $80,000 dollars a year.

#NEPOTISM RULES!

September 1, 2015 In an email to Miss Fortune, a Michigan Department of Education spokesperson responds to an August 9, 2015 email sent to Mark Eitrem, head of the MDE’s charter school office. I’d requested a comment from Eitrem on the Grand Traverse Academy Board’s decision to abandon all pretense that it was seeking the return of any money from Steven Ingersoll.

Martin Ackley, the spokesperson, said the Michigan Department of Education would “respectfully decline to comment” as the loss of millions of Michigan taxpayer dollars was merely a “local school district contractual and legal issue”.

So if you’re wondering how the Grand Traverse Academy Board of Directors can make what appears to be a unilateral decision not to pursue recovery of an estimated $1.67 million dollars siphoned by crony philanthropist Steven Ingersoll using an arbitration clause and unlikely recovery as their excuses, don’t ask the Michigan Department of Education.

They apparently don’t give a shit!




 

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