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Monday, November 30, 2015

GLOVE UP! An Open Letter To Michael Moore From Miss Fortune


Congrats, babe!

Looks like your talent for self-promotion has catapulted you back into the news...and just in time to promote your new movie! 

That Syrian refugee bit — genius!

Who cares that governors don't have the authority to bar Syrian refugees from their states, even Michigan's Governor Rick “I never met a falafel I didn’t like” Snyder! 

Sure, the power to accept refugees lies exclusively with the feds, but your #MyHomeIsOpen hashtag is trending, and you've got everyone talking about you and your new movie, “Where To Invade Next”.

But here's the thing: now that you've again got the media breathlessly reporting your every burp, fart, scratch and utterance (“Tarantino!”, “MPAA!”, “White Terrorist!”), there's a story right in your backyard — literally — that could benefit from your attention.

The story has three elements I know you love: a scheming villain, sacks of missing public cash and (awww) kids. It's the criminally underreported story of Steven Ingersoll's looting of (at least) $3.5 million dollars from the Grand Traverse Academy, and the apparent complicity of the charter school's Board of Directors.

And I've already created a pithy hashtag: #StevenIngersollStoleMillionsFromMichiganKids.

Here's the backstory, as they say in Hollywood. And glove up, cause this one's nasty!

2007-2012: At the beginning of each fiscal year, Steven Ingersoll advances (in a lump sum), his annual Smart Schools Management/Grand Traverse Academy management fee.  Although based on Board-approved preliminary budget figures, Ingersoll’s management fees are later adjusted downward after actual budgets are calculated. However, Ingersoll withholds the difference each year during this six-year period and does not return the money to the Academy.

Instead, Ingersoll books amounts the owed to the Grand Traverse Academy as “accounts receivable” from Smart Schools Management, and Ingersoll’s balance grows from $538,864 on June 30, 2007 to $3,551,328 by June 30, 2012.  The Academy makes no attempt to demand repayment from Ingersoll until 2013, although official court records filed during his federal tax fraud case confirm Ingersoll does make a $704,000 payment to the Academy on June 30, 2011 using money diverted from a $1.8 million dollar Chemical Bank loan he obtained for renovation of his Bay City Academy.

For years, the Grand Traverse Academy carried Ingersoll’s growing debt on its books, characterizing it variously as either a receivable, a related party receivable or a prepaid expense. 

However, a May 20, 2013 Academy board meeting with attorney Margaret Hackett turned the worm.

Hackett, a Grand Rapids attorney representing the Grand Traverse Academy board, testified during Steven Ingersoll’s federal fraud trial in Bay City that during a May 20, 2013 Academy board meeting, Ingersoll asked the board to characterize his $3.5 million dollar indebtedness to the charter school as a “loan”.

Hackett testified that she was retained in 2009 by former Academy board president Mark Noss. Although Hackett did not describe the work performed, court documents indicate she later produced a legal opinion in a letter described in court documents as the “Thrun Letter” just days after the May 20, 2013 meeting.

Hackett's letter, dated May 30, 2013, turned out to be a bombshell legal opinion.  The letter was followed by another on June 13, 2013 — a “demand letter” sent to Steven Ingersoll by another Grand Traverse Academy attorney, Doug Bishop.

The Bishop letter said his firm had been “directed by the Board to make a demand for immediate payment of all amounts due from
Smart Schools Management, Inc. and/or Steve Ingersol (sic). These amounts include, but are not necessarily limited to, any amount formally designated as a receivable on Grand Traverse Academy’s financial statements.”

Bishop continued, saying in the letter that “the amount due is at least $3,548,319.00, which, to our understanding, was a figure calculated by Dr. Ingersol (sic) as indicated to be due as of June 30, 2012.”

When asked by the prosecution why Steven Ingersoll needed to have his debt “recharacterized”, Hackett said Ingersoll told her he “needed the sums characterized as a loan for reasons related to an IRS investigation and/or audit.”  Ingersoll was clearly aware of the federal criminal investigation into his finances.

