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Tuesday, September 30, 2014

INDIGENT: Ingersoll Co-Defendant Roy C. Bradley, Sr. Owes The IRS Over $250,000...And You're Paying For His Legal Defense!

On September 23, Roy C. Bradley, Sr. filed an ex parte motion in US District Court, requesting the court to "pay witness fees" relating to defense witnesses in Bradley's upcoming asbestos removal trial.

The filing revealed that Bradley is "financially unable to provide the fees to serve the subpoenas, or pay witness fees for the appearance of his witness" for the trial scheduled to begin on Thursday, October 2.

The court directed Bradley to file a "supplemental brief", directing him to demonstrate “the necessity of the witness’s presence for an adequate defense”, identify his witnesses and provide a brief explanation for why their testimony is necessary to his defense. 

Bradley's response included five witnesses not scheduled to be called by the government: a representative of boiler manufacturer, Cleaver Brooks; a representative from J and J Asbestos Removal; former Smart Schools employee Judy Gauthier; Marcia Demski, a consultant from the Michigan Bureau of Children and Adult Licensing; and a representative from Stephen, Moelter and Sierra Technical Services.

Late today, the government filed its response to Bradley's supplemental brief—and that "I" word comes up again: irrelevant.


The government did not oppose two of the witnesses on Bradley's list—the representatives from Cleaver Brooks and Stephen, Moelter and Sierra Technical Services.

In its response, the government objected to three prospective defense witnesses, stating that "the testimony of some of the witnesses at issue is irrelevant".

The second witness identified in Bradley's motion is a representative of J and J Asbestos Removal. Bradley stated that he "expects the representative to testify that the company removed asbestos from the mechanical room in the building at 400 North Madison, Bay City, Michigan, on August 15, 1998." 

Pointing out that Bradley and Gerald Essex are charged with illegally removing asbestos that was present in the building "as of August of 2010", the government response rejects the J and J Asbestos Removal witness, explaining that "asbestos removed by J and J before the August 2010 asbestos survey is not part of the asbestos charged in this case."

In addition, Bradley's request to include Marcia Demski, the State of Michigan licensing consultant, was rejected by the government. Demski was selected by Bradley to testify regarding a day care licensing inspection conducted at 400 North Madison in March of 2010before the building was purchased by Steven Ingersoll on behalf of Madison Arts, LLC, and well before the activities charged in the indictment had even begun.

The third prospective witness identified by Roy Bradley is Judy Gauthier, although no time frame was given regarding the testimony Gauthier would supposedly provide.

In addition, the government has not received "reciprocal discovery" regarding Gauthier's "alleged activities, such as invoices for asbestos abatement work supposedly performed pursuant to arrangements made by her as part of her employment by 

Steven Ingersoll."

In the absence of such information, the government response reveals it "is left to suspect that any asbestos abatement activities that Ms. Guathier arranged as part of her employment by Steven Ingersoll would have been conducted in response to the discovery of asbestos in the building during the execution of a federal search warrant conducted in August of 2012 or thereafter, when Ingersoll was running a school in that building."

Again, the government asserted Gauthier's activities would therefore be "irrelevant because they were conducted after the time relevant to the indictment."

Miss Fortune expects a ruling on this shortly, and will bring the details as soon as they become available.


A look into Bradley's financial picture proves he no Clarence Earl Gideon (look it up).

In the photo at left, taken recently at Bradley's Thunder Cycle Columbus Avenue location in Bay City, you can see the late model Chevy Avalanche Bradley reportedly drove, clearly showing its $4,800 asking price on the windshield.

Although the Avalanche sports a Spitzer Auto Group custom front end license plate, the truck is not listed for sale on the Spitzer website.

Looks like Bradley may be running an unlicensed used car dealership...or did he just manage to buy up a big batch of used cars?

Whatever the case, a review of Bay County property records reveals Bradley really needs some dough.

In April, three of Bradley's properties entired the tax forfeiture foreclosure process, and owes nearly $58,000 in taxes for property he owns in Bay City and Hampton Township.

A home he and wife Tammy own at 1700 Center Avenue (just a block away from Steven Ingersoll's home) has racked up nearly $9,000 in unpaid Bay City taxes. Other properties owned by Bradley and his wife are 1016 14th Street, 903 E. Indiana Street, 510 Columbus Avenue (Thunder Cycle) and 948 W. Hampton Road.


Here's the capper — even though IRS liens filed in Bay County reveal Bradley's into Uncle Sugar for nearly $250,000, he's still getting a free ride: you and I are paying for his defense.

And, even if things go the government's way this week, we'll still be paying for three hots and a cot.

