Up North Progressive

On March 10, 2015, Steve Ingersoll was convicted in a federal district court on three out of six counts of felony fraud. What’s been happening since then? A lot. The intrepid Miss. Fortune has all the wonderfully dirty details.

• Steve Ingersoll wants a new trial because he’s still pretty sure charter schools are banks.
• Also, he’s selling derelict Bay City properties cheaper than dirt. Tax liability included!
• Meanwhile, the city’s foreclosing on other properties in an attempt to get the unpaid taxes off their books.
• Ingersoll gets a hearing and a new sentencing date, giving him plenty of time to liquidate as much as he can.
• Bay City Academy will likely be under new management soon!

Since Miss Fortune is the only one doing any real follow-up reporting on the convicted optometrist, bookmarking her blog may be a good idea.

As the U.S. Attorneys try to file restraining orders faster than Ingersoll can offload evidence assets, what about the for-profit charter schools he used to manage, and manages – for now? Grand Traverse Academy is still in the red $1.6 million dollars, but there is no media coverage or parents up in arms over the mishandling of funds. Meanwhile, in the same Michigan city Traverse City Area Public Schools received plenty of media coverage when former school employee Mary Gillison was indicted, convicted, and now serving a nine month sentence for stealing $50,000. How does one convicted felon manage to receive no media coverage and still enjoys freedom after stealing millions, while another convicted felon gets all the media attention the local news can stuff into their papers?

Here is the difference. TCAPS is a real public school system, which means every penny received and spent must be reported to the state. GTA is a for-profit charter school managed by a privately owned third party vendor, and although the charter school must also report finances to the state, the money that goes through the management company magically transforms from taxpayer dollars to private assets.

The GTA board, according to Miss Fortune, were well aware for years there was a problem with Smart Schools LLC’s handling of management payments, but rather than do their job and hold Ingersoll accountable, they simply relabeled the money to hide what was happening.

This is not unusual with Michigan for-profit charter schools. Last year’s Detroit Free Press exposé into the problems charter school boards have with management companies and authorizers illustrates that often the agencies charged with providing oversight are part of the problem.

School boards of real public schools are elected to their positions. Boards of for-profit charter schools are appointed, and then approved by the authorizers. Lake Superior State University dropped the ball with GTA because according to Michigan law, it’s the job of the authorizer to “ensure charter school boards operate independently of any educational management company involved in the operation of the school.”

The GTA board, both past and present, included Ingersoll’s business partners, the business partner’s extended family, friends, and colleagues. Conflict of interest? Let that fester in your brain as you read this:

Service providers/management companies are accountable to the non-profit charter school boards that hire them. The boards are responsible for setting policy, directing operational and academic performance, and ensuring fiscal stability. Regardless of the type or level of support for which it is contracted, each service provider/management company operates at the direction of the charter school board.

LSSU approves the board, but has no jurisdiction over the management company because it’s a for-profit private corporation. The management company is supposed to be accountable to the board, but when the board is made up of friends and family, just how much direction can the board honestly have? Apparently $3.5 million of taxpayers’ money taken from the school and hidden in financial records as “prepaid” expenses much direction. Mark Noss, Bradley Habermehl, and the rest of the optometrist GTA school board were the ones responsible to make sure school funds weren’t mishandled. Ingersoll has 20 years experience making money disappear and reappear through his various LLCs. It took the Feds getting involved to try and rein him in, and they’re struggling now with his shenanigans in Bay City.

The tragic events of Dr. Steve Ingersoll and his 20 year adventure into education and creative financing illustrate why for-profit charter schools in Michigan will never be real public schools. There is too much rampant fraud, mismanagement of funds, and authorizers more than willing to ignore the problem while management companies bleed Michigan taxpayers dry. Everything that is not supposed to happen according to Michigan law Steve Ingersoll got away with. LSSU will never revoke the charter, and the Michigan Department of Education is powerless to do anything. For-profit charter schools in Michigan are parasites – helping themselves to the resources and provide no benefit. At least put the state-wide cap back in place before more can open.

Too much to ask? It’s a rhetorical question, no need to answer.