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Wednesday, December 23, 2015

THE "CONS-DO-IT" THEORY: Notes On A Scandal















In bed together...while they screwed the taxpayers! 

How is it that a sitting Michigan charter school board president can reveal under oath in federal court that the head of the university charter school office that oversaw his school and a convicted felon who'd managed the school for nearly fourteen years were "perusing" a business deal with him...and it doesn't make news

(Except here, of course!)

Why would Lake Superior State University's Bruce Harger (whose LinkedIn profile is shown at left) compromise the education of Michigan's students just to make a buck? 

Could this mean Harger was paid to look the other way during the years Ingersoll rooted his way through the Grand Traverse Academy's bank accounts like a truffle-hunting hog?

If so, who else was getting off-the-books cash from the Ingersoll gang?


And who are the other two mysterious "investors", and what connections do they have to the Grand Traverse Academy board... and Steven Ingersoll? 

In this excerpt, taken from the official transcript of Brad Habermehl's December 8, 2015 testimony during Steven Ingersoll's sentencing hearing, Miss Fortune reveals exclusive, never-before-told details of Habermehl's behind-the-scenes effort to raise funds for a "private school" project -- email activity initiated by Habermehl after Ingersoll's indictment that continued well past his federal tax fraud conviction.

Beginning in November 2014, Grand Traverse Academy Board president Brad Habermehl covertly solicited a $300,000 investment "loan" from a business associate for a potential "private school" project on behalf of his "friend and colleague" Steven Ingersoll, with Habermehl admitting only after Ingersoll's conviction that he was one of the project's five partners. 

After Ingersoll was found guilty in U. S. District Court on March 10, 2015 on two counts of attempting to evade or defeat tax and one count of conspiracy to defraud the United States, Habermehl continued to pitch the school project, touting the $300,000 loan as a "very good investment with a good return." 

In the most shocking email, (dated March 15, 2015, five days after Ingersoll's conviction), Habermehl flatly denied knowing about what he termed Ingersoll's "trouble" when he initiated the investment solicitation back in November 2014. 

But contemporaneous reporting in the Traverse City Record-Eagle appears to refute Habermehl's claim.

Habermehl was quoted in the April 11, 2014 edition of the Record-Eagle, telling the paper he'd just learned of the charges against Ingersoll that day, and claiming that "declining MEAP scores" prompted the Grand Traverse Academy board's decision to sever ties with Ingersoll's Smart Schools Management.

However, in his March 15, 2015 email to a business associate, Habermehl claimed that Ingersoll's conviction "has no effect on this school project", even though Ingersoll was still one of the project's five partners.

From the official transcript, with Habermehl's responses italicized, and my comments in red.


BY MS. PARKER:

Q. And even after he was indicted, back in November of 2014, you were trying to join with Steven Ingersoll and other people in finding funding for a private school?

A. Correct.

Q. Who else was involved in that endeavor?

A. It was just myself and Steven Ingersoll. We were looking at the possibilities of obtaining funds to open up a private school in Bay City. Because of the indictment, because of the problems that we had with funding, it was definitely dropped but hopefully some day will happen. 

[NOTE: Habermehl implies Ingersoll's indictment halted the fundraising. But, as you'll see later, that was not the case.]

Q. Well, you had a group of five people that you were working with, didn't you?

A. The two key people were myself and Steve. It really didn't go much farther than a couple of weeks and some inquiry and phone calls.

Q. Well, who were the other three people?

A. I don't know. To me it was just myself and Steve Ingersoll that was looking into doing that. I'm not familiar with other three people or anyone else who was involved in looking at buildings and looking at financing. [NOTE: Here it comes.]

Q. Show you what's been marked as Government's Proposed Exhibit 575. Is that an email that you sent?

A. That is an email to my friend John Reigle.

Q. All right. And the last paragraph of that deals with this investment proposal that you had?

A. Correct.

MS. PARKER: Your Honor, I offer Government's Exhibit 575.

MR. GEHT: No objection, Your Honor.

THE COURT: Received.

BY MS. PARKER:
Q. All right. In the last paragraph of this email – Your Honor, could we have it turned on so it will display, please -- you wrote that there were five investors, correct? 



[NOTE: Parker hands Habermehl a copy of his March 15, 2015 email to Reigle.]