Monday, September 29, 2014

"SELF-SERVING, IRRELEVANT AND INACCURATE": Federal Prosecutors Respond To September 12 Motions Filed By Steven & Deborah Ingersoll


In three tersely worded motions filed late Friday, September 26, federal prosecutors responded to September 12 motions filed on behalf of Steven and Deborah Ingersoll.

Let's break down the government's opposition, motion by motion.


The Ingersolls asked the court to order the "production of confidential informants and exculpatory information." In support of its opposition, the claims it has complied, and will continue to comply, with its discovery obligations in this case.

And, with a sharp verbal pimp slap, the government described Steven and Deborah Ingersoll’s discovery motion as premised upon "an assortment of self-serving irrelevant and inaccurate statements and erroneous conclusions."

The government reserved extra special scorn for Ingersoll's claim of shadowy "enemies", calling the allegation "simply irrelevant and inappropriately inserted into a discovery motion, apparently to garner some sympathy for the defendants." 

In his motion, Ingersoll asserted that various recordings "made by a government witness were only produced because of
repeated demands by defense counsel". Again, the government termed that characterization as "inaccurate". Ingersoll's allegation that government witness Tim Hunnicutt engaged in “shockingly
unethical conduct” was dubbed by the government "an erroneous and unfounded conclusion."

The government again revealed it "voluntarily disclosed grand
jury transcripts long before it was obligated by law", using that fact to refute the claims made by the Ingersolls in their joint discovery motion.

The Ingersolls also attempted to invoke Rovario v. United States,
353 U.S. 53 (1957), supposedly to obtain access to the identities of government informants. The government noted in its opposition that the Ingersolls "failed to recognize United States v. Perkins, in which the Sixth Circuit noted post-Rovario that the government is not obligated to reveal before trial the identities of informants who will testify at trial."

Ironically, Steven and Deborah Ingersoll acknowledged in their motion that they "know the identity of a government informant" (likely Tim Hunnicutt) and made sure to name that person by name in their joint motion. 

The government revealed the Ingersolls have already been given
Hunnicutt-related discovery containing copies of recordings, copies of correspondence, a PowerPoint presentation and his sworn grand jury testimony.

Finally, the government noted that Steven and Deborah Ingersoll claimed in their motion that they "are entitled to discovery of all agents’ reports of interviews."

The government noted "it is well-established that agents’ reports of interviews that are not adopted or approved by the witness are not subject to disclosure." 


Steven Ingersoll was charged in an April 10 indictment with an assortment of financial crimes. In count 1, he is charged with conspiracy to commit bank fraud. In count 2, he is charged with conspiracy to obstruct the IRS. In counts 3, 4 and 5, he is charged with wire fraud and aiding and abetting wire fraud. Counts 5 and 6 charge Steven Ingersoll with attempted tax evasion offenses.

Steven Ingersoll has made a motion for a "bill of particulars" regarding counts 6 and 7 of that indictment. The purposes of a bill of particulars are to inform the defendant of the nature of the charge against him with sufficient precision to enable him to prepare for trial, to avoid or minimize the danger of surprise at the time of trial, and to enable him to plea his acquittal or conviction in bar of another prosecution for the same offense when the indictment itself is too vague and indefinite for such purposes.

In its response, the government revealed that Steven Ingersoll has already been given "more than 3,100 numbered pages of discovery, plus additional discovery such as recordings and other records that are not numbered." The information includes materials that the government obtained from accountants and tax preparers who did accounting and tax preparation work for Steven Ingersoll and the entities to which he is related, records from his various bank accounts, and his own tax returns, among other things. 

The government motion states that Ingersoll's motion for a bill of particulars is an attempt "to fish for information regarding the government’s theory of prosecution, asking how the government intends to prove its case rather than what evidence will be used in the process." 

This government supports its theory by citing Ingersoll's "otherwise inexplicable pursuit of information regarding a net worth theory of prosecution, despite acknowledging in his motion that the government has told him that the attempted tax evasion charges in counts 6 and 7 are not based on a net worth theory."

The motion reveals that in addition to retaining the services of two criminal defense attorneys, (one of whom-Martin Crandall-is an extremely experienced trial attorney and the other-Jan Geht-was formerly an attorney for the Tax Division of the Department of Justice) Ingersoll has also retained the services of a forensic accounting firm. The government asserts that Steven Ingersoll "has both the information and the type of legal and accounting assistance needed to enable him to prepare to defend against the charges in counts 6 and 7 of the indictment."


Steven Ingersoll also filed a motion seeking permission to file "unspecified evidentiary motions for unspecified relief at some future but undefined time." 

