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Monday, May 5, 2014

THE STUFF THAT UNICORNS ARE MADE FROM: Miss Fortune Responds To Grand Traverse Academy Board Member's Comments

The cover-up is always worse than the crime.

If you don’t believe me, just ask former New York Congressman Anthony Weiner...who learned the hard way.

The disgraced dong-tweeter’s vehement denials brought more attention to his Twitter handle, “@Carlos Danger”, before Weiner confessed to “inappropriate” exchanges with six women before and after getting married.

Mixed and contradictory denials from various representatives of the Grand Traverse Academy, sounding like the musical notes of a Jack-in-the-Box, have popped up lately in an attempt to change the face of this extraordinary news story.

Miss Fortune’s recent post, a short profile of new GTA board member Patrick Daly, has certainly set local tongues wagging.

One tongue, planted firmly in cheek, belongs to Mr. Daly himself.

In his comment, Mr. Daly takes Miss Fortune to task, reminding her that in a town the size of Traverse City, there are bound to be many people who know Mark Noss’s son-in-law, Brian Lynch. Daly also chided me for mistakenly reporting that his wife, Erica, is still teaching at the Grand Traverse Academy—a mistake I promptly rectified.

Daly objected to being “dragged into an imaginary conspiracy by a cowardly muckraker without a clue”, and claiming that he “may have to leave the Board” as a result of the exposure.

Miss Fortune takes Mr. Daly at his word when he attributes his “genuine respect and admiration for every one of those hard working teachers and the impressive graduates they nurture from beginning to end” as the impetus for joining the board.

But here’s where we disagree: Mr. Daly believes that revealing Grand Traverse Academy information on my blog only serves to “imperil the reputation of the school, which victimizes students and teachers alike”.

In other words, blame the whistleblower and her exposé for creating the problem. If you don’t like the bad news, then “shoot the messenger” for being the bearer of that news.

If you are in a position of authority—charter school board members are public officials who’ve taken a constitutional oath of office—and you know about a possible crime, then you are more complicit than the criminal if you fail to report it, or help cover it up, or worse -- participate in the crime.

The people to whom we entrust our system -- our civil servants, law enforcement, our educators -- they must be vigilant in the discharge of their responsibilities, because when leaders in our communities encounter potential criminal activity and do less than they should, they compromise our trust.

If a public official fails to act with intention in investigating the misappropriation of millions of taxpayer dollars, we lose faith, not just in that public official, but in all public officials. The public official who did nothing will have betrayed those of us who count on the system to protect us.

That’s because the cover-up is always worse than the crime. It’s one thing to be guilty of doing something wrong; it’s another other issue completely to be a deceiver, trying to hide the truth from the public.

The $2.3 million dollar management fee overcharge by Steven Ingersoll, buried in the Academy’s 2013 financial audit report but hiding in plain sight on its website, is a critical issue because the missing money is public money—it belongs to all of us.

And it appears that the Grand Traverse Academy’s board may not have taken the proper steps required after discovering that Ingersoll had “prepaid” the whopping multi-million dollar fee, and “withheld” its repayment.

The wide discretion and authority given to Ingersoll and Smart Schools in administrating the Academy’s finances appears to have been exacerbated by inadequate internal financial controls.

Once the overcharge was discovered, quick action on behalf of the disputed taxpayer millions could have mitigated this disaster.

-Depending on the facts and circumstances of the disputed financial transactions, I believe that the board should, at a minimum, have suspended Ingersoll’s Smart Schools pending an investigation. Why Ingersoll wasn’t stripped of all authority, control and access to the Academy’s accounts (i.e., bank accounts, line of credit accounts, payroll accounts, and other accounts Smart Schools had access to) is a mystery.

-The board should have notified all financial institutions that are involved with the Academy so that financial institutions take proper action.

