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Friday, December 1, 2017

DIRTY LITTLE $ECRETS: Following The Paper Trail

There really is a paper trail.

During April 2015, with the assistance of one or both of the principals of “Mitten Educational Management, LLC” (a Michigan Limited Liability Corporation formed on April 10, 2015 by Michael Randel and Brian Lynch), Steven Ingersoll took the remaining $20,971.81 from his Smart Schools Management, Inc. 401(k). 

That money was rolled by Randel or Lynch into a newly-established American Funds 401(k) account under this name: “MITTEN EDUCATIONAL MANAGEMENT 401K FBO STEVEN INGERSOLL”. 

Why did Mitten Educational Management initiate and execute that 2015 401(k) fund transfer on Steven Ingersoll’s behalf —before Mitten had even been awarded a management contract for Ingersoll’s Bay City Academy charter school—when Ingersoll had already successfully managed two prior transactions himself? 

In my opinion, the amount taken by Steven Ingersoll as a distribution from his Smart Schools account was not the only cash that ultimately ended up in new Mitten Educational Management account set up “for the benefit of Steven Ingersoll”. 

It is likely that Ingersoll’s distribution was enhanced by an undisclosed amount covertly provided to Ingersoll by Randel, Lynch or both, money paid to Ingersoll as a quid pro quo for the duo’s newly-formed firm being awarded a six-figure annual contract as the new Educational Service Provider for the Bay City Academy—a charter school Steven Ingersoll founded in 2011. 

How can I safely reveal my considered opinion that money may have changed hands when the new management company “inherited” a hefty contract from Ingersoll? 

Simple: because it happened one year before at another charter school Ingersoll managed, with Brian Lynch’s father-in-law, Mark Noss, the one making those clandestine payoffs. 

In early March 2014, Steven Ingersoll set into motion a plan that, if it had succeeded, would have allowed him to continue exerting control over the Grand Traverse Academy, build a long-desired expansion at the school and pay off a massive business debt he owed Traverse City State Bank (TCSB) before he was indicted by federal prosecutors on tax evasion and fraud charges. 

On July 27, 2012, five months after Steven Ingersoll renegotiated his $989,825 Traverse City State Bank line of credit debt, he hired Bloomfield Hills-based criminal defense attorney J. Terrance Dillon. Dillon would later be replaced by Detroit-based Martin Crandall and Jan Geht, who'd both represent Ingersoll during his 2015 tax evasion and conspiracy trial. 

By early March 2014, Ingersoll had rejected a plea deal, choosing instead to go to trial. 

Having renegotiated the repayment terms of his TCSB line of credit debt with Daniel J. Stahl, the bank’s Senior Vice President of Commercial Lending, in late February 2012, Ingersoll then engineered a remarkably swift off-loading in early March 2014 of that obligation from his Smart Schools Management, Inc. to Mark Noss, then president of the Grand Traverse Academy’s board of directors. 

A contemporaneous string of emails from March 2014 among Steven Ingersoll, Mark Noss and Dan Stahl revealed a deal was struck on March 16, 2014 for Noss to assume the obligation to repay Ingersoll's outstanding debt, days before the GTA board formally voted to sever ties with Ingersoll and award a management contract to Noss. 

Mark Noss was formally awarded a management contract during an early morning meeting of the Grand Traverse Academy board on March 19, 2014. 

With three days to go before Mark Noss even ascended to the seat of management at the Grand Traverse Academy, Ingersoll had already negotiated the restructuring of a new deal, with Noss assuming the obligation to pay the $925,000 balance of a $1,000,000 line of credit loan originally made by TCSB to Steven Ingersoll's Smart Schools Management, Inc. 

Noss began making $12,500 monthly payments directly a Smart Schools Management, Inc. account at TCSB controlled by Steven Ingersoll shortly after he assumed control of the GTA, with the first payment (April 17, 2014 for $17,741.94) including a $5,241.94 March 2014 payment—prorating that five-figure monthly cloak-and-dagger amount to the exact penny. 

Noss began making those payments to Steven Ingersoll shortly after his newly-formed Full Spectrum Management, LLC was awarded a no-bid contract to manage the Grand Traverse Academy. (That contract set Full Spectrum Management’s minimum annual compensation at $650,000 and capped it at $2,000,000. Noss was paid over $850,000 during the fiscal year ending June 30, 2015.) 

Forced in March 2016 by a whistleblower’s disclosure to finally acknowledge the payoffs, Noss claimed that he had continued to speak with Ingersoll “for guidance with respect to regulation, compliance, and reporting, as well as the requirements of the State of MI, LSSU, and our bond issue” even though he was barred by a federal restraining order from contacting Ingersoll during the early months of 2015. 

On July 27, 2012, five months after Steven Ingersoll renegotiated his $989,825 Traverse City State Bank line of credit debt, he hired Bloomfield Hills-based criminal defense attorney J. Terrance Dillon. 

Dillon would later be replaced by Detroit-based Martin Crandall and Jan Geht, who'd both represent Ingersoll during his 2015 tax evasion and conspiracy trial. 

By early March 2014, Ingersoll had rejected a plea deal, choosing instead to go to trial. 

With three days to go before Mark Noss ascended to the seat of management, Ingersoll had already negotiated the restructuring of a new deal, with Noss assuming the obligation to pay the $925,000 balance of a $1,000,000 line of credit loan originally made by TCSB to Steven Ingersoll's Smart Schools Management, Inc. 

That's what we know. 

Here's what we don't know: exactly how much money was transferred by Mitten Educational Management into that American Funds Service Company, Inc. account established solely for “the benefit of ” Steven Ingersoll? 

Did the amount exceed the $20,971.81 401(k) distribution Steven Ingersoll stated on his 2016 federal financial disclosure form? 

Why did Mitten initiate and execute the 2015 401(k) fund transfer on Steven Ingersoll’s behalf when he'd successfully managed two prior transactions himself? 

Where did the money go after the account was closed on April 30, 2015? 

Did a trusted insider serves as the registered financial advisor who executed the transaction on Mitten Educational Management's behalf?

Who closed the account, how was the money distributed and where did that money go? 

And, finally, did the suspicious timing of this transaction—the Ingersoll/Mitten 401(k) financial activity occurred between its formation on April 10, 2015 and April 30, 2015 although a formal transfer of Smart Schools Management’s 401(k) plan to Mitten Education Management did not occur until January 1, 2016—have any connection to Mitten Educational Management receiving a contract to manage the Bay City Academy, a transaction formally announced by the charter school's board on April 29, 2015?

Epilogue:
On December 14, 2016, one day before he was sentenced to 41 months in federal prison by United States District Judge Thomas L. Ludington, Steven Ingersoll (who successfully convinced this federal judge his broke-ass was too strapped to pay the cost of “a fine, the costs of incarceration and the costs of supervision”), miraculously scrounged enough cheddar to pay the $13,623.54 his Webster House Bed & Breakfast owed in delinquent Bay County property taxes. 

Where did that money come from, and why didn't Ingersoll use it to pay his federal fine?

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