The government opposition reveals it is generally understood that motions "in limine" (motions made before the trial begins) are not subject to the motion filing deadline established by the court.

The government explained that motions in limine often deal with evidentiary matters "that the court opts to defer resolving until the trial is in progress and the context of the motion is better understood." If permission "were needed to file a motion in limine after the motion filing deadline had passed", the “blank check” authority sought by Ingersoll would not appear to be an appropriate way to obtain that permission. 

On the other hand, motions to "suppress" are evidentiary motions that can and should be made before the motion filing deadline established by the court. The government opposition reveals that "no such motion has been filed by Steven Ingersoll."

The government response indicates that if Ingersoll "finds it necessary to file a motion of that or similar nature in the future, he can seek the court’s permission to file his motion at that time. If the court grants the motion to file an evidentiary motion at that juncture, then Steven Ingersoll will have the opportunity to pursue the substantive motion that he has not found reason to file to date. He should not, however, be given a blank check to file an unspecified motion for unspecified relief at an unspecified future time by virtue of his current motion." 

District Judge Thomas L. Ludington has ordered Steven and Deborah Ingersoll, and co-defendants Roy C. Bradley, Sr. and Gayle Ingersoll to appear at a motion hearing October 8 at 2:00pm.

Friday, September 26, 2014


Not the fire--the Battle Creek Police Department is investigating that mystery.

There's another mystery, one that might even stump NBC's Keith Morrison: does a perplexing video Robert Buckhannon posted over two years ago prove he and Kelly DeMoss were married in July 2012 at the Grand Hotel on Mackinac Island?

The clip, amateur cinematography clearly influenced by watching too many East German hostage videos, shows Buckhannon's son (dressed in what looks like an official Grand Hotel cater-waiter blazer) rehearsing this wedding toast:

Friends, family

Today on Mackinac Island there's magic in the air and memories in the making.

Somewhere in time, these two fell in love and today we celebrate the love that they have found, the lives they have lived and how they have touched each and every one of us in a profound way.

Looking back on how Dad met Kelly, their story is as charming as they are.

I remember the first time I saw these two together: Dad had that spring in his step I hadn't seen in years and Kelly--Kelly treated me as one of her own from day one.

Never have I met a more kind, more affectionate woman in my life and seen a couple so happy.

Although there was a little gap between then and the high school reunion a few years ago, I can see sparks fly when they are in each other's arms.

The two are head-over-heels for each other and I know that will never change.

These high school sweethearts have come a long way from big hair and vinyl records.

I'm not gonna lie--they did look ridiculous with the leather pants and mustache.

But would anybody expect anything else from the starting linebacker and teen queen cheerleader?

I'm sure my kids will say the same thing about me some day.  I just hope that I can give them an upbringing comparable to the one they have given me.

It's been an experience I wouldn't change for the world. They have taught me by example, and made me realize what is truly important in life: friends, family and living life to the fullest.

To take the good with the bad and persevere until the day is done.

Through thick and thin, they have been best friends, lovers and the best set of parents a kid could ask for.

I don't know where I would be or who I would be without their guidance and love.

To Rob and Kelly!

Well, that touching toast didn't touch on this third rail in Buckhannon's complicated marital history: if he truly married DeMoss, he may have done so while still married to Marlena Michaels!


Clark County, Nevada records show Buckhannon and Michaels took out a marriage license on May 15, 2009 and filed an "affidavit of marriage" shortly after 7:30am the next morning.

About three months after Buckhannon married Michaels, he returned to Michigan briefly for his 30th high school class reunion where he reconnected with "teen queen" and classmate Kelly DeMoss.

After an extensive search of Clark County records, I was unable to locate any evidence of a Buckhannon/Michaels divorce.

While it's possible the two divorced in another Nevada county, Buckhannon and Michaels competed together this past May in San Antonio at a "Gladiator Rock'N Run" event.


The Battle Creek Enquirer reported recently that city awarded a contract to Markos Excavating of East Leroy, paying $35,900 to demolish the crumbling building.

The bar was declared an unsafe building by the city, but remained standing while investigators from the Battle Creek Fire Department, Battle Creek Police Department and the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the fire that caused at least $1 million in damage.

Interim City Manager Susan Bedsole told the Enquirer that the city took control of demolition because the building posed a danger and it appeared "there was no insurance coverage for the cost." 

The On Deck Sports Bar opened briefly in April 2013, closing about about six weeks later. 

Kelly DeMoss and Per Wickstrom's pink-palmed nephew Stephen Anderson reportedly invested several hundred thousand dollars into remodeling the former Sports Page. (I suspect the bulk of that amount came from Anderson.)

