July 20, 2022

Anita Marie Senkowski: Cooking The Books

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Anita Marie Senkowski has looked deep into some charter school real estate shenanigans. 

INTRODUCTION

Dr. Steven Ingersoll, a Bay City, Michigan optometrist, who’d founded and managed two Michigan charter schools (the Grand Traverse Academy and Bay City Academy), was federally indicted on April 9, 2014, along with family members, alleging they conspired to commit bank fraud and tax evasion.

An April 29, 2014, superseding indictment charged all five defendants with conspiracy to commit bank fraud, and charged Steven Ingersoll, Gayle Ingersoll, and Roy Bradley, Sr., with conspiracy to commit tax fraud. The superseding indictment charged Steven Ingersoll with tax evasion regarding his attempt to “disguise the money allegedly received from Grand Traverse Academy” — which was also named by the government as the motive for the bank fraud conspiracy and tax evasion conspiