Traverse City Record-Eagle
December 1, 2015
'Hard to read' is an excuse? Aren't most of these people optometrists?
Miss Fortune responds to the Record-Eagle article, Kaye Mentley's “grudge”...and the secrets of Mark Noss.
In its December 1 online story, a Record-Eagle reporter quotes Ingersoll's business partner Mark Noss and his remaining attorney, Jan Geht, apparently without follow-up questions or any real understanding of the May 30, 2013 Thrun Law Firm letter, Kaye Mentley's affidavit or the Dennis, Gartland & Niergarth “forensic report”.
Geht, who is likely still floating his pet “conduit theory” to anyone unlucky enough to sit on the nearest bar stool, insists in the piece that the missing millions are really “rebates”. (Ho, hum!)
Noss, for his part, takes the low road, asserting that Kaye Mentley's affidavit is merely the product of a woman scorned, claiming that Mentley has a “grudge” because she was kicked to the curb shortly after Noss assumed control of the GTA.
And in the most galling segment of the story, Noss downplays the importance of the 15-page Thrun Law Firm letter, dubbing it “inflammatory” — as if it were merely a diseased portion of his lower bowel instead of a stinging indictment of a years-long game of financial patty cake.
Ingersoll is facing a “position of trust abuse” federal sentencing enhancement, based on the argument that he abused his position with the Grand Traverse Academy by virtue of his embezzlement/ misappropriation of millions in taxpayer funds.
It is misleading, however, to suggest that he “abused the trust of other school officials to conceal millions of dollars he took from the school” when the evidence shows they clearly allowed him to do it.
Contrary to the Record-Eagle’s assertion that the Grand Traverse Academy Board of Directors only discovered Ingersoll’s “company owed the school money more than a year before they switched management companies in March 2014”, numerous court documents and even the Grand Traverse Academy audits revealed the Board knew, or ought to have known, the truth of Ingersoll’s pattern of management fee advances (and systematic lack of repayment) as early as 2006.
Kaye Mentley’s sworn affidavit, which was accepted into evidence without objection by Ingersoll's defense during the October 20, 2015 sentencing hearing, paints a portrait of a seemingly detached woman, one who defiantly refused to take any responsibility for the financial decimation of the Grand Traverse Academy that happened under her watch — while admitting she regularly took calls from vendors regarding delinquent payments.
According to Mentley, this chronic problem became worse in 2011, 2012, and 2013. When Ingersoll began working on the Bay City Academy, Mentley “urged him to keep GTA separate from the Bay City Academy, as well as from other projects Steven Ingersoll was pursuing”.
It was in the context of these conversations, according to Mentley, that Ingersoll referred to the GTA as the “golden goose”. Mentley learned that GTA was owed $3.5 million when she “was interviewed by federal agents on May 2, 2013. During the interview, the agents showed me a footnote to an audit report.”
An audit report from the fiscal year ending June 30, 2012 that had been made public nearly one year before!
Mentley “contacted the Thrun Law Firm on the morning of May 3, 2013 and spoke to Meg Hackett. The GTA board had retained two attorneys — Doug Bishop and the Thrun law firm. I contacted Thrun because I knew that they had expertise in educational law and educational finance. Shortly thereafter, Hackett met with the GTA board and a forensic audit was initiated. Steven Ingersoll did not dispute owing $3.5 million to GTA, and said that he would repay it without explaining how. When a promissory note was suggested, Hackett said that GTA could not accept a note because the school cannot make a loan.”
At one point, Ingersoll told me that “SSM put a lot of money into BCA and now BCA needs to pay SSM so SSM can pay GTA”. He also told me that it was his responsibility to move money between SSM and GTA to keep both “healthy”.
So does Kaye Mentley have a “grudge”?
Maybe, but she also spilled a lot of secrets, ones that Noss and company would have preferred to keep buried.
Noss already knew what was going on — but told IRS investigators it was just fine.
According to IRS Revenue Agent Michael Wisniewski, who testified during Ingersoll’s sentencing hearing, he and fellow IRS Agent Mike Kaza conducted in-person interviews with several Grand Traverse Academy Board members and office staffers in early July 2013.
All denied ever having seen the page in the audit report that revealed Ingersoll’s $3.58 million dollar prepaid expense/accounts receivable balance. Wisniewski and Kaza interviewed board members Larry DeYoung and Leslie Werth, and each denied knowledge of the debt although each one admitted receiving complete financials, including the audit.
Except for Mark Noss.
When initially contacted by phone, Noss denied any knowledge of the missing money.