A. Correct. There was five people that were looking at investing in this school project at the time.

Q. And you and Steve were two of them?

A. Correct.

Q. And you said one of the investors just retired from Lake Superior State University?

A. Correct, Bruce Harger.

Q. All right. And so Bruce Harger was a potential investor in this?

A. Correct. 

[NOTE: Habermehl admits that Harger, the former head of Lake Superior State University's charter school office--and the authorizer of the Grand Traverse Academy--was a "potential investor".]

Q. And what was the date of this email?

A. March 15, 2015.

Q. That was even after the guilty verdicts were returned in this case, correct?

A. That is -- I'm not sure. When was the date of the guilty verdict?

Q. All right.

A. I don't know the answer to that.

[NOTE: On March 11, 2015, Habermehl commented on the verdict to the Traverse City Record-Eagle, claiming 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."]


Q. Okay. March 15th, fair enough, though?

A. Oh, March 15th, 2015, right on the email.

Q. You said in this you "approached as an investor with more than $300,000 in collateral?" Was that your collateral or whose collateral was it?

A. That was Steve Ingersoll's collateral.

Q. So he had represented to you that he had $300,000 that he could invest in this project in -- even in March of 2015?

A. Correct.

Q. What was your understanding of the form of that collateral?

A. That it was in real estate.

Q. Do you know where, what kind?

A. I don't know the specific addresses of the real estate, but there was -- there was both commercial buildings and there was also a bed and breakfast, but I don't know the exact addresses, nor did I visit them.

Q. All right. I'm -- again, I'm not asking you for the exact addresses, but your understanding was this was then money that was in the form of real estate?

A. Correct.

Q. All right. Not cash assets?

A. Not to my knowledge, it was real estate.

Q. What were the terms that Steven Ingersoll was operating -- offering, excuse me?

A. I'm sorry, repeat the question.

Q. Well, let me put it this way: In this email you're looking for an investment, correct?

A. We're looking for a loan.

Q. All right. Somebody to loan money to invest in this proposed business, correct?

A. Correct.

Q. And how much was -- money were you seeking on behalf of the project?

A. $300,000.

Q. And do you recall what the terms were that Steven Ingersoll was proposing for the repayment of that $300,000 loan if it were to be made?

A. It never came to that. We just knew we had $300,000 in real estate that we could put up as collateral, and we were looking to see if we could get a loan that would take that collateral. It never came to fruition. It just never happened. The whole thing just died.

[NOTE: Terms? What terms?]

Q. I'll show you Government's Proposed Exhibit 576. This, again, is an email that you wrote?

A. That is correct.

Q. And it was regarding this project?

A. Yes.

Q. And this was in November 24th, 2014?

A. Correct.

MS. PARKER: Your Honor, I offer Government's Proposed Exhibit 526.

MR. GEHT: No objection, Your Honor.
 

THE COURT: Received.

MS. PARKER: Excuse me, 576, I misspoke.

MR. GEHT: Still no objection.

MS. PARKER: Thank you.

BY MS. PARKER:
Q. In this email did you outline the terms?

A. We were fishing for those terms. It was an offer that I made to John, again, just to see what he was able to come back with. That is

what we started off with; and, again, his response back to me was that this was not an option. They weren't interested in this type of a loan.  
[NOTE: The November 24, 2014 email proposed terms, stating that "my friend and colleague, Dr. Steve Ingersoll, is looking for a $300,000 loan to be paid back annually over a 3 year period which will include interest." Habermehl also claimed in the email that "Steve single handedly built Grand Traverse Academy Charter School in Traverse City."]
 

Q. All right. But didn't it say the terms were that he would borrow $300,000, he being Steven Ingersoll, and he would pay it back over a three-year period?

A. That was our proposal, yes.

Q. With interest?

A. Correct.

Q. And he offered to pledge a bed and breakfast house in Bay
City as collateral with that?

A. Correct.

Q. So there was indeed discussion of the terms?

A. There was -- those were the terms that we were – had offered to see if that was a possibility to receive a loan from investors that John Reigle knew. John Reigle responded to us that this isn't something that they were interested in.

Q. All right. But is it your understanding, then, that Steven Ingersoll represented to you that the bed and breakfast was sufficiently valuable that it would secure a loan of $300,000?

A. Correct.

Q. Your Honor, I'm handing the exhibit, Government's Proposed Exhibit 577, to the witness. Do you recognize that?

A. Yes, I do.

Q. Is it basically a copy of the email which is in 576 with the addition of an email from Steve Ingersoll to you also dated November 24th, 2014?


A. Correct.

MS. PARKER: Your Honor, I offer Government's Proposed Exhibit 577.

MR. GEHT: No objection, Your Honor.