Anderson originally sued Buckhannon on May 17, 2013 in Calhoun County's 37th District Court. Late last year, the two reached a confidential, out-of-court settlement. 

And Anderson, Buckhannon's not-so-silent partner, is still waiting for his money.

The bar closed amid allegations from Anderson that the project was over budget and that employees and vendors were not being paid by DeMoss and Buckhannon, who were operating the business.

Calhoun County court records reveal that Anderson again filed against Buckhannon on March 27, 2014 and on September 4 was granted a partial summary judgment.

Good luck getting that, and while you're waiting, maybe you can explain why a key member of the Narconon-based Wickstrom drug rehab cartel wants to own a bar.

SOMEBODY NEEDS A HOBBY! Per Wickstrom's Client Financial Services Director Mark Hergert Spends His Days Bla, Bla, Bla-ing Away! (No Wonder Collections Revenue Is Down)

In a response to a favorable consumer comment logged at his Ripoff Report  slam against yours truly, Scientologist Per Wickstrom's favorite henchman Mark Hergert demonstrates his familiarity with the Oxford English Dictionary.

Just kidding! 

Although the "screen door on a submarine" quip is clever, even a writer who learned English while watching the Three Stooges could do a better job.

From misspelling "rebuttle" and incorrectly using "to" instead of "too", all the way down to using "our butt's" in place of the plural form of that word, it's work that my grade school principal Sister Ferdinand would have kicked back to me in a second--and then kicked me down the stairs.

Hergie's been busy, developing the website he promised in an August 6 email: anitasenkowski.com. 

In his email, Hergert warned that "we are coming for you", and promised to launch "a series of websites that will certainly outrank anything you got and it won't be good for you".

In the screen capture shown at left, it appears that Hergie has indeed begun to develop "anitasenkowski.com", although the content is still offline and in development.

And, in a recent development, Hergie's Hawaiian Hideaway (AKA the corporate headquarters of Auto Credit Financial), looks like another burst balloon.

Miss Fortune has discovered that the Kailua-Kona address (75-5737 Kuakini Hwy., Suite 202) shown as Auto Credit's "corporate headquarters" is merely the real estate office of John S. Rabi, whose name appears on official Hawaiian records as the Registered Agent for Auto Credit Financial Services LLC.

And, by the looks of this property listing, Rabi is looking to convert his Typically Tropical Properties to an "agent/broker co-op".

Wonder where that leaves Hergie?


Michigan veterinarian Dr. Bruce Langlois is again battling the Michigan Department of Licensing and Regulation, fighting to keep his veterinary license.

As I'd reported nearly 18 months ago, Langlois has a long history of complaints and disciplinary actions and is a registered sex offender. 

And in news I broke just days ago on this blog, I confirmed that Langlois made a recent Spay Neuter Express visit to the Tipton County Animal Shelter in Brighton, TN where he conducted a three-day "clinic" from September 13-15. 

An official spokesperson stated in an email that Langlois was "unlicensed in Tennessee".

Thursday, September 25, 2014

A DESIGNING WOMAN: Miss Fortune "Ties" One Up!

Photo courtesy Rachel Lopez
If you think Miss Fortune's writing packs a pretty punch, just check out these beauties...eyes up here!the apron. Pinup model, and aspiring baker, Rachel Lopez is shown at left, wearing an apron I made just for her using Japanese "kawaii" fabric.

In addition to marketing copywriting, my (paid) work includes a limited edition design business, a line of pinup-style aprons I sell in my Etsy shop, "Tie Me Up Aprons".

As you can see, my aprons inspire lots of cookin'—inside and outside the kitchen! 

Customers all over the world—from China to Australia—wear my designs.

Photo courtesy Vintage Spa, New South Wales
I'll be introducing my new Christmas line, and would love to see one of my readers win their own "Tie Me Up" apron.

More details to come!

'Miss Fortune' will be back tomorrow with another blockbuster!

Wednesday, September 24, 2014

CONFLICTS OF INTEREST: A Beginner's Guide To Perception and Reality For Cheaters and Profiteers


In a letter sent yesterday to Michael Flanagan, Michigan's Superintendent of Public Instruction, Miss Fortune requested the Department of Education open an official investigation of an apparent conflict of interest violation at the Grand Traverse Academy: improperly awarding a management contract to a sitting Board member, Mark Noss.

In addition, the letter (written under my own name), urged the Department of Education to launch a forensic audit that could determine the extent of the Academy's financial impropriety, including (but not limited to) Steven Ingersoll's $2.38 million dollar overpayment to his firm, Smart Schools Management, Inc.