-Instead of arranging a “you’ll take less over three years until you pay us back” scheme with Ingersoll, the board (on behalf of taxpayers) should have engaged accountants for a forensic accounting to discover the true extent of the missing money. Ingersoll’s federal fraud indictment alleges that part of the $934,000 he diverted from a construction loan was used to “reduce his indebtedness to the Grand Traverse Academy” from advances Ingersoll had “made to himself from funds belonging to the Grand Traverse Academy.”  Swift action may have prevented Ingersoll from “reducing his indebtedness” with funds acquired by fraud—an asset recovery that the feds have revealed they intend to pursue.

It’s still unknown, maybe even by the board, how much taxpayer money Ingersoll advanced to his Smart Schools account from Grand Traverse Academy accounts, and how much he repaid.

-The board should have contacted the police to report the fraudulent action. Although the Academy may not have known the extent of the true loss, police could have begun an investigation.

-Contact an outside attorney. Under certain instances, an attorney can seek court intervention to freeze the ill-gained assets.

-Notify the Academy’s insurance carrier if there is  ‘employee dishonesty’ or ‘forged instrument’ insurance coverage so that the insurer begins its internal process.

Daly accuses Miss Fortune of ginning up a controversy, creating an “alleged scandal” so that I can sell “a lot of blog posts”. I would ask Mr. Daly to compare the amount of money I’ve made from my blog—$0—with the millions of state and federal taxpayer dollars Steven Ingersoll has “advanced” to himself and is currently “withholding” from repayment and tell me who’s holding a bigger sack of cash.

Regular readers of this blog will remember my coverage of the David Lee Hunter fugitive chase, or the revelations about Per Wickstrom and his tottering empire of Narconon-related drug clinics. In addition, my coverage of the Robert Buckhannon/On Deck Bar & Grill case has often outpaced paid media. 

And who could forget international man of mystery Zia Shlaimoun?

But Mr. Daly is right about one thing: I do fear for my safety. A few months before David Lee Hunter was captured, he called me at 1:40am—he knew my name, had found out where I was living, and told me he always carried a gun.

Mr. Daly’s brittle comments are simply an old technique often used to distract: a smokescreen.

It appears that Steven Ingersoll used “those hard working teachers and the impressive graduates” of the Grand Traverse Academy like human shields in his financial fraud, but Mr. Daly already seems resigned to throw in the towel and just give up.

If he wants to leave the board and not get “dragged into an imaginary conspiracy by a cowardly muckraker without a clue”, then maybe he should.

You know what they say, don't you? 

If you can’t stand the heat, then get back in the kitchen.


  1. Hello Miss Fortune, Andy McFarlane here.

    I want to say that while I applaud you for your interest in uncovering the truth and your obvious thoroughness, I find your methods and your attack on a man I know to be good and decent to be reprehensible.

    You wrote that Pat's wife Erica is a teacher at GTA. She is not. You corrected your inaccurate headline, and then you rewrote your entire article without acknowledging your wholesale changes. Investigative Journalism? Far from it - it's not even fair. You cast a web of slander and then waved it away with a digital brush.

    You wrote that Pat is good friends with Brian Lynch, whose crime appears to be working for a company that was founded by a man under Federal indictment. In addition to the guilt by association with guilt by association Pat is guilty of, he has somehow learned the "secret handshake"?? What is that even?

    Are you even aware of what you're saying? You slandered a person you didn't care to learn about with no cause, in error and then whitewashed over your error by claiming some higher calling to the Truth.

    There likely is corruption in this case but when you spew lies and innuendo around with no care for the consequences, you are little better than the National Enquirer or any cheap tabloid.

  2. My word…Invoking Wienergate, tongues & cheeks, jacks-in-boxes – I’m afraid you’re Freudian “fugue” has reached a fever pitch.

    As you are a skillful artist of slinging innuendo – I say we turn it up a notch tonight. I think your readers would like to know EXACTY what it is you think I am guilty of. I know I’m on pins and needles.