However, when interviewed in person in his office by Wisniewski (who was asked a point-blank question by the prosecution during his October 20 testimony: Did it ever come to your attention that the information given during that interview was different than the information given over the phone?), Noss admitted that he did know but claimed to Wisniewski that it was legal for Ingersoll to take the money.
Noss admitted that the State Aid Anticipation Loan borrowing substantially increased during the years Ingersoll was helping himself to millions of taxpayer cash, with the borrowing keeping the Grand Traverse Academy afloat.
Even as he acknowledged the stepped-up borrowing, Noss stated to Wisniewski that Smart Schools Management was legally under contract and entitled to the funds Ingersoll took.
When asked why the practice was allowed to answer, Wisniewski testified Noss did not answer.
During his October 20, 2015 testimony, Wisniewski read a paragraph from an official IRS “Memorandum of Interview” with Mark Noss where Noss stated that the Grand Traverse Academy Board was aware of the situation, which he claimed started in 2009, and was made aware every year after.
According to Wisniewski’s sentencing hearing testimony, Noss claimed that “school projects created deficits”. Noss claimed that under the Grand Traverse Academy/Smart Schools Management contract, Ingersoll was legally entitled to the money.
And, of course, in the Record-Eagle, Ingersoll's attorney Jan Geht denied any “abuse of trust” by Ingersoll.
Claiming, presumably with a straight face, the “reason that number accumulated is by virture of rebates promised to the school.”
You mean, like the 11% rebate you get at Menard’s?
But Noss still has the convicted felon Ingersoll’s back, slamming Mentley for "digging that deep to try to take Steve down”.
Did Mark Noss forget that it was not Kaye Mentley’s words that dug the hole for Steven Ingersoll?
But the most troubling oversight in the Record-Eagle’s article was its seeming dismissal of the 15-page Thrun Law Firm letter. Sent to the Board by attorney Meg Hackett on May 30, 2013, the letter did much more than just raise “concerns about the prepaid fees” and urged Board members to act quickly.
However, Mark Noss dubbed the letter “inflammatory” and claimed a forensic audit later showed there was potential for an abuse of funds, not an actual abuse.
Although Dennis, Gartland & Niergarth performed a forensic examination of select transactions relating to Steven Ingersoll and the Grand Traverse Academy in September 2013, it was not a forensic audit — and never addressed “abuse”.
The once confidential 15-page legal analysis, released publicly by government prosecutors as an exhibit in Steven Ingersoll's ongoing sentencing hearing, was delivered to the Grand Traverse Academy Board 13 months before Ingersoll was indicted.
The letter revealed Ingersoll had secretly opened a second general fund bank account, manipulated financial records (with a series of furtive bank transfers) to make it appear he had repaid his massive debt in 2011, and asked the Board to characterize his $3.5 million dollar debt as a "loan" because he “needed” it.
I’ll just quote directly from the Thrun Letter, which the Record-Eagle neglected to do:
“With regard to the May 20th meeting, it was made clear by Steve Ingersoll at the outset of the meeting that he wanted the focus of the meeting to be on the handouts that he prepared.
The spreadsheet that Ingersoll wanted to focus on, which primarily outlined his proposed repayment plan, would not only memorialize $3.5 million as being the amount owed to the Academy, which we strongly recommended be verified by an independent third party, it would also require that the Academy agree to characterize this amount as a “loan” from the Academy to Ingersoll. In fact, towards the conclusion of the meeting Steve Ingersoll candidly stated that he “needed” his indebtedness to the Academy to be characterized as a loan for reasons related to his investigation and/or audit by the IRS.
Mischaracterizing this transaction as a loan would subject the Academy and potentially Board members individually, to liability on a number of levels.
Steven Ingersoll openly admitted, when asked by us during the May 20th meeting, that a conflict exists between his personal interests and the interests of the Academy.”
If you’d like to read the real story, not the Thrun Letter fiction printed in the Record-Eagle, click here.
And what about that $12,621 legal bill the Grand Traverse Academy was stuck with for services provided to Board President Brad Habermehl, who testified in October during Steven Ingersoll's sentencing hearing?
Looks like taxpayers may shell out even more dough for prepping and representing Habermehl, who sizzled on the stand for two days, like those whirling 7-11 hot dogs.
Well, the cream he just guzzled from the taxpayers (in the form of a sweet $2,100 paid to Habermehl's Vision Therapy Group for IVL examinations he'd originally pledged would be gratis) will sure help tide him over until the next round of exams.
Hey, isn't that a conflict of interest?
And you didn't read that in the Record-Eagle.
Somebody alert the media!