The Grand Traverse Academy Board recently announced that it will wait until after Ingersoll's federal fraud trial to sue Smart Schools for $1.67 million dollars—lost taxpayer funds that reportedly remain on the Academy’s balance sheet incorrectly classified as an “asset”.

In addition to submitting the letter to Flanagan and Michigan's Attorney General, Bill Schuette, I have also launched a targeted media outreach campaign developed to inform key state and national reporters and expand the news coverage begun on this blog.

I will bring you any update on state and national coverage of this story as soon as it becomes available. 

Monday, September 22, 2014


District Judge Thomas L. Ludington has ordered Steven Ingersoll, and co-defendants Deborah Ingersoll, Roy C. Bradley, Sr. and Gayle Ingersoll, to appear at a hearing October 8 at 2:00pm on various defense motions, including Ingersoll's motion to produce "confidential informants".

According to a document filed this morning in United States District Court, several other defense motions are scheduled to be discussed on October 8, including Steven Ingersoll’s motion for "Leave to File Future Evidentiary Motions" and his motion for a "Bill of Particulars".

Roy Bradley’s motion for "Severance and Joinder" in motion by Deborah Ingersoll and Gayle Ingersoll is included.

PROMISES, PROMISES: Did The Philanthropist (or the Thief) Break A "Promise To Pay"?; Ingersoll Doesn't Pay Taxes, But Transfers Property To Defendant In Bay City Academy Asbestos Case Just Days After Arraignment

The controversial $1.6 million “prepaid” is in actuality the remainder of nearly $5 million of earnings that SSM promised to pay to GTA according to its needs.

Excerpted from
"History of Grand Traverse Academy"

Miss Fortune has discovered that a "promise to pay" the Grand Traverse Academy may not be the only payment promise Steven Ingersoll has broken.

A review of Bay City property records shows that Smart Schools' macher Steven Ingersoll owes a massive amount to Bay City for the 27 properties listed above: $176,670.88. 

The total includes the "Summer 2014" taxes due from Ingersoll before the end of this year, although records reveal he has not paid Bay City any property taxes since late January 2012.

Property taxes become delinquent as of March 1st for taxes that remain outstanding from the prior year. For example, property taxes that were due in 2008 and payable to Bay City became delinquent on March 1, 2009. The portion of Ingersoll's total taxes that have been deemed "delinquent" are shown in a separate column.

The properties are owned by Ingersoll, and businesses controlled by him, under such names as Arts District LLC, Sanford Green House LLC, Banks Front Door LLC, and the Webster House of Bay City LLC.

Among the buildings with outstanding amounts due are:

-1514 Center Avenue: Ingersoll owes a $19,115.55 tax debt for the home where he lives with his wife, federal fraud co-defendant Deborah

-400 N. Madison Avenue: Bay City Academy's 'Madison Arts' campus building shows a tax debt of $19,675.99

-900 Fifth Street: Webster House Bed & Breakfast, where Bay City Academy Superintendent Brian Lynch (more commonly known as "son-in-law-of Mark-Noss") bunks when he's in town, shows a $17,857.41 tax debt.

With rooms at the Webster House going for as much as $290.00 a night, you'd think Ingersoll could find the scratch to pay his taxes.


On September 26, 2013, Steve Ingersoll signed a quit claim deed for 241 N. Farragut, deeding the "rights and interest" in the property to one Gerald A. Essex.

Quit claim deeds are legal proof of ownership when properly executed in accordance with state laws. However, quit claim deeds are sometimes used in fraudulent transfers of real estate, such as a person transferring property to a relative (or a "known associate") to avoid a lien from a creditor.

Oh, wait, Miss Fortune...Gerald Essex-that name sounds so familiar!

You are correct—Essex was the crew foreman of Roy C. Bradley Sr.’s restoration company, Lasting Impressions, in April 2010, when Steven Ingersoll purchased the former church at 400 N. Madison Avenue with the intention of converting it into a school building for Bay City Academy.

Ingersoll hired Bradley to do the renovation.

Gerald Essex was arraigned September 16, 2013 on four counts of illegally distributing and handling asbestos, a felony punishable by up to five years in prison and a $250,000 fine. 

Essex and Bradley are currently scheduled to go to trial beginning September 30 on the asbestos charges.

Roy C. Bradley, Sr. is a one of five co-defendants in Ingersoll's federal fraud trial, scheduled to begin on December 2.

And the score? I think the thief takes this round from the philanthropist.  

