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Monday, June 8, 2020

MONKEY SEE, MONKEY DO: The Inside Story Of A Seven-Figure Bankruptcy Fraud Scam...A Story The Grand Traverse Academy Doesn't Want You To Read! Mark Noss Took A Seven-Figure Sum To Manage The Grand Traverse Academy From March 2014-June 2017, And Secretly Shoveled Much Of It To Steven Ingersoll!




Mark Noss given extension; must file response to Full Spectrum Management's bankruptcy trustee Adversary Complaint by July 1, 2020. 

Trustee asserts in April 30, 2020 complaint that while Noss maintained Steven Ingersoll, and Ingersoll's business entities, would no longer have any connection or relationship with the Grand Traverse Academy, Noss diverted nearly $1.0 million from Full Spectrum Management, classifying the withdrawals as “Owner’s Draws”, to pay to himself and directing payments from Full Spectrum to be made to Steven Ingersoll (or his related entities) for “consulting fees and/or license fees”—to the detriment of Independent Bank (formerly Traverse City State Bank) and Full Spectrum’s other creditors. 

In its theory of his tax fraud case, federal government prosecutors asserted Steven Ingersoll’s federal tax evasion charges demonstrated the truth of the sayings that “money gives power” and “unchecked power corrupts”.

In early 2014, Mark Noss and Steven Ingersoll, shown above smiling like chimps run amuck in a Meijer produce department,  successfully convinced the Grand Traverse Academy board (and, by design, the greater Grand Traverse county community) that Noss was its savior.




I didn't believe it for a minute.

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

Mark Noss sent an email to the GTA Board on March 18, 2014 advising the board members, with the guidance and support of Steven Ingersoll, of the plan formed between Noss and Ingersoll, stating “….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 ... It is imperative this be done immediately … I will keep the same support staff in place and provide a seamless transition … It is the best possible scenario considering the timetable and will allow for the elimination of the TC State debt, ... and provide a seamless transition for students, parents and staff ….” 

According to an Adversary Complaint filed on April 30, 2020 by Kelly Hagan, Chapter 7 Trustee for the estate of Full Spectrum Management, LLC, in mid-March of 2014, Steven Ingersoll and Mark Noss approached Traverse City State Bank (n/k/a Independent Bank, successor in interest by merger to Traverse City State Bank) regarding Noss taking over the management of GTA. 

Steven Ingersoll was in the midst of federal criminal proceedings for tax evasion and other alleged financial related crimes due to his financial dealings with the GTA and another charter school he was managing, the Bay City Academy. 

At the time of those discussions, Noss was president of the GTA board and Ingersoll was managing the GTA through his entity Smart Schools Management, Inc. under an Educational Provider Agreement, in which Traverse City State Bank held a security interest. 

As part of the discussions during those meetings with GTA and TCSB, Noss maintained Ingersoll and SSM, Inc. would have no further involvement or relationship with the Bank or GTA in order to avoid the “potentially damaging media travesty”, due to the fact that Ingersoll was most likely going to prison and SSM, Inc. would cease to exist. 

Due to the alleged mishandling of public funds by Ingersoll, all efforts would be made to distance him and SSM, Inc. from the GTA. 

To move forward with the “succession” plan crafted by Ingersoll, Mark Noss formed Full Spectrum Management, LLC and, in accordance with the “plan”, on March 20, 2014, Full Spectrum Management entered into a Promissory Note with the Bank in the principal amount of $925,000.00, with interest accruing at a negotiated reduced interest rate of 4% per annum, along with changed payment terms negotiated personally by Ingersoll with Traverse City State Bank’s Dan Stahl, then its SVP-Chief Credit Officer

In its March 20, 2014 Commercial Security Agreement with the Bank, Full Spectrum secured the indebtedness by all business assets of Full Spectrum Management previously held by SSM, Inc. Full Spectrum Management also pledged to the Bank, through an Assignment of Agreement as Collateral, a security interest in all its rights to the Educational Provider Agreement with Grand Traverse Academy inked by Noss on behalf of Full Spectrum Management on March 19, 2014. 

Among the bombshells revealed in the Adversary Complaint was this explosive nugget: as part of the negotiations related to Full Spectrum Management's assumption of Ingersoll's $925,000 SSM Bank debt and transitioning the Educational Provider Agreement to Full Spectrum Management, Ingersoll successfully hammered out the release of his personal guaranty of the debt. 

That's right.

Although Ingersoll was contractually personally on the hook for repayment of nearly $1.0 million to Traverse City State Bank, the Bank did not pursue repayment from him—Ingersoll slipped the noose when he delivered Noss and Full Spectrum Management.

But the Bank did not require Noss to sign a personal guarantee.

In lieu of a personal guaranty, the Bank accepted his Full Spectrum Management agreement with the GTA as collateral.

But there was a problem with that March 2014 contract: it was scheduled to expire on June 30, 2016.

The Grand Traverse Academy board handed the Bank an extraordinary gift during its September 18, 2015 meeting: without prior public disclosure or explanation, it unanimously voted to extend the term of Full Spectrum's management agreement from June 30, 2016 to June 30, 2021.

The new agreement was signed, sealed and delivered to the Bank on October 1, 2015.

