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Monday, February 17, 2020

IT'S LYING, IT'S CHEATING, IT'S STEALING: HOW “A THREE-PARTY DEAL” THAT ENABLED MARK NOSS TO OBTAIN A “VERY LUCRATIVE MANAGEMENT AGREEMENT” SANK IT'S HOOKS DEEP INTO THE GRAND TRAVERSE ACADEMY'S BANK ACCOUNT: Fraud Reverberations Continue To Rock Grand Traverse Academy; Charter School Facing Revived Civil Lawsuit By Independent Bank To Recover Nearly $900,000; Mark Noss Will Not Be Allowed To Discharge The Stunning Debt In His Full Spectrum Management, LLC Chapter 7 Bankruptcy

Here's my question to Mark Noss (and my only question): why? 

Why the hell would you agree to personally take on the obligation to repay Steven Ingersoll's nearly $1,000,000 debt to Traverse City State Bank?

Was it, as his Full Spectrum Management claimed in a response to Independent Bank's original September 12, 2018 complaint, an “attempt to deal with” a crisis sparked by Steven Ingersoll's looming federal tax fraud indictment? 

Or was it a negotiation where “the parties were deliberate, operated at arm’s length, had the benefit of counsel and negotiated details in a careful manner which is not at all consistent with acting in a rushed manner or as the result of an emergency” as claimed by the Grand Traverse Academy in a response to the Independent Bank civil complaint, conveniently forgetting that Noss participated in a dual role: as its board President and a money-horny suitor waiting in the wings? 

In my opinion, neither of these claims are well supported by the evidence.

I believe Noss was rushing to gain control of the Grand Traverse Academy, in part to continue the cover-up the significant financial fraud reported in the Traverse City charter school's annual audits since 2007 and to complete a transition initiated and stage-managed by Steven Ingersoll's before his federal tax fraud indictment was unsealed—one that included secret five-figure monthly payments to Ingersoll that began March 19, 2014, the very day Mark Noss inked his management contract with the Grand Traverse Academy.

The linchpin of Noss's defense has been his insistence that he stepped in to personally assume Ingersoll's Traverse City State Bank debt to protect the Grand Traverse Academy from the financial predation of the bank because “they consider GTA the recipient of the line of credit”. 

However, contemporaneous documents from March 2014, including a March 18, 2014 email detailing (for the entire GTA board and Lake Superior State University's charter office officials Bruce Harger and Nick Oshelski) a succession plan, reveal the main driver was Steve Ingersoll.

We now know it is likely Steve is going to jail. They are getting him for tax evasion for the pre-pay that has sat on GTA’s books they are claiming is income. SSM will no longer exist. 

I have been in contact with TC State Bank. As you will see in their document below, they consider GTA the recipient of the line of credit. They have implied that it is now GTA that owes them the balance of this debt. The media exposé will be devastating to the school. 

We must be proactive and put a new management company in place before the media gets ahold of it. I have decided to form a new management company and assume this million dollar liability to prevent this media incident and meet our obligation. 

TC Bank has agreed to transfer this liability to the new management company. 

Their stipulation is to release SSM’s collateralized 12% management fee but replace it with a 9% collateralized fee in order to provide a reasonable means of repayment. Final approval of the finance restructuring will formally take place at TC State Bank’s board meeting this morning. 

It is imperative that this be done immediately since Steve is meeting with the prosecutor tomorrow. I will keep the same support staff in place and provide a seamless transition for the board, administration, and school. 

I have been in contact with LSSU and they are supportive of the plan. I have polled the board member and they are in agreement. A special board meeting is planned for this Wednesday morning to execute this change. 

Kaye, I hope you are supportive of this. It is the best possible scenario considering the timetable and will allow for elimination of the TC State debt, avoid a potentially damaging media travesty and provide a seamless transition for students, parents and staff. I have also attached the new management contract which is identical to the one currently in place with the exception of the reduction in management fee. 

As you can see from this email exchange just days before the March 19, 2014 Grand Traverse Academy emergency board meeting, Ingersoll is deftly pulling the strings with Dan Stahl of Traverse City State Bank, especially in the telling comment in the 4:08pm email where offloading the debt to Noss will “help my wife shoulder one of the burdens she must endure”.

Stahl sent another email to Steven Ingersoll, copying Noss, setting the “Post SSM parameters” of the massive debt, even dictating the percentage rate of Full Spectrum's eventual management fee:

Once Ingersoll's indictment was unsealed, the “media exposé” Noss feared was unleashed, primarily on this blog, as evidenced in this report published two days later.

But Noss, and the entire Grand Traverse Academy board of directors, had known since at least early 2013 that Steven Ingersoll was under federal investigation for tax fraud. 

A May 30, 2013 legal analysis (produced as a result of a May 20, 2013 meeting at the Grand Traverse Academy) delivered to Mark Noss by Margaret Hackett of the Thrun Law Firm detailed the firm’s examination of Steven Ingersoll’s financial maneuvering and acts of self-dealing, revealing he took advantage of his position as the Traverse City charter school’s Chief Administrative Officer. 

The once confidential 15-page legal analysis, released publicly by government prosecutors during Steven Ingersoll’s sentencing hearing, was delivered to the Grand Traverse Academy Board 13 months before Ingersoll was indicted

Thirteen months notice—“exigent circumstances” my ass! 

The May 30, 2013 letter revealed that Ingersoll had secretly opened a second general fund bank account and manipulated financial records (with a series of furtive bank transfers) to make it appear he had repaid his massive debt in 2011

Hackett later testified on March 3, 2015 in Steven Ingersoll’s federal fraud trial that during the 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”. 

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, as he revealed to Mark Noss and the Grand Traverse Academy Board, of the ongoing criminal investigation into his finances in 2013. (In fact, Ingersoll had retained an attorney in July 2012.) 

Discussing his $3.5 million dollar debt during the meeting (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. 

Ask yourself this question: where was the legal review by the board's attorney, Doug Bishop, on the succession plan and its impact on the Grand Traverse Academy? 

Was an opinion even sought by the board, or its president Mark Noss? 

It appears the answer is likely hell no. 

I can understand why Noss was in such a rush to push this plan through to protect his covert business partner, but why were there no objections raised by anyone else on the board or at Lake Superior State University, the charter school's authorizer? 

 In my opinion, there's only one reason: this was the beginning of the GTA's public coverup, and effort to protect Ingersoll and the board from any meaningful investigation of the embezzlement of nearly $5.0 million from the Traverse City charter school by Ingersoll. 

Part 2 coming Thursday, February 20.

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