Sunday, September 21, 2014

MICHIGAN VETERINARIAN DR. BRUCE LANGLOIS TAKES HIS 'SPAY NEUTER EXPRESS' TO BRIGHTON, TENNESSEE: Tennessee Department of Health Official Confirms Langlois Is Unlicensed; Provides Complaint Link, Information

Langlois, Michigan Sex Offender Registry

 -MI vet, registered sex offender practices without a license in Tennessee
 -Conducts 3-day "clinic" at Tipton County Animal Control 

[For more background, read this 2013 post: The Seriously Twisted Story of Dr. Bruce Langlois]

On his website, Michigan veterinarian Bruce Langlois states he "created Spay Neuter Express to provide a mobile vet service across all areas of Michigan."

Except when he doesn't stay in Michigan.
Miss Fortune investigated an anonymous comment submitted to this blog alleging Langlois had recently been in Tennessee, and can confirm that Langlois and his Spay Neuter Express did conduct a three-day "clinic" at the Tipton County Animal Shelter in Brighton from September 13-15.

A spokesperson for the Tennessee Department of Health confirmed in an email to Miss Fortune that "our records do not show Bruce Langlois among the listings for licensed veterinarians in Tennessee."


Dr. Langlois’ 'Disciplinary Action' reports from the State of Michigan’s Department of Licensing and Regulatory Affairs indicate an extensive history of suspension and probation.

Dr. Langlois’ most recent 'Consent Order and Stipulation' on his veterinary licenses is dated February 2012. 

Langlois was accused of "negligence and incompetence", and while he "did not admit nor deny the allegations of fact and law" official Michigan Department of Health records show Langlois was fined and put on probation for one year.


As I've previously reported, Langlois is a registered sex offender with a criminal history even more disturbing than his record as a vet. Langlois is a two-time loser, with lifetime supervision by the State of Michigan. 

Langlois has served two prison terms, in 1988 and 1995, on Criminal Sexual Conduct charges.

According to official State of Michigan court records, in 1995 Langlois pleaded guilty to one count of Criminal Sexual Conduct 4th Degree after an incident with an employee. Langlois testified that he and the woman had become friends, and admitted in court that he "misinterpreted her behavior as flirtatious", also known as the "she asked for it" defense.

Langlois admitted that the incident occurred in the office while the employee was on a stool, reaching for something and he "put his hands up her shorts on her bottom in an attempt to stop the fall". Langlois went on to admit that he had attempted to put his fingers in the woman's vagina


The Tennessee Health Department spokesperson, after reading the comment left on this blog, urged those wishing to file a complaint to call the Department's toll-free Complaint Hotline at 1-800-852-2187, or use the complaint form available on its website.

Friday, September 19, 2014

THE RED HERRING REVIEW PART 2: There's Something Fishy Going On--Oh Look, A Squirrel!


Part 1-Oh look, a shiny thing! 
OVERLAP: Official documents reveal potential conflict of interest-Mark Noss continued to serve on Grand Traverse Academy board after signing two-year management contract

Part 2-Oh look, a squirrel!
OPTICS & SEMANTICS: It doesn't matter what you call it, $1.67 million dollars is gone...and the board's not lifting a finger to get it back.

The Grand Traverse Academy's recent attempt at "make it go away" crisis PR, designed to remedy the school's earlier lack of communication and transparency regarding repayment of an outstanding $1.67 million dollars owed to the Traverse City charter school by Steven Ingersoll's Smart Schools Management, Inc., has fallen far short its goal: to convince you that it's a "common accounting practice" to call a seven-figure loss a "rebate" and keep it on the books as an asset.

In an interview this week with Interlochen Public Radio, Full Spectrum Management's Mark Noss objected to the generally accepted accounting principles (GAAP) term "prepaid expense", calling it "a terrible description of what that money is."

For an optometrist, Noss is a poor judge of what politicians call "optics".


The standard framework of accounting principles, standards and procedures that companies use to compile their financial statements includes prepaid expenses. Prepaid expenses and deferred charges appear on a company’s balance sheet as 'other assets'. 

Both categories apply to a situation where a client pays in advance for a good or service. When you see the words "expense" and "charge", you might wonder how these times belong in an asset account.

Expenses belong on the income statement, right?

Well, GAAP dictate that expenses that are paid before they're due belong on the balance sheet. Whenever a company pays expenses in the current period that won't be matched with services until subsequent periods, the expense is a "prepaid expense" or "deferred charge".

Doesn't sound so terrible to me.


As the 2001-2013 financial snapshot shows (left), the Grand Traverse Academy has a history of ending its fiscal years with a "prepaid expense" balance. 

Beginning in fiscal year 2005 (ending June 30), the Academy's annual audits began to show a pattern of ending each year with prepaid expense balances that ranged from $25,882, topping out in 2013 at $2.38 million.

