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Thursday, July 23, 2020

PRO SE CAN YOU SEE: Convicted Felon Finds Ass With Both Hands...But Can't Figure Out How To Navigate PACER Court Database; Steven Ingersoll Just Filed An Idiotic & Arrogant Response To Full Spectrum Management Bankruptcy Adversary Complaint Where He Appears To Admit Multiple Counts Of Wire Fraud!


Ingersoll Denies “Fraudulent Transfers” Alleged By Bankruptcy Trustee, While Revealing He “Shared His Response To Complaint Composed On May 26, 2020 With Dr. Noss” 

Hold on, here it comes: all hail the return of the “philanthropist or thief” defense. 

Filing the response pro se, meaning he has a fool for a client, convicted tax cheat Steven Ingersoll initially ignored the April 30, 2020 adversary complaint filed against him, and several of his “Smart Schools” business entities, in federal bankruptcy court by Kelly M. Hagan, the Chapter 7 Bankruptcy Trustee for the estate of Full Spectrum Management, LLC, before finally filing his response on July 21, 2020.

The response reveals Ingersoll's continuing reluctance to accept reality, as he flails around like a panicked swimmer frantically looking for a pool float. 

And, most shockingly, in what appears to be a tacit admission of wire fraud, (one of seven counts alleged in the government’s April 23, 2014 superseding indictment), Ingersoll acknowleged transferring $700,000 and $200,000 from a Smart Schools Management bank account to the Grand Traverse Academy’s Fifth Third Bank account in June 2011, but didn't reveal where the money was later transferred to in July 2011.

According to the government, Ingersoll’s federal tax fraud case began in 2009 when he “caused another charter school that he owned or controlled—the Grand Traverse Academy—to advance him funds that needed to be repaid”.


Although he has yet to be charged in connection with the fraudulent conversion of nearly $5.0 million from the Grand Traverse Academy, convicted felon Steven Ingersoll admitted under oath during his sentencing hearing that he fabricated an accounts receivable scheme as financial cover for his diversion of funds from the Traverse City charter school. 

Ingersoll made the admission under oath during questioning by Assistant U. S. Attorney Janet Parker on December 9, 2015. 

In this excerpt from the official transcript, Parker took Ingersoll through a line of questioning that uncovered the method he used to steal millions from the Grand Traverse Academy. 

In short, Ingersoll paid himself his entire management fee (before he’d earned it) in a lump sum at the beginning of each fiscal year based on an estimated budget. 

At the end of each fiscal year, Ingersoll euphemistically identified his annual embezzlement as a “receivable”, then used school funds at the beginning of the next fiscal year to repay the so-called “receivable”, creating a new (and even larger) “receivable” each year:

Q. Are you familiar with the term kiting? 

A. I know what that means. 

Q. All right. What is your understanding of what that means? 

A. A bank account that is out of money gets filled with money by drawing money from another bank account that is out of money, that then creates a, you know, a negative balance over here. 

Q. Right. And then you make a draw against the first bank account to replenish the second bank account, back and forth, correct? 

A. I don't think this is quite the same, if that's what you're implying. 

 Q. Well, I'm not asking your opinion on that. What I'm asking is why does the rebate continue to grow if you're paying it in full? 

A. It was paid in full. The rebate is more a function of the operational activity through the year relative to the funding sources, that is the expenditures through the year versus -- revenues versus expenditures through the year. That's what determined the change in the rebate amount. 

Q. But the rebate continues to grow because you've paid this year's money into last year's and now have to take more to keep the process going? 

A. Well, the lion's share of the balance of that rebate occurred '07, '08 and '09 if you look at the -- 

Q. When -- I'm not asking you that. 

A. Okay. 

Q. It continued to grow. It grew -- by the time of the spring of 2012 it was $3.5 million? 

A. Yes. 
[NOTE: As of June 30, 2012, the end of fiscal year 2011-12, the accounts receivable balance actually exceeded $4.0 million dollars.] 