Discussing his $3.5 million dollar debt (and referring to spreadsheets detailing the sums he had transferred from the Grand Traverse Academy's accounts to his personal bank accounts and those of Smart Schools Management), Hackett said Steven Ingersoll told those in the meeting that he “could not afford to pay that (his Academy debt) and his taxes all at the same time”, and needed to have the debt characterized as a loan.

The government alleged the so-called “inculpatory statements” made by Steven Ingersoll on May 20, 2013 were evidence that showed Ingersoll’s involvement and his guilt.

Hackett explained the structure of Smart Schools Management, Inc. (owned and operated by Steven Ingersoll) and its 2013 business relationship as the Grand Traverse Academy’s “contracted management company.” When asked by the government if the Grand Traverse Academy, as a public school academy, was even allowed to make a loan, Hackett said no.

Saying that the Grand Traverse Academy had “no legal authority” to loan money to Steven Ingersoll, Hackett explained that Michigan law prohibits a public body, like the appointed board of a charter school, from making any loans.

Under cross examination by Ingersoll's defense attorney, Martin Crandall, Hackett said among those attending the May 20, 2013 were it’s former board president Mark Noss, former Superintendent Kaye Mentley and its auditor, CPA Tony Henning.

When asked by Crandall to describe Ingersoll’s demeanor during the meeting, Hackett said that at times Ingersoll “seemed to be challenging the sums owed.” Admitting that Ingersoll’s request was the first time his debt was asked to be considered a loan, Hackett stated that the debt had been variously characterized in Grand Traverse Academy financial audits as either  “accounts receivable or a prepaid expense.”

Asked by Crandall to describe the amount Ingersoll owed, Hackett described the $3.5 million dollars as a “significant unauthorized transfer of funds.” Crandall asked whether or not the Grand Traverse Academy “audited the books”, and Hackett stated the Academy did perform an annual audit of financial statements provided by Steven Ingersoll’s Smart Schools Management.

Explaining it was not a forensic audit, Hackett said the school’s authorizer, Lake Superior State University did not audit the Academy as part of its oversight. In addition, Hackett said while both Lake Superior State University and the Michigan Department of Education both “look at” the audit, neither are allowed access to Smart Schools Management’s financials. In addition, she added that the federal Department of Education would only be able to audit any federal funds paid to the charter school.

Crandall asked Hackett the reason for the May 20, 2013 meeting, and Hackett stated that Mark Noss had asked for the meeting (which lasted about two hours) on behalf of Steven Ingersoll since Ingersoll indicated that he “wanted to explain his view of his indebtedness” to the Grand Traverse Academy. Hackett met with Noss and Mentley separately for approximately an hour after Ingersoll left.

Under redirect examination by the prosecution, Hackett explained the difference between a “forensic audit” and an audit of financial statements as performed at the Grand Traverse Academy. While a forensic audit digs into underlying documentations (bank records, invoices, etc.), the audit performed at the Academy used financial information provided by Smart Schools Management, Inc. on behalf of the Academy.

Reiterating her “substantial unauthorized transfer of funds” description of Ingersoll’s $3.5 million dollar debt, Hackett explained that any “authorized transfer” by Ingersoll would have been made pursuant to the Academy’s authorized budget. 

And did this Thrun letter make the Traverse City Record-Eagle?


Or the Detroit Free Press?

No, again.

So who covered it?

Just me, Mike, the same person who broke the news in 2014 of your impending divorce — nearly three weeks before the national news media. (Hey, somebody had to do it!)

And with Steven Ingersoll scheduled to be sentenced next week (December 8), there are nearly 1,200 kids swirling through the halls of the Grand Traverse Academy — a charter school lacking a library and the victim of a multi-million dollar heist.

Sure would be pleased to see this hashtag in your next tweet: #StevenIngersollStoleMillionsFromMichiganKids.

And if you'd like to get in touch for more information, Deb has my email address.

Toodles. sweetie. Have your people call my people.

Anita Senkowski
[AKA 'Miss Fortune']