Aerial view of campus and building complex of Grand Traverse Academy, 1245 E. Hammond Road, Traverse City, developed by Steven Ingersoll over the past 15 years. SILVER BULLETS? Ingersoll Fraud Case Said Hanging Over Charter Schools
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Nationwide media attention will be fixated on the charter school "industry" because of a criminal trial next month in Bay City, Michigan.
Former Bay City optometrist Steven Ingersoll, noted for his system for re-mediating learning disabled children and his development of the 1,200 student Grand Traverse Academy, and Michigan charter schools all will be on trial beginning Feb. 10 in Federal District Court in Bay City.
Final pretrial conference is slated Jan. 16.
Federal Judge Thomas Ludington will preside at the prosecution of Dr. Ingersoll, 61, in what is said to be the most serious federal criminal case involving a Michigan charter school since the state legalized charter schools in 1994, according to the Michigan Department of Education.
Trial of Ingersoll and partners on federal bank fraud stems from alleged misuse of a portion of a $1.8 million line of credit Ingersoll obtained from Chemical Bank in 2011 to convert the former Madison Avenue Methodist Church to a school.
Steven Ingersoll, his wife Deborah Ingersoll, Gayle Ingersoll, Roy C. Bradley, Sr. and Tammy Bradley are charged with bank fraud conspiracy charge in count 1 of the April 27, 2014 superseding indictment.
In count 2, Gayle Ingersoll is charged with his brother Steven Ingersoll and Bradley with conspiracy to obstruct the IRS.
In count 5, Gayle Ingersoll is charged with Steven Ingersoll with wire fraud and aiding and abetting wire fraud.
Leagle.com also reports that Ingersoll is charged with two counts of tax fraud or evasion, and states:
"Defendants assert that Mr. Tim Hunnicutt, (a former Ingersoll employee), 'played detective' and secretly recorded several of his conversations with other third-parties. They further explain that 'based on the surreptitious way Hunnicutt made recordings of conversations with Dr. Ingersoll without government oversight, there is reason to believe other individuals were likewise consorting with Hunnicutt and feeding the government information in efforts to ruin Dr. Ingersoll personally.'
"Steven Ingersoll makes general allegations that he has made "powerful and determined political enemies" that have "strong financial and political interests in undermining the charter schools," though, again, it is unclear if Mr. Hunnicutt is one of these political enemies."
Because of an incident at the court Dec. 23, Gayle Ingersoll will not be permitted to contact any person who may be a witness for the government in his upcoming fraud case, Judge Ludington has ruled.
Gayle Ingersoll, described in court documents as "a man of substantial bulk," reportedly attempted to serve unauthorized subpoenas on two government witnesses and was said to have "lain in wait for them" in the courthouse stairwell. However, Judge Ludington rejected the government's motion to revoke his bond.
Another government motion requests that bonds for both Deborah and Steven J. Ingersoll "be modified to include conditions that prohibit them from contacting, directly or through another person other than the defendant's counsel of record, the people identified in the government's witness lists for United States v. Ingersoll, et al, and United States v. Bradley."
As the controversy over charter schools in Michigan rages, James A. McKimmy, former superintendent of the Midland Intermediate School District, is urging added support for public schools using research-based learning processes.
McKimmy, a partner in Professional Contract Management, Inc., who holds a PhD. in Education from Michigan State University, commented on a Jan. 8 article in the Bridge Magazine about the controversy:
"Now comes the claims of individuals and corporations advancing silver bullets that will resolve all of our problems students face in communities; armed with unrestricted Charter School laws they claim public funds to implement their untested theories.
"How did we slip up and allow our legislators to be so duped by the profit motive that our children have been put at risk by these new public policies when we could have been guided by the vast understanding of the educational processes by established bodies of research."
The Bridge article by Chastity Pratt Dawsey spotlighted Optometrist and businessman Steven Ingersoll, founder of Smart Schools, Inc., charter school management company and several schools which use his theory of Integrated Visual Learning (IVL).
"Upcoming fraud trial for school operator hangs over charter school industry," Bridge headlined.