    Please be succinct, so there’s no mistaking your allegations.

    But….before you do, please consider the following. I met Mr Ingersoll ONE TIME 5 or 6 years ago (for about 45-60 minutes) while playing basketball. Consequently, I have also met Barbara Bush, John Engler, Antonio McDyess, ½ of the Harlem Globetrotters and even shared a high five with Willie Nelson once upon a time.

    Until being asked about the board position in late March of this year, I was unaware of any investigation associated with Mr Ingersoll or Bay City Academy.

    So, let’s have it.
    We’re waiting…….

  3. To Mr. Daly and Friends,

    I am unclear on the issues and need enlighting. Meeting Dr. Ingersoll, Mrs. Bush and the Harlem Globe Trotters is exciting. Even if Mr.Daly had met Pope Francis or Mother Theresa, his personal meet and greets have nothing to do with the current situation at Grand Traverse Academy.

    In taking his words at face value, Mr. Daly accepted a Board position when it was offered to him out of respect for the school. His action is admirable, not a crime.

    Mr. McFarlane claims Mr. Lynch is guilty of the crime of accepting employment from Dr. Ingersoll. Certainly, taking on a new job is not a crime.

    The unfortunate sticky point in the GTA mess is Daly's and Lynch's associations with each other or to the GTA Board of Directors.

    The actions of the GTA Board of Directors (the members in place in February, 2014) are questionable.

    The facts have not all come out. It is known the Ingersolls has been indicted and GTA funds are associated with the federal charges. According to GTA's records, prepayment of management fees to Smart Schools Management has been going on for years. It is known the Board did not follow its own written procedure for hiring a new management firm when Smart Schools Management recommended the severing of ties between it and the school. It is known the former board president resigned his position, quickly started new management company, and is now managing GTA. It is known Mr. DeYoung resigned his Board position midterm. It is known new members have been sworn in. One of those members is Mr. Daly.

    Questions remain as to:

    1. Why the Board ever allowed a contract which provided for prepayment of management fees?
    2. Why the Board not take immediate action when it realized that Smart Schools Management was being overpaid by thousands of dollars?
    3. Why the Board did not take action legal action when they learned that Dr. Ingersoll was writing checks to himself out of corporate accounts?
    4. Why hasn't the Board been open about what school services have been reduced or cut due to Ingersoll's misappropriation of funds?
    5. Why hasn't the Board been open about how they plan to recoup the misappropriated funds and what school services will be reduced or cut if the funds are not returned?
    6. Why hasn't the Board been open about how they plan to pay the hefty legal fees associated with this scandal?
    7. Why did the Board not follow its due diligence practice in searching for a new management firm?
    8. Why didn't the Board take a pro-active approach to informing GTA families of the Ingersoll scandal instead of having them learn about it from the media?
    9. Why has the Board stayed silent on the Ingersoll scandal other than having Doug Bishop, the School's attorney, address any questions related to the matter?
    10. Why didn't the Board take actions to wipe the slate clean and start fresh with all new members who have no affiliation to Dr. Ingersoll?
    11. Why did the Board choose to not tell its new members of the feds investigation of Dr. Ingersoll before the members took office?
    12. What else is the Board of Directors covering up?

    Perception is reality.

    Top officials step down when faced with corporate scandals. The Target CEO stepped down in light of the credit card fraud. The South Korean Prime Minister stepped down in light of the ferry sinking.

    The perception is the GTA Board of Directors has not acted in the best interest of the school nor the children they serve. Appearances make the Board look slimy, and possibly corrupt. Staying silent on matters and bringing on members who are at all affiliated with Dr. Ingersoll continue to perpetuate the impression that the Board is slimy.

    No, Mr. Daly, I don't see where this is about you or your friendship with Mr. Lynch. There is no crime with honest friendships.

    It's the friendships between dishonest people and the actions they take that lead to speculation and spur controversy.

    A TC Parent