While the early audits may have been performed by a more compliant, less rigorous CPA firm, the Academy's 2013 audit drew much closer scrutiny of its "prepaid expense" balance by Traverse City public accounting firm Dennis, Gartland & Niergarth.

In the auditor’s report, Smart Schools Management agreed that it “owed Grand Traverse Academy an amount classified as a prepaid balance” ($2,338,980), and worked out a repayment plan with the Academy. The plan called for Smart Schools to "work off the prepayment" by “partially reducing cash transfers for future management fees through June 2016”.

Funny, I don't see any mention of a "rebate" or "pledge" or "teacher pay cuts"--just an acknowledgement by Steven Ingersoll that Smart Schools paid itself in advance for services it agreed to deliver later.

In fact, the audit also outlines the "repayment" plan agreed to by Smart Schools and the Grand Traverse Academy: in plain language, the Academy would simply deduct the $2.3 million overcharge--in three installments--from Smart Schools' expected future management fees.

 According to the 2013 financial audit, the prepaid management fee “reductions” were scheduled to be received from Ingersoll's Smart Schools Management, Inc. as follows:

2014: $774,000
2015: $960,000
2016: $604,980

However, as I revealed on this blog, the Academy board did not amend the Smart Schools Management contract to reflect the deal, neglecting to put in writing the deal that was outlined and agreed to in the 2013 fiscal audit. 


In the IPR interview, Noss claims that another management company with "no understanding of who we are" could have destroyed the school.

In addition, the story reveals that board attorney Kerry Morgan claimed that the "board did nothing wrong when it hired Mark Noss."

But according to newly-released Academy documents, obtained through a Freedom of Interest Act request, Noss continued to serve on the Academy board for weeks after he signed a two-year management contract, a potentially serious conflict of interest.

As even the appearance of conflict is a serious allegation, I have forwarded the documents, along with a link to my story, to the Michigan Department of Education for official reaction. 

I will provide an update as soon as it becomes available.


With his federal fraud trial on the docket for December 2, it's likely that we'll learn much more about Ingersoll's financial activities, including his "debt" to the Grand Traverse Academy.

So is Steve Ingersoll, the man who stopped paying his Bay City property taxes in early 2012, really a philanthropist?

Or is he just another robbin' hood?

Wednesday, September 17, 2014

THE RED HERRING REVIEW: There's Something Fishy Going On!

Part 1: Oh look, a shiny thing!

OVERLAP: Official documents reveal Mark Noss continued to serve on Grand Traverse Academy Board after signing two-year management contract; conflict of interest violation?

The idiom "red herring" is used to refer to something that misleads or distracts from the relevant or important issue. It may be either a logical fallacy or a literary device that leads readers or characters towards a false conclusion. 

A red herring might be intentionally used, such as in mystery fiction or as part of a rhetorical strategy, or it could be inadvertently used during argumentation as a result of poor logic.

Or the red herring might be a seemingly plausible, though ultimately irrelevant, diversionary tacticlike the "History of Grand Traverse Academy" posted last Saturday by the Academy's Board of Directors.

If you're expecting an in-depth analysis of this nonsensical attempt at propaganda, you're about to be disappointed: Miss Fortune held her nose and didn't follow that strong-smelling red fish down the wrong trail.

Instead, here are three things you need to know about the Steven Ingersoll controversy and its impact on the Grand Traverse Academy:

The Board's "history" does not include the June 2013 fiscal year.

The Board spent nearly 2,500 words in an unsuccessful attempt to convince readers that Smart Schools Management, in the person of Steven Ingersoll, "rendered support" to the Grand Traverse Academy that far outweighed the $2.38 million dollar overpayment during fiscal year 2013. 

Using four "methodologies" (direct donation, guarantee of debt, rebate of contractually authorized and budgeted earnings and an agreement to augment GTA’s revenue by leasing some of GTA’s facilities) the report strained credulity like a worn pair of Spanx.

Pulling a rabbit out of the hat, the report even inverts logic and claims that the "controversial $1.6 million “prepaid” is in actuality the remainder of nearly $5 million of earnings that SSM promised to pay to GTA according to its needs."

Promised to pay to GTA? I'll bet, like the so-called "repayment agreement", the Board doesn't have it in writing.

So does Ingersoll owe $1.6 million, or $5.0 million? 

Back in April, former Superintendent Kaye Mentley (who'd already met with federal investigators four times and testified in front of the grand jury that indicted Ingersoll) was quoted in the Record-Eagle saying she's "not concerned" about the $1.6 million owed by Ingersoll and Smart Schools. She went on to say that "at this time, the payment schedule that was arranged has been kept."