Advocates of IVL say it is a successful treatment for learning disorders such as Attention Deficit Hyperactivity Disorder (ADHD) and say a study by Ingersoll shows 90 percent of the 54 students tested were weaned off the prescription drug Ritalin.
http//thecenterformichigan.net, http://bridgemi.com
According to the article, Ingersoll used some of the money to repay advances he had received from the Grand Traverse Academy. The federal action led to severance of financial ties between Smart Schools, Inc., and Grand Traverse Academy, which was left $365,000 in deficit and on the state list of 55 districts in the red.
Ingersoll's attorney, Jan Geht, said the problem with Michigan's charter school law is that it does not allow charters to seek funding from taxpayers for buildings.
He said Ingersoll took on debt and rebated management fees to finance the multi-million dollar Grand Traverse Academy that enrolls about 1,200 students in Traverse City.
Attorney Geht said there was nothing improper, noting that no agency found any problems with the school's finances since it began in 1999. He said the school owes Ingersoll's Smart Schools, Inc., $2.2 million.
"Grand Traverse Academy Moves Through Year of Turmoil," headlined the Traverse City Record-Eagle.
The article relates how Flint optometrist Brad Habermehl is now chairman of the academy's board, stating: "A local charter school is starting a new year with a new outlook, a new superintendent, a new school board, a new management company."
The new contract for Grand Traverse Academy is with Full Spectrum Management, run by optometrist Mark Noss who helped develop the curriculum and is supportive of Ingersoll.
The article also relates that the school is now in deficit because it had to write off $1.6 million that Habermehl said Ingersoll had promised to the school.
Although Habermehl said "all deals are off" with Ingersoll, he said the school's board "was definitely appreciative of Steve's philanthropy and help staying out of deficit." The school doesn't expect repayment and won't pay Ingersoll's company anything further, he told Bridge.
The Academy opened in October 2000 in a building still under construction. After the school's original developer, Floyd Schecter, lawyer and real estate developer of Nashville, Tennessee, quit the project, the Academy purchased the building from Comstock Construction.
Kaye Mentley, a founder of the school and former principal, managed students under a system devised by Dr. William Glasser called Choice Theory, based on her previous work at another school in Wyoming, Michigan. In 2005, Grand Traverse Academy was named one of 18 Glasser Quality Schools in the nation.
Glasser schools aim for a school-wide environment of trust and respect through a "joyful atmosphere."
How did Ingersoll and Mentley build and expand the academy? "From the Academy's inaugural year through June 2013, Michigan has provided the Academy with nearly $72.0 million dollars in taxpayer funds," wrote an investigator, Anita Senkowski aka "Miss Fortune," blogging on the website "Glistening, Quivering Underbelly," adding:
"In addition, various grants and federal funding (including over $800,000 from the American Recovery and Reinvestment Act of 2009, popularly known as 'the Stimulus') added roughly $8.5 million in financial support."
(NOTE: The $72 million is from approximately $7,000 state aid per student per year from the school aid fund. Enrollment has risen from 290 in 2001 to 1,192 last year.)
In addition, the school was financed with two tax exempt municipal bonds totaling more than $25 million.
The Michigan Public Educational Facilities Authority (MPEFA), created in 2002, has been helping charter schools -- known in Michigan as public school academies -- to acquire tax-exempt bond financing, states the Michigan Department of Education.
The newspaper concluded: "Under current Michigan law, the Michigan Department of Education has no legal authority to investigate or correct financial transactions of charter schools or prevent any for-profit company from sinking a charter school into deficit. The state superintendent can only suspend the charter's authorizer, Lake Superior State University, from opening more charter schools if oversight is poor."
Since Ingersoll's indictment, State Rep. Charles Brunner, Democrat of Bay City, has co-sponsored legislation that would require more transparency and accountability from charter management companies, according to Bridge Magazine. The bill has little chance in the Republican-dominated Legislature, opined Bridge.
However, Gov. Rick Snyder commented positively: "Let's hold them (charter schools and traditional public schools) to the same standard, but let's raise that bar," he said, urging greater overall focus on student achievement.
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