Q. Yes. It was smaller in the preceding year and even smaller in the year before that? 

A. That is true. 

Q. All right. So why? 

A. The revenues were insufficient to cover the expenses and the amount of rebate -- the amount of infusion against the rebate that Smart Schools was able to put in -- the rebate grew by the fact that -- that the -- whenever the management fee was shrunken from 12 percent, that added to the rebate amount so every year – 

Q. When, in your estimation, were you obligated to pay off that rebate to zero? 

A. Say the question again, please. 

Q. When were you obligated to pay that rebated sum to make it zero? 

A. I don't think there was a definite date for that. I don't think that that rebate needed to be zero at any particular date. Well, at least until the separation of the -- I mean, the agreement was that at the end -- that became a conundrum of course because the plan was for me to -- once GTA was able to pay 12 percent, essentially – 

Q. All right. Okay. I'm not sure that you're answering my question anymore. 

A. Okay. All right. 

Q. If you didn't feel that you were obligated to pay that to a zero by any particular date, what about that general accounting principle -- or government accounting principle 60 days? 

A. I was obligated to pay that within a 60-day period. 

 Q. But then you create a new one? 

A. Yeah, that's right. 

Q. Just keep creating a new and larger one each year. 

A. (Nodding head.

Counts 6 and 7 of the superseding indictment related “specifically to those advances and Steven Ingersoll’s personal income tax treatment of those transactions in 2009 and 2010.” The superseding indictment alleged that Ingersoll either mischaracterized or omitted the advances from his personal income tax returns.

Although Ingersoll falsely claimed in his July 20, 2020 Full Spectrum Management Bankruptcy Adversary response the money transferred to the Grand Traverse Academy Fifth Third Bank account came from the Traverse City State Bank line of credit, a April 23, 2014 superseding indictment filed in Ingersoll’s criminal case disputes that assertion (evidence of which was presented in court during Ingersoll's trial), documenting the diversion of $704,000 of construction loan proceeds from a $1.8 million USDA-backed Chemical Bank construction line of credit to Madison Arts, LLC to finance construction of the Bay City Academy—tracing the money from Chemical Bank directly to its ultimate end in the Grand Traverse Academy's Fifth Third Bank account.

The government alleged the bank fraud conspiracy began when Steven Ingersoll submitted a $704,000 draw request to Chemical Bank supported by Roy Bradley’s certification of construction work at the Bay City Academy's Madison Arts campus.

“On April 23, 2014, a superseding indictment was filed, charging Ingersoll with conspiracy to defraud a financial institution (Count 1), conspiracy to defraud the United States and the Internal Revenue Service of the Department of Treasury (Count 2), wire fraud (electronic funds transfer of $704,000 of construction loan proceeds from the Madison Arts account to Roy and Tammy Bradley’s construction company’s account) (Count 3), wire fraud (electronic funds transfer of $704,000 of construction loan proceeds from Roy and Tammy Bradley’s construction company account to Gayle Ingersoll’s business account) (Count 4), wire fraud (electronic funds transfer of $704,000 of construction loan proceeds from Gayle Ingersoll’s business account to Steven Ingersoll’s personal bank account) (Count 5), tax evasion for the 2009 calendar year (Count 6), and tax evasion for the calendar year 2010 (Count 7).” 

After diverting approximately $932,000 from the Chemical Bank loan, Steven Ingersoll then transferred $704,000 to Roy Bradley and Tammy Bradley’s construction company’s credit union account. 

Tammy Bradley then transferred $704,000 to Gayle Ingersoll’s business account. 

Gayle Ingersoll then transferred the $704,000 to his brother Steven Ingersoll and wife Deborah Ingersoll’s joint, personal bank account at Fifth Third Bank. 

Once the $704,000 was in Steven and Deborah Ingersoll’s personal account, Steven Ingersoll was able to use that money to partially repay the Grand Traverse Academy.

But Mark 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, and that Ingersoll admitted owing the charter school a $3.5 million-dollar debt that he asked to be characterized as a “loan” because he “needed” it.

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. 

