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Thursday, March 24, 2016

I CAN SEE CLEARLY NOW: IVL Millions...Or Financial Fraud? Read The Story The Snyder Administration Doesn't Want You To Read!

Part 3 of Miss Fortune's exclusive Kaye Mentley sentencing testimony series.

Mentley questioned by Assistant U. S. Attorney, Janet Parker:

Q. Was there a time when there was joking about lease payments being made by Smart Schools to GTA? 

A. I think there was a time when Steve talked about, you know, the large fee that he -- that Smart Schools was paying in a lease for a relatively small office, yes. 

Q. But was there any -- was that like a shared joke or how -- how was that discussion conducted? 

A. I would say more of a passing comment. I don't recall board members being overly involved in it as a joke. 

Q. But part of what -- did you understand those payments to be a vehicle for balancing the budget? 

A. Yes. 

Q. And do you know whether the payments were actually made? 

A. No. Still don't. 

I mean, I remember Mark Noss and I talking the summer or early fall of 2013, I think was about the time, I'm not positive, maybe even later than that, not understanding was all of this about actual dollars, or was it just printouts and that there weren't the actual dollars going back and forth. 

Q. Do you even known the answer to that question today? 

A. I do not.

Q. And when you said there was casual conversation which made you aware of 2.2 million being owed, who was that conversation with? 

A. Steve. 

Q. And who owed the 2.2 to whom? 

A. It was my understanding that Smart Schools owed Grand Traverse Academy the 2.2 million. 

Q. And let me clarify, when did that conversation occur? 

A. I would say in the fall of 2013 or early in the year of 2014. 

Q. And when was it that a prepay was part of the board meeting discussions? 

A. Not until after the IRS investigation, and I'm not sure exactly when. 

Q. All right. But it was at least post awareness of the investigation?

A. Yes. 

MS. PARKER: Your Honor, I don't know if you would have any questions for the witness. I think I'm exhausted for the moment. 


MR. GEHT: Thank you, Your Honor. (Recross-examination of Kaye Mentley.) 
Q. Do you recall if it was 2.2 million or 2.5 million? 

A. I could not answer that specifically. 

Q. Do you recall if it was fall of '12 or fall of '13? 

A. I could not answer that. I perhaps could looking at notes, but -- 

Q. Well, I'll make it easier. Did you submit an affidavit in this case? 

A. Yes. 

Q. Okay. You'll see that was filed on October 19th, 2015. Do you see that at the top? 

A. Yes. 

Q. Paragraph 3, do you see that? 

A. Uh-huh. 

Q. You stated under oath, On November 12th, 2012, I met with Steven Ingersoll to discuss finances and SSM owes GTA 2.5 million, do you see that? 

A. Yes. 

Q. And then on the next page, paragraph 4, On January 29th, 2013 I met, 2.5? 

A. Yes. 

Q. Does that refresh your recollection whether or not it was 2.2 or 2.5? 

A. Yes. 

Q. And which one is it? 

A. I believe it was 2.5. 

Q. And does that refresh your recollection if you discussed it in '12 or '13 -- in the fall of '12 or in the fall of '13? 

A. I think we discussed it in the fall and then again in January. 

Q. In the fall of '12, though? 

A. Whatever that said because that was based on notes I kept in my office. 

Q. I ask, Ms. Mentley, because on redirect you testified that that conversation took place in the fall of '13, spring of '14, so I'm asking, does this refresh your recollection if it was actually fall of '12, January of '13. 

A. It would be whatever is said in the affidavit. 

Q. Okay. Did you -- after you had that conversation with Dr. Ingersoll, did you go to Doug Bishop and say, hey, I just found out two and a half million dollars is owed? 

A. No. 

Q. Okay. Did you go to any board members and say, hey, I just found out two and a half million dollars is owed? 

A. No. 

Q. Okay. You were also asked about KM entries, do you recall that? 

A. Yes. 

Q. Okay. And on -- 

MR. GEHT: Your Honor, this isn't pertaining to GTA, but may I just cover this really quickly? 

THE COURT: I don't understand the subject. 

MR. GEHT: I understand. There was a brief comment made or brief line of questioning on redirect about the other surprising thing during the interview, and the witness testified that the other surprising thing was there were certain entries made in QuickBooks that had "KM" next to them. Does Your Honor recall that line of questioning, or perhaps it was too passing. It's not -- I'm -- by way of -- it is not, from our standpoint, related to GTA but it is related to the sophisticated means enhancement. May I examine on that point? 

THE COURT: I don't see how it -- 

MS. PARKER: We're not going to argue that that was part of a sophisticated means if that's what you think. 

MR. GEHT: No, but it is part -- I guess it was asked on redirect. This is -- 

MS. PARKER: She said reference to it, so I just tried to clarify what she said, but I mean -- 

Q. What is your recollection as to what the journal entries were? 

A. When I asked Steve why the initials "KM" were in there -- 

Q. Let's take a step back. Where were the journal entries made? 

A. I believe they were in a QuickBooks account. 

Q. For which entity? 

A. I think Grand Traverse Academy. 

Q. Okay. Let me show you interview of memorandum of the interview with you on June 12th, 2013, do you see that? 

A. Yes. 

Q. Okay. On the second page, paragraph 6, do you see that? Do I need to ask -- 

MS. PARKER: I can give her a copy. 

MR. GEHT: Oh, do you have a -- well, but I don't know that the Court has a copy. 

THE WITNESS: I see that. 