THE COURT: May I ask -- it seems to me perhaps collaterally relevant to the issues, but maybe at most collaterally relevant. Why are we pursuing this proposed transaction with the witness?

MS. PARKER: Well, for a couple of reasons, Your Honor. If I -- I'm almost done, but one of the things that I think -- if you view the contents of Mr. Ingersoll's email, I think it is relevant to one of the issues before the Court regarding sentencing. I would submit to the Court, by way of proffer, that Mr. Ingersoll has represented this same property as worth $180,000.

THE COURT: Okay. I appreciate your point.

MS. PARKER: May the exhibit be received, Your Honor?

THE COURT: It is.

MS. PARKER: Thank you.

BY MS. PARKER:
Q. All right. In this email to you, Steven Ingersoll recited the proposed terms of the loan that you were attempting to obtain for him?

A. Correct.

Q. And in that he said that the Webster House B & B was recently valued at 1.1 million?

A. Correct.

Q. Subject to an existing mortgage of $175,000?

A. Yes.

Q. And that would be pledged as collateral for this loan?

A. Yes.

Q. And did you believe Steven Ingersoll when he told you that?

A. Yes.

Q. And did you have any question in your mind regarding the information that Steven Ingersoll provided you regarding this proposed financial transaction?

A. No.
[NOTE: On December 27, 2014, roughly one month after proposing Ingersoll's "terms" to Reigle, Habermehl was quoted by the Record-Eagle, telling the paper that Ingersoll's "ordeal" had left the Grand Traverse Academy "stronger".  Referring to the write off of $1.6 million owed by Ingersoll, a move that drove the school into a deficit, Habermehl called out the auditors for labeling the amount "prepaid".


"It makes it sound like (Ingersoll's company) Smart Schools was paid funds they hadn't earned yet. This wasn't the case. There was nothing happened with the finances that we were ashamed of or discredits the school in any way."]


THE COURT: Passing the witness?

MS. PARKER: Pardon?

THE COURT: Passing the witness?

MS. PARKER: Yes, I am, Your Honor.

THE COURT: Sir. Mr. Geht.

MR. GEHT: Yes.

REDIRECT EXAMINATION BY MR. GEHT:

Q. Good morning, Dr. Habermehl.

A. Good morning.

Q. Could you take a look at Exhibit 575 real quick.

A. Yes.

Q. Last paragraph, first sentence, "There are currently five investors that are perusing the school project", is that what it says?

A. Yes.

Q. Okay. Did it get -- aside from you and Steve, did it get beyond perusing for the other three?

A. No.


Let this stand as Miss Fortune's plea for an investigation into this scandal.

See you next year!

23 comments:

  1. Don't you wish you could get a dollar for every page view on your sight?!? Enjoy your weekend!

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  2. my mom said she would buy a subscription if you were to write a column

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  3. Well who else would be in on this? Could it be the companies that now run the school's? The chartering university LSSU? What do you think?Ingersoll owned the companies that ran the school's correct? Now the business associates and friends of Ingersoll, own the companies that run the school's and are board preseidents, superintendents correct? Doesn't that sound rather corrupt? Weren't they suppose to get rid of anyone involved with Ingersoll? If they did that, they would have to start first with all new individuals from the board, the presidents of the board, the management companies, the chartering schools, the cleaning companies, building leaders, lawyers, accountants gheez I don't think it is really possible to do that. Well guess these schools need to be SHUT DOWN to get rid the crocks. Or maybe the government could come in and take over and run them like they should be run. Michigan Department of Education needs to help out here. Laws need to be created to change how these schools are run. Any money taken in from grants or the government needs to be controlled by the state just like all the other schools. Time to put some kung fu moves on these bad boy,s chop chop and never let any of them be in the business of educating children ever again. You want clean slate close em down..chop chop

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  4. Now hear me out because this sounds like this is really a case of a bunch of individuals trying to cover each others proverbial butts and steal money right under our noses. Will they get away with it is my question!

    Grand Traverse Academy officials get together with Ingersoll and he wants to change the money he owes them to a loan because he is being investigated by the feds. He admits he owes them at least 3.5 million. He gets indicted for other crimes associated with his other charter school, Bay City Academy.  During his sentencing hearing they uncover all kinds of other crimes that involve Grand Traverse Academy. And it sounds like all his buddies(everyone connected to GTA and BCA) are in on the whole plot and willing to commit  perjury for this man.  Wow I bet this thing is way bigger than we realize..hint hint.

