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Friday, June 13, 2014

INVESTMENT FUNDS, VENTURE CAPITAL & PRIVATE EQUITY...OH MY! Whose Fingers Are In the Private Equity Pie...And The Grand Traverse Academy

Miss Fortune has discovered that while Mark Noss and his Full Spectrum Management, LLC have yet to assume full control of the Smart Schools Management, Inc. 401(K) plan, his brother Luke Noss has long been involved.

Luke Noss (l), Mark Noss (r)
Gaylord resident Luke Noss, a financial advisor with Edward Jones, reportedly established the original Smart Schools Management, Inc. 401(K) on behalf of Steven Ingersoll, who remains the plan's sponsor and administrator. 

The Smart Schools plan is a defined contribution plan with a profit-sharing component and 401k feature. Edward Jonesa leader in "Workplace Retirement Savings Plans"charges a hefty front-load fee (often as high as 5 percent) for every dollar invested in the fund.

And where does that money go, you might ask?

Front-end loads are paid to investment intermediaries (investment advisors like Luke Noss) as sales commissions. It is argued that a load is a cost that investors incur for obtaining an investment intermediary's expertise in selecting appropriate funds for clients. However, it is a matter of record that load funds do not outperform no-load funds. 

Loads are bad for an investor mainly because it hurts their ability to earn more money from mutual funds. If a fund carries a 5.75 percent front load, the broker will get $575 for every $10,000  invested in the fund.

While it's difficult to determine how much money Luke Noss, a licensed securities representative, may have earned from this chunk of business thrown into his lap like a pile of squid by Steven Ingersoll, safe to say it's in the tens of thousands of dollars.

Noss's FINRA BrokerCheck report also reveals that he recently became a limited partner in Biostar Ventures III, a private equity fund. Biostar, based in Petoskey and Los Angeles, is a venture capital partnership that invests in medical devices. On June 16, 2013, Biostar Ventures III filed a Form D with the SEC, giving notice of an "offering of securities without registration" that confirmed its plans to seek $100 million for its third fund.

An examination of the most recently available Smart Schools Management, Inc.'s 401(K) Form 5500 reports reveals an average profit sharing distribution of over $225,000—per year.

The reports, covering 2009-2012, do not detail the eligible employees or the amount each individual received. And while the profit sharing distributions have grown since the Grand Traverse Academy was founded, one can safely estimate that Smart Schools has distributed millions of dollars in profit sharing.


Reports trickling in to Miss Fortune allege that discrepancies regarding Smart Schools Management's 401(K) plan's vesting schedule have resulted in forfeitures of the employer contribution share of the account. The plan's Form 5500 filings indicate that an average of 6-7 people leave employment each year before becoming fully vested.

Although each individual's contribution is immediately 100 percent vested, it appears that Smart Schools Management, Inc.'s fund's graded vesting schedule grants employees full ownership after six years—the maximum under Federal law.

In the event the Smart Schools' plan documents allow forfeitures to be utilized by its sponsor—Steven Ingersollto pay plan expenses or fund employer contributions, forfeitures are often “found money” that can help a company's cash flow. 

And since Smart Schools would have already deducted the contributions on it corporate tax return, they are not deducted a second time when allocated from the forfeiture account.

But then again, Ingersoll wouldn't have to pony up the dough again, since his dearly departed former employees left it behind for him to pick up. 

It's recycling at its greenest!


Even though he's been federally indicted, Steven Ingersoll has reportedly been opening his pie hole for anyone who'll listen, proclaiming his innocence and asserting the charges against him will be dropped.

And while others (including this blog) have speculated about Ingersoll's co-defendant Roy Bradley rolling over and taking a deal, it looks like Ingersoll's may be doubling down, working hard to take care of members of the Bradley family.

Along with Ingersoll's daughter-in-law, Gretchen, Roy Bradley's daughter, Kristy, works for Ingersoll's Smart Schools Management. Gretchen Ingersoll, who works remotely, and Kristy Bradley manage the financial affairs for Ingersoll's Bay City Academy.

And reports to Miss Fortune indicate that Ingersoll may have even hired his co-defendant Tammy Bradley to replace the Bay City Academy cleaning crew he kicked to the curb!


So there's a "media muzzle"...so what! 

Miss Fortune urges anyone who's impacted by this story to reach out and speak out.

I've confirmed that Bill Schuette, the Michigan Attorney General, is conducting an "ongoing investigation" into the money monkey business at the Grand Traverse Academy.

You can call his office or send him an email, demanding answers.

And although the Traverse City Record-Eagle's Editor, Mike Tyree, has not seen fit to do one drop of follow-up on the shocking facts revealed on this blog in just the past month, you can call his office or send him and email and ask him why.

Get in touch with Rob Clark, the Community News Director for the MLive Group, including the Bay City Times.

Grand Traverse and Bay City Academy employees: look at your 401(K) plan documents, and if you see a vesting schedule discrepancy, send a letter to Mark Noss and he'll have his brother look into it.

Don't believe for a minute that people are "not concerned" about this financial fiasco.

It's time for action—not just reaction.

If you have any questions, please send me an email at: tcmissfortune@yahoo.com

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