And, despite statements made to the Bank and GTA by Mark Noss and Steven Ingersoll regarding Ingersoll and SSM, Inc. distancing themselves from GTA, and the $850,000 annual management fee paid from GTA to Full Spectrum Management providing an ample amount to repay the Bank debt, Noss instead began feasting at the trough. 

Less than three weeks after assuming financial control of the Grand Traverse Academy, Mark Noss began withdrawing jaw-dropping piles of money from Full Spectrum Management, classifying the stupendous cash grab as “Owner’s Draws” to pay to himself and/or directing payments from Full Spectrum to be made to Steven Ingersoll (or his related entities) for “consulting fees and/or license fees” to the detriment of the Bank and the Full Spectrum Management’s other creditors. (According to the Grand Traverse Academy's annual audit for the fiscal year ending June 30, 2015, its first full year, Full Spectrum Management was paid $850,200 in management fees.)

As an example, based on books and records Noss provided after being ordered by the Bankruptcy Court, in March, 2014 Full Spectrum, under the direction of Noss, paid SSM, Inc. a $5,241.94 “License Fee” and then in the following months of April, May, June, July, August, September, October, November and December, 2014, payments of $12,500 were paid to Ingersoll or an Ingersoll related entity and these $12,500 monthly payments continued thereafter from January, 2015 through sometime in April, 2016. 

Here are the elements of the 14-count civil fraud complaint filed against Noss by Full Spectrum's bankruptcy trustee:

-COUNT I: MDN LOAN (AND MARK D. NOSS) Noss/Full Spectrum Management loaned MDN Development $99,130, which remains unpaid.

-COUNT 2: MARK NOSS LOAN Full Spectrum Management loaned Mark Noss $28,604, which remains unpaid.

-COUNT 3: FULL SPECTRUM EYECARE AND MARK NOSS Full Spectrum Management loaned Full Spectrum Eyecare $84,632, which remains unpaid.

-COUNTS 4-6: AVOIDANCE OF FRAUDULENTLY TRANSFERRED PROPERTY OR THE VALUE THEREOF PURSUANT TO 11 U.S.C. § 544(b)(1) AND THE MICHIGAN UNIFORM FRAUDULENT TRANSFERS ACT, M.C.L.A. § 566.35(1) ─ DEFENDANT MARK D. NOSS 

Full Spectrum Management did not receive reasonably equivalent value in exchange for each of the Noss transfers. 

 COUNTS 7-9 AVOIDANCE OF FRAUDULENTLY TRANSFERRED PROPERTY OR THE VALUE THEREOF PURSUANT TO 11 U.S.C. § 544(b)(1) AND THE MICHIGAN UNIFORM FRAUDULENT TRANSFERS ACT, M.C.L.A. § 566.35(1) ─ THE INGERSOLL/SSM DEFENDANTS 

Full Spectrum Management did not receive reasonably equivalent value in exchange for the Ingersoll/Smart School Entity Transfers. 

COUNT X RECOVERY OF FRAUDULENTLY TRANSFERRED PROPERTY OR THE VALUE THEREOF PURSUANT TO 11 U.S.C. § 550(a) ─ DEFENDANT MARK D. NOSS 

COUNT XI RECOVERY OF FRAUDULENTLY TRANSFERRED PROPERTY OR THE VALUE THEREOF PURSUANT TO 11 U.S.C. § 550(a) INGERSOLL/SSM ENTITY DEFENDANTS 

COUNT XII DISSALLOWANCE OF CLAIM NUMBER 7 FILED BY MARK D. NOSS 

COUNT XIII DISSALLOWANCE OF CLAIM NUMBER 8 FILED BY MARK D. NOSS, O.D., L.L.C. 

COUNT XIV DISSALLOWANCE OF CLAIM NUMBER 9 FILED BY MDN DEVELOPMENT, LLC 

Steven Ingersoll failed to include his receipt of $12,500 per month from Full Spectrum Management, yielding $150,000 per year, in the financial information he provided the government on October 15, 2015 in response to a court order directing him to provide complete and accurate information regarding his income. 

Noss responded to a whistleblowing accountant’s March 15, 2016  email the next morning, finally acknowledging that he has “for years and continue[s] to pay a proprietary fee for IVL’s Intellectual Properties that has allowed me to use it in my solely owned clinics, as well as more recently apply it in the GTA setting.” 

It appears that was another lie. 

In her April 30, 2020 adversary complaint, bankruptcy trustee Kelly M. Hagan termed the Noss cash transfers to Ingersoll as “voidable”, classifying them as fraudulent and seeking a judgment against Noss (and Ingersoll) that would claw back the money paid by Noss to Ingersoll, in addition to legal costs. 

Looking forward to the Noss and Ingersoll responses to Hagan's complaint...I'm guessing it will be a laugh fest!

More on this story as it develops.

4 comments:

  1. Neither has taken the time to battle the grip of greed they are afflicted with, and as such will only be able to incur more flippancy with our justice system.

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  2. Wondering how 'cozy' the Ingersoll/Noss friendship is these days?

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    Replies
    1. Probably devolved into mutual ass-covering.

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    2. How true. Love your choice of words too: devolved. Hope both of their asses get exposed and they both get what they really deserve. Maybe more prison for one and new prison time for the other? That would be great for society and the public good.

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