    When each one of them realize they could be accused of being part of the whole plot they SAY they are going to sue for the money Ingersoll owes Grand Traverse Academy. Now we know he admitted to owing at least 3.5 million but is that the real figure? Or is the amount enormously larger?  We don't know do we? Then GTA  backs off on the suing Ingersoll and tell us what a great man he is and Kaye Mentley is the problem. Personally, I want to know how much she got paid to quietly be thrown under the bus, so that they could point the blame elsewhere. And get this, no one really knew he was cooking the books? Really, I don't believe that, do you?

    And presently, during his sentencing hearing they uncovered that these guys are trying to pull money together with Ingersoll to start another school that would be lucrative for all of them. And Mr. Hager, one of the investors, under oath can't remember who the other three guys that are going in on this deal with them are? But then does reveal one name the guy that retired from the University that charters Ingersoll's schools. Ingersoll, Harger, Habermehl, Mentley, Noss, Lynch and who else is in on this? I smell a bunch of rats. Don't you?  This is ridiculous when does it stop. I ask you why isn't a full investigation of this mess being done?

    And now his good ole boys and girls are going to sue Ingersoll again?  Wait a minute. Seems to me the Grand Traverse Academy officials are just running a scam on everyone. We will pretend like we are going to sue to make it look like we aren't in on the Ingersoll's scam and then maybe the Feds let us go and we can start another school and keep ripping off the state, the feds and the taxpayers. Do they think the judge is stupid? Do they think that we don't all see through their charade? This whole thing is way bigger than any of us realize. At the moment I don't know what else to say, think I will go open a present with my kids, at least I know the money spent on these gifts wasn't stolen from the government or anybody else, I earned it legally. Merry Christmas!

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    Replies
    1. I believe that this remark "Mr. Hager, one of the investors" was a reference to Brad Habermehl, and not Lake Superior State University's Bruce Harger.

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    2. Love the picture of the shark in the water! That shark could have multiple meanings with these people:

      1) They're all sharks.
      2) Maybe someone will find a 'loan shark' for Mr. Ingersoll?
      3) They attack the innocent (people and students), devour taxpayer money like a shark.

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  5. "I and Steve are two of the five…" "To me it was just myself and Steve Ingersoll that was looking….." "There was five people that were looking at investing in this school project at the time." Good God. This Board President can't even speak proper English and he's out running a publicly funded academy. Is this what the voodoo Integrated Visual Learning (IVL) "curriculum" gets you?

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    1. You're absolutely right. The grammar, subject-predicate agreement are awful and not even acceptable for a middle school student. Not only is he the Board President of a multi-million dollar public-funded academy, he has a doctorate in optometry! Maybe we can attribute all these errors and slaughter of the English language to his being very nervous in the 'hot seat'. And has anyone else thought that maybe the $300,000 'loan' was not for helping struggling students but rather a loan to pay for Ingersoll's upcoming and mounting legal fees for his and his family's/colleagues trial (Habermehl was initially trying to secure the loan before the Federal trial)? Maybe since Habermehl and Ingersoll didn't get the 'Fabulous Five' investment quintet, the money was eventually secured by a Future Advance Mortgage from Geht's Traverse City law firm just before the February 10th beginning trial date. And when Habermehl continued to solict funds after the guilty verdict on March 10th, maybe it was because even more money was needed for legal and other fees? Or perhaps that was the money needed to help Habermehl learn proper English? Voodoo IVL Curriculum and Vodoo IVL Finances and Habermehl's Voodoo English.

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    2. What I find fascinating and appalling all at the same time is that twenty-one years later (remember as TC Miss Fortune wrote earlier, Noss and Ingersoll co-copyrighted IVL in 1994), Integrated Visual Learning (IVL) has still never been peer reviewed or validated. If it's so great, why is that? And why are taxpayers footing the bill for this "curriculum" with no proven benefit to the tune of hundreds of thousands of dollars per year? In Kaye Mentley's sworn affidavit from October of this year, she said, "Only a small number of students, approximately 5% received out-of-classroom instruction based on Steven Ingersoll's Integrated Visual Learning method. Integrated Visual Learning is a teaching method and learning technique rather than a curriculum."

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  6. I'm so glad there are so many good people speaking up thank you everybody.Me myself and I is 3 right?

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  7. I truly believe that Noss and Lynch are very much so involved in all of this crap. It's just a matter of time before dirt is dug up on them.

