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Monday, May 1, 2017

THE COST OF CORRUPTION: The Story Of Steven Ingersoll's Traverse City State Bank Line Of Credit...Told In His Own Words!


Two of the most troublesome financial schemes approved during the last ten years by the Grand Traverse Academy's board of directors are book-ended by its current president, Lesley Werth. 

From a June 8, 2007 promissory note, signed on behalf of the board by Werth for a $474,000 loan from Steven Ingersoll's Smart Schools Management, to granting an easement agreement on June 26, 2015 to Mark Noss on behalf of his private, for-profit property development company, MDN Development, LLC, Werth and the Grand Traverse Academy board of directors collectively and individually have (in my opinion) revealed abject stupidity and a stunning lack of fiduciary responsibility to the school and Michigan's taxpayers.

To be fair, however, four out of five members of the current GTA board (Werth, Samer Bourdkani, Lea Piché and Mike Drilling) approved a May 6, 2015 board resolution that passed unopposed, giving a blessing to Mark Noss' hair-brained plan to build on the school's land, use public money to pay up to $38,000 a month to rent the building, and agree to a purchase price ($3.9 million) that was nearly $800,000 higher than Comstock Construction's project estimate.

During a 7:30am special meeting, the GTA board started a process that culminated with Mark Noss threatening to sue the school, a  clusterfuck that may have been avoided if someone (anyone!) on that board had only pulled their head out of their ass.

But that never happened, did it?

Less than one year later, like Britney, oops, they did it again!

With Brad Habermehl and Mark Noss in place, Steven Ingersoll's control of the school continued way past his official March 19, 2014 departure.

Within days of assuming control of the Grand Traverse Academy, Noss began making staggering monthly payments to Ingersoll, beginning with a pro-rated March 2014 payment of $5,241.94 combined with an April 2014 of $12,5000. 

In March of 2014, Mark Noss created Full Spectrum Management, LLC, which now operates as the management company for the GTA. 

As explained by Rick Lowe, a former accountant for Full Spectrum Management, from the time of its establishment and throughout Ingersoll’s trial and sentencing hearings Full Spectrum Management continued to pay Ingersoll $12,500 per month for use of “intellectual property”. On March 15, 2016 Lowe sent an email to board member Brad Habermehl disclosing the payments

While he acknowledged that GTA had no direct financial exposure from the payments, Lowe opined that it was inappropriate for Noss to continue using Ingersoll for advice on running a management company, cash flow management, and budgeting because Ingersoll was the subject of ongoing criminal proceedings. 

In a response, Noss acknowledged the payments, and explained that he had continued to speak with Ingersoll “for guidance with respect to regulation, compliance, and reporting, as well as the requirements of the State of MI, LSSU, and our bond issue” even though Noss was barred from contacting Ingersoll for months by a federal restraining order.

What the hell?

Former board president Habermehl later became notorious when it was revealed in federal court that he'd sent a series of emails soliciting a $300,000 loan/investment on behalf of Steven Ingersoll's new private school project — while Habermehl was a board member in late November 2014!

Habermehl's solicitation continued even after Ingersoll's March 10. 2015 conviction, telling a potential investor the project was “still a very good investment with a good return.”

What the hell?

Confronted with his secret emails in federal court, Habermehl admitted during his sentencing hearing testimony that former Lake Superior State University Charter Office head, Bruce Harger, was one of five potential investors.

What the hell?

Like they say, the fish rots from the head down.

Well, Harger's financial interest in the project certainly explained the letter he'd written to Mark Noss at the GTA on October 29, 2013.

Harger got his knickers in a twist after Traverse City accounting firm Dennis, Gartland & Neirgarth sent a letter to the GTA board on October 17, 2013 with internal control recommendations.

The recommendation that caused such a panic in Harger was a suggestion that the GTA bid out its management contract, seeking competitive bids to benchmark costs.

Keep in mind that Harger's letter came on the heels of the May 30, 2013 Thrun letter, and learning that the GTA board had paid $1,647,234 to Steven Ingersoll in combined management and curriculum fees. 

And that didn't include the nearly $260,000 that went to GTAS, LLC, an entity Ingersoll formed with former superintendent Kaye Mentley and her son, Brent Wilson, who both shared profits with Steven Ingersoll.

Even knowing that, Harger's first impulse was to tell Noss he shouldn't take that management company competitive bidding benchmarking recommendation too seriously. 

Harger later retired from Lake Superior State University in late 2015, but not before he sent that October 29, 2013 letter to Noss:

Tomorrow, in the final installment of this series, the rest of the story.

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