And while the Board recently decided to wait until after Ingersoll's federal fraud trial to sue Smart Schools for the outstanding $1.6 million, it gazes into a funhouse mirror and blurts out this line: "While GTA rightfully relied upon and expected SSM to deliver $1.6 million from its future GTA earnings; recovery remains uncertain."

What bloody hell is this? Conflating an overpayment of nearly $2.38 million dollars (accomplished in fiscal 2013, according to the Academy's official audit report) with "future earnings"?

I was born at night...but not last night.

Piling a convoluted narrative on top of the stark reality of missing a fat stack like $1.6 million shouldn't distract from the facts—unless you let it.

As outlined in the 2013 audit report, here's the real deal the Grand Traverse Academy made with Ingersoll:

In the auditor’s report, Smart Schools Management agreed that it “owed Grand Traverse Academy an amount classified as a prepaid balance” ($2,338,980), and worked out a repayment plan with the Academy. The plan called for Smart Schools to "work off the prepayment" by “partially reducing cash transfers for future management fees through June 2016”.

In plain language, the Academy would simply deduct the $2.3 million overcharge
in three installmentsfrom Steven Ingersoll's expected future management fees as follows:

2014: $774,000
2015: $960,000
2016: $604,980

Think about that for a moment. Imagine you're on the board of a charter school, and your management company has siphoned $2.3 million more they were legally entitled
directly from your own bank account.

What do you do? Do you call a cop? 

Or do you cover it up, and allow him to "pay you back" by "paying him less"?  

But what happens when you cut him loose? 

Mark Noss and His Academy Board/Full Spectrum Management Overlap/Conflict of Interest: "Forget it, Jake; it's Chinatown"

The full service educational management contract between the Academy and former Board President Mark Noss' Full Spectrum Management, LLC was supposedly "based on the uniqueness of the educational model upon which the school was founded" and, if you believe former Board attorney Doug Bishop, "urgency".

But was it really uniqueness and urgency that kept Mark Noss an active member of the Grand Traverse Academy Board for at least one month after he signed a two-year contract to manage the school...or something much more questionable?

As I reported on this blog, Noss was still president when the Academy Board voted unanimously to "withdraw from the management contract with Smart Schools Management, Inc." during an early morning meeting on March 19.

Minutes later, the Board voted unanimously to accept the resignation of "Mark Noss as the President of the Board." That motion was followed immediately by one that nominated Brad Habermehl as President of the Board.  The official March 19 meeting minutes reveal that only Habermehl abstained—Noss was among the four Board members voting "aye".

The meeting ended at 9:15 with a final motion: the approval of Full Spectrum's new management contract. Noss abstained from that vote, with three board members approving the contract and one member voting "no".

So, did Mark Noss vote to approve his own contract? 

One could argue that by voting to support the motion to withdraw from the Smart Schools contract, Noss did help set the wheels of transition in motion. 

And it's clear that negotiations for the management takeover of the Grand Traverse Academy by Full Spectrum began while Noss was still a board member.

Sometime on March 19, Academy Board member Noss and Board president Habermehl officially signed a two-year contract for Noss and Full Spectrum Management to run the Grand Traverse Academy, one that could pay him up $4.0 million dollars.

But if you thought that ended Mark Noss' tenure on the Academy Board, you'd be wrong

Although Noss resigned at the March 19 special meeting, official Board records reveal the resignation was not "effective immediately".

In a relationship that's reminiscent of a famous "Chinatown" scene, Noss' "my school board/my management company" wango tango kept right on going, at least through the April 11 meeting.

In a potential violation of Michigan's conflict-of-interest laws, Noss (the head of Full Spectrum Management) and sitting Academy board member called it in—attending the April 11 meeting via phone.

One of his last duties was adding an agenda item: approving an amendment to his Full Spectrum Management contract. The official meeting minutes indicated Noss added "8a", but the neglected to include a description or any information explaining the amendment.

Roughly one month after he was awarded a management contract, and witnessed by Lake Superior State University's charter office head Nick Oshelski and former Academy Superintendent Kaye Mentley, Noss officially stepped down from the Grand Traverse Academy Board...but not from the Academy.

I guess you can have it both ways!

June 30, 2011 and December 2, 2014

You won't read in these two dates the Academy's history, but as Ingersoll's December 2 federal fraud trial draws closer, they loom in importance.

For those of you who like to quote Gertrude Stein when you talk about a link between the Grand Traverse Academy and Ingersoll's federal trial ("there is no there there"), read this excerpt from his indictment:

All the jibber jabber about "prepaid" or "deferred" or "gifts" won't mean a thing when the feds get you on the stand.

I'll be back Friday with a final wrap-up ("Part 2: Oh look, a squirrel") of the "History of Grand Traverse Academy".