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    1. Can't wait for all of Noss's dirt! There should be a lot of it, especially since he and Ingersoll were buddies since Ferris State and optometry school. Lynch hasn't been part of this too long unless you count his years as a teacher at the GTA and the relationship (oop, I mean nepotism!) there since the very beginning. His dirt should be since he became the superintendent at the BCA and then the co-owner of a management company. But there will definately be a big enough pile of dirt... let's get some shovels and continue digging! There are a lot more stories to tell...and we're grateful Miss Fortune has and will continue to dig up some more scoops! We all need to back her!

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  8. Brian Lynch has got to be tied into this through family favors from Noss. How can pieces of the puzzle fit in so perfectly to literally have no credentials as an educator and simply be handed this "Mitten Ed Management" company (or whatever you call it)

    How can Lynch be so comfortable with paying himself so well and not having basic supplies at the schools he manages? It takes a serious level of a&$ hole to accomplish that.

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    Replies
    1. Great observations! You're so right - how can Lynch be paid such a high salary with lapsed and/or no credentials and the school/students are lacking basic/minimal supplies (that the teachers often buy them out of their own pockets)? Must be the new financial IVL/Ingersoll/Noss Math that is driving this greed. They should all be ashamed of themselves. How can they look in the mirrors in the morning and continually see those lies and that level of greed? With Ingersoll and Noss, they seem to have gotten very used to it and any spec of proper conscience has long been gone. They believe they're 'helping' so many students that they are entitled to every cent they rob of taxpayers.

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  9. I am so glad that people are starting to see that this story is bigger than any of us can imagine. And that everyone of them are involved, it is a financial bonanza to them. They don't care about educating your children.

    And what about the newspapers? There are no newspapers out there writing about this. Is it because it is so complicated and they can't comprehend it or maybe they don't want to damage the charter school profiteering, or maybe they are being told they can't write about it? I don't know? I wonder what it really is, don't you? Thankfully, Miss Fortune is keeping us informed. People need to talk about this and we need to make everyone aware of what is going on. Big business is trying to profit from education. They want to get rid of unions that protect teachers and children and take all the money and stick it in their pockets. This is not about educating children this is just a money venture and greed is their business motto. I am sure all the other charter schools don't want this publicity out either. But the fact of the matter is everyone should be jumping on board and exposing these crooks. If we don't it will continue and get worse. We all need to be proactively involved and be part of the change we want to see. Talk it up, pass it on, create awareness!

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  10. Of course Lynch is tied to all of this, he is Noss's son-in-law, Noss is just making sure his daughter and grandkids are getting taken care of. They don't care whose lives they affect or the education of children. They just care about money and livin the life!

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  11. Great investigative reporting Miss Fortune, your passion for the truth is heroic and your skill in executing the information is brilliant.

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  12. As a former parent at BCA, I always knew when Lynch was there because there was his Audi parked in the lot full of teacher cars.

    The staff at BCA always had this look that a cloud was over their head. They were over worked, overwhelmed, and completely underpaid. The staff turnover was a huge problem as well. I always felt so bad for the teachers.

    The reason why I left was not because the teachers weren't of quality, but because the system that placed Mr. Lynch so far above everyone else was corrupt and not fair.

    It truly makes me sad for the teachers and kids. Mr. Lynch's day will come when they shut his business down. Hopefully his ego will deflate when that happens as well.

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    Replies
    1. Thank you for speaking for so many others. Many staff were/are so dedicated and didn't /don't deserve the headaches associated with the BCA.
      Maybe a cloud will come over Mr. Lynch's head when he may have to testify against his father-in-law, Noss, and maybe even against Ingersoll. Not only will the business shut down, his bank account will shut down too.

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  13. I was a former parent at NCA in Mancelona as well. The staff there was absolutely amazing and the stuff they accomplished with no supplies was remarkable.

    Teachers that are forced to work in classrooms with no supplies should be honored and have pay increases.

    I also saw a cloud over the teachers heads at NCA as well. Every time I was there when Brian Lynch was there he would just sit in the office. When I spoke to him, there was no connection at all. It was as if he thought he was better than everyone else.

    I felt bad for the staff as well. I can remember when my child came home and said they never had a text book and the teacher had to teach everything from handouts that they made themselves.

    The best part about that school was the staff. The worst part about it was how it was managed. That's why we left.

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    Replies
    1. Maybe Lynch was too busy counting money (that he didn't earn) and had lessons in not connecting with parents/staff because he took his cue from his father-in-law, Noss, and from Ingersoll - great role models for arrogance and deceit?

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  14. Perfectly spoken! I thought it was always taboo messing with the church,you reap what you sow...

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