Wednesday, October 14, 2015

"ABUSING A POSITION OF TRUST WITH GRAND TRAVERSE ACADEMY": Government Prosecutors To Present "Aggravating" Evidence Regarding Steven Ingersoll's Pivotal Role In Alleged Embezzlement Of Millions Of Taxpayer Dollars From Traverse City Charter School; October 20 Sentencing Hearing Date Looms.


Judge Thomas L. Ludington issued an order this morning (October 14) granting in part Deborah Ingersoll's September 15 motion to quash the subpoena requiring her to testify against hubby Steven Ingersoll's during his federal sentencing hearing. (The sentencing hearings in this case are scheduled from October 20, 2015 to October 22, 2015, from 8:30AM to 1:00PM. Ludington indicated additional days will likely be necessary, and will be identified with the parties’ assistance.)

While Deb's subpoena will be quashed with respect to "marital privilege", Ludington stated the "subpoena will not be quashed with respect to Deborah Ingersoll’s testimony pertaining to Roy Bradley, and the Court will determine on a question-by-question basis whether Deborah Ingersoll has reasonable cause to apprehend a real danger of providing testimony against her spouse."

Gayle Ingersoll's September 30 motion to quash his subpoena was denied by Ludington.

In the order, Ludington stated he "will determine on a question-by-question basis whether Deborah and Gayle Ingersoll have reasonable cause to apprehend a real danger of incrimination." In addition, Ludington will determine whether each question, on its face, “calls for the admission of a crime or requires that the witness supply evidence of a necessary element of a crime or furnishes a link in the chain of evidence needed to prosecute.”


United States sentencing guidelines (table at left) are employed in all federal cases to determine the sentences for felonies. Tax fraud is a felony. The driving force in determining a sentence for tax fraud is the amount of money that is involved. The greater amount of money, the longer the potential sentence.) The guidelines are a very complex set of rules used to calculate a federal sentence based upon the crime charged, the circumstances of the case, and the criminal record of the defendant.

(Hint: if you are a defendant, you want lower numbers.)

Some of the aggravating factors in a federal tax fraud case could be the amount of money in question, the means that were used to obtain that money, if they were what are called "sophisticated means". Additionally, how long the alleged tax fraud was going on, how many others were brought into it, or did it involve a conspiracy — all those things can aggravate or increase the sentence.

The defense may put on evidence of mitigating factors that would support leniency in sentencing. Criminal statutes devote far less attention to factors that might mitigate a defendant’s punishment, but courts have held that evidence relating to a defendant’s character may be introduced provided that it is relevant to the sentencing process. 

Common mitigating factors include: lack of a prior criminal record; a minor role in the offense; culpability of the victim; past circumstances, such as abuse that resulted in criminal activity; circumstances at the time of the offense, such as provocation, stress, or emotional problems that might not excuse the crime but might offer an explanation; mental or physical illness; and genuine remorse.

(I'm guessing we won't see that last one in Ingersoll's defense presentation.)

Let's focus on the government's lead-off aggravating factor: its contention that Steven Ingersoll should be assessed two additional guideline points for abusing a position of trust with the Grand Traverse Academy. (The government also contends that additional guideline points should be assessed for Ingersoll’s "leadership role" in a criminal conspiracy.)


The current federal sentencing guidelines manual outlines specific sentencing adjustments for "abuse of a position of trust or use of a special skill": if the defendant abused a position of public or private trust, or used a special skill, in a manner that significantly facilitated the commission or concealment of the offense, increase by two levels.  

"Public or private trust" refers to a position of public or private trust characterized by professional or managerial discretion (i.e., substantial discretionary judgment that is ordinarily given considerable deference).

Persons holding such positions ordinarily are subject to significantly less supervision than employees whose responsibilities are primarily non-discretionary in nature.  For this adjustment to apply, the position of public or private trust must have contributed in some significant way to facilitating the commission or concealment of the offense (e.g., by making the detection of the offense or the defendant's responsibility for the offense more difficult).  This adjustment, for example, applies in the case of an embezzlement of a client's funds by an attorney serving as a guardian, a bank executive's fraudulent loan scheme, or the criminal sexual abuse of a patient by a physician under the guise of an examination.

In Ingersoll's case, it appears his tax evasion may have been part of a larger scheme, one that included embezzling funds from the Grand Traverse Academy and hiding the income.  The government will likely present evidence to show Ingersoll effectuated the scheme by abusing his positions as Chief Administrative Officer of the Grand Traverse Academy and head of Smart Schools Management, Inc., the school's management company, and shielding the illicit income from the government.  The alleged multi-million dollar embezzlement accomplished in this manner was part and parcel of the crime of conviction insofar as it provided Ingersoll with the some of the funds he failed to report.  

As such, it appears to Miss Fortune to be relevant conduct. Where a defendant's tax evasion was part of a larger scheme constituting relevant conduct, an integral part of which involved abusing a position of trust, the federal guidelines indicate a sentencing court may properly apply an enhancement under U.S.S.G §3B1.3.

I could go into groin-kicking detail about the application of the guidelines to this case, but let me cut to the chase: once the feds kick open the door to Ingersoll's conduct at the Grand Traverse Academy, what other federal charges will come tumbling out?

Who else will be caught floundering in that net — and will they be philanthropists...or thieves?

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