Q. All right. Can you read paragraph 6 to yourself first -- 

A. Yes. 

Q. -- and then I'll ask you -- 

A. But hold it still. 

Q. I'm sorry? 

A. But hold it still. 

Q. Oh, I apologize. 

A. Yes. 

Q. And I just want to -- does this refresh your recollection as to whether or not the journal entries were made in the QuickBooks for GTA or for SSM? 

A. Yes. 

Q. Okay. And to the extent that your redirect testimony was that there were adjusting entries made on GTA's books, would you agree with me that that's not what the KM entries were? 

A. Correct. 

Q. Okay. And I presume, since I know where they came from, that as you sit here today, you don't know where those journal entries came from? 

A. Correct. 

MR. GEHT: Okay. I don't have anything further for this witness, Your Honor. 

THE COURT: Any remaining questions?


Q. When you prepared your affidavit, you provided the date of November 12th -- excuse me, November of 2012 for one of your conversations with Steven Ingersoll? 

A. Yes. 

Q. About the money going from -- that he -- Smart Schools Management owed to GTA? 

A. Yes. 

Q. How did you know that was the date when you prepared your affidavit? 

A. I used a very old fashioned kind of a personal management system called a tickle file, and so often if I were observing a teacher or had a parent request a reading level of a student, I would make a note of the date that request was made and the student's name, and then I would tell the teacher about it, but then I would put that piece of paper that I had written back in my file about when I thought that that should happen, that action, and then I would go back to the teacher and make sure that that parent had been contacted about the reading level. It was the same thing, it just helped me be a little more aware of what was going on, and so I made notes of that meeting, and I put it back, I think, into February, I'm not sure, to see were those payments starting to be made. 

Q. All right. When you prepared your affidavit, then, were you referring to your contemporaneous notes of the conversation with Steven Ingersoll? 

A. Yes. 

Q. And when you were testifying here, were you referring to your notes? 

A. No. 

Q. And so if the date is an issue, what is the most accurate date? 

A. My notes and the affidavit. 

Q. All right. You testified that when you had that conversation then, and we'll go with November of 2012, with Steven Ingersoll, you did not then go to Doug Bishop or the board and report that this was ongoing. 

A. Correct. 

Q. Why not? 

A. I didn't have any relationship with finances with the board. We had a complete separation of duties. I was in charge of instruction and he was in charge of finances. 

Q. But when the IRS came and interviewed you, and you became aware of a three and a half million dollar thing on the books, you did go to an attorney and seek what? 

A. I did seek legal counsel and interact more closely with the board president and the other attorney. 

Q. Why did you do it then? 

A. I was alarmed by the IRS investigation, by the questions that they asked. I was alarmed by the journal entries with the initials "KM," and I was alarmed that the board had not received reports or conversation clarifying what that was and what was happening with it. 

Q. Going back a couple of answers, after you had that November, 2012 conversation with Steve Ingersoll, did he give you reason to think that indebtedness was being reduced? 

A. I don't recall him saying that at the time it was reduced but that he planned it to be reduced as Bay City became financially healthier, Bay City Academy, became financially healthier. They would be able to reimburse Smart Schools for a lot of the outlay that Smart Schools had done for the Bay City Academy, which would then enable Smart Schools to pay that back to Grand Traverse Academy. 
 [NOTE: Mentley describes the millions looted from the Grand Traverse Academy and conduited to the Bay City Academy as "outlay". It appears she forgot to refer to the GTA as the "golden goose".]

Q. And when you became aware of the three and a half million dollars in May of 2013, did you perceive that as having an impact on the viability of the Grand Traverse Academy? 

A. Yes, from both a publicity, public relations standpoint as well as financially. 

Q. And is the Grand Traverse Academy still in business today? 

A. Yes. 

Q. Still functioning? 

A. Yes. 

Q. And how do you feel about that? 

A. Thrilled.  



  1. Noss needs to go to jail right along with Ingersol. I cannot believe how these cons work their bs schemes into public education. It is truly remarkable that Noss is not on the hot seat yet. How could you be business partners and friends for so long and just "suddenly" sever ties when things go south? Noss is just as guilty!

    I love that Lynch is being talked about in this blog as well. He is a product of Noss and Ingersol. He commands respect at the school's he "runs" and no one respects him. I have talked to people who's children attend his schools and they absolutely can't stand him. They told me that he will shaft people in a second if it benefits himself. They said he walks through the halls like he's "perfect" in every way possible and parents are so turned off by that.

    I have also heard directly from parents at NCA that the school building is in AWEFUL shape and they have huge concerns regarding the safety of the building.

    I can't wait to see all these idiots lose their "hard earned" money.

  2. I agree with anonymous!!!! I sure as hell hope the prosecuting attorney has the same level of smarts that you do, GQU.......that's all I can say.

  3. On the same page with you! Arrogant asshole that need to be SHUT down. Blatant, Misuse of federal and taxpayers money

  4. It is really time to stop funding these school these people running the schools are crooked and the money that the state, federal and taxpayers fund is going into their pockets not into the education of children. Please stand up for this injustice and investigate and prosecute these guys. If we don't put the best interest of the children first then we are doing a disservice to our communities. Mr. Snyder and his cronies want to privatize education not for the betterment of education, but to help all his buddies get free money. Look Flint water isn't the only bad deal he has done for Michigan, ours schools are loosing funding because charters are absconding with all the grants and money. Every person in this state needs to stand up to this and get laws changed and the money back into our regular public schools where it belongs and not in the hands of these money grubbing arrogant asses.

  5. I think OSHA would be appalled at the condition of these schools. I think the unions would be terrified to know what has gone on with the teaching staffs. There should be no business running a public school, stop this destructive trend right now!