The May 30, 2013 letter revealed that Ingersoll had secretly opened a second Grand Traverse Academy 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 during Steven Ingersoll’s federal fraud trial that during that 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 transferred $700,000 to GTA so that GTA would not have a large amount of missing funds at the end of the fiscal year. Ingersoll knew that a budget deficit would trigger additional state oversight.” 

“Notably, the June 30, 2011 transfer—of $700,000—continued on to Grand Traverse Academy (“GTA”). This transfer from Steven Ingersoll and ending at GTA was not the repayment of a shareholder loan, but rather a convenient way for Ingersoll to return funds to Grand Traverse Academy before the close of the fiscal year. The government maintains that Ingersoll had previously taken funds from Grand Traverse Academy without board authorization, and that he used those funds to finance the Bay City Academy project. The transaction on June 30, 2011—in which Ingersoll returned money to GTA—was a way for Ingersoll to avoid detection of his unauthorized use of GTA funds.” 

In his response, Ingersoll (along with Noss, the Chang and Eng of charter school fraud, inseperably linked) kicks off with a broadside attack against bankruptcy trustee Hagan:

Kelly M. Hagan, Chapter 7 Trustee for the estate of Full Spectrum Management, LLC {hereafter, “Plantiff”} in an effort to characterize the defendants as nefarious actors makes numerous unsupported, false, reckless and defamatory assertions before proceeding to base her 148 point complaint on three foundational pillars: 

1. Noss, et. al was rendered insolvent at the time of or as the result of the various challenged transfers; 

2. The intent of the transfers was a nefarious scheme to hide assets; and 

3. There was no reciprocal value received for the transfers. The complaint is without merit as all three pillars are false. 

1. Each and every cited transfer was executed at a when FSM’s assets far exceeded its liabilities. 

Upon initial execution of its contract to manage GTA, FSM held the value of that contract which was equal to 9% of GTA’s total revenue, not to exceed $2 million dollars annually. The value of that initial five-year contract was approximately $850,000 per year. Having met timely without exception its approximately $100,000 annual debt service and $150,000 per annum IVL intellectual property license, FSM was at no time even close to insolvent as the Plaintiff so recklessly alleges. 

2. Plaintiff, without one bit of supporting evidence, shamefully alleges that FSM’s expenditures were to hide assets from the Bank. As FSM was in compliance with all terms of its loan at the time of all transfers cited in the complaint, the Plantiff’s unsupported allegation of malintent is not only reckless and shameful but moot. 

Ingersoll continues: For the Plaintiff and its putative bank partner to allege that FSM and by extension GTA received no reciprocal value for the IP license with Smart Schools is outrageously false, unprofessional, shameful and mean-spirited deserving of sanction by the Court.

The Plaintiff falsely alleges in number 23 that “Defendant Ingersoll” was indicted “due to his financial dealings with GTA”. 

This is a false and defamatory allegation. Ingersoll was never charged for any crime regarding his management of Grand Traverse Academy. It is irresponsible and offensive for an officer of this Honorable Court to introduce into the public record false and defamatory accusations. 

Tomorrow, rebuttals to Ingersoll's assertions.

6 comments:

  1. Thank you, Miss Fotune, for all the research, diligence and perseverance in continuing to expose this fraud and the crook behind it all.

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  2. Hope the crook hangs himself with his own words and arrogance("appears to admit multipel counts of wire fraud"). You could not have used better words than "idiotic and arrogant." That's his true (selfish) self.

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  3. Hope he trips himself up some more and takes his entourage with him.

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  4. I would think that any bank, credit union, financial institution wouldn't want Ingersoll or Noss to even do business with them, even a checking account.

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  5. Looks like he was doing IVL Math, graduate level course 704 and eventually his IVL PhD - Pile Higher and Deeper of Money and Psychobabble explanations and "IVL philanthropy".

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  6. One wonders how much rehearsing Ingersoll did during the Federal trial and how much rehearsing he has continued to do to try to cover his ASSets and obligations not to mention his need to not be responsible for that bank loan that Noss "absorbed". Hope the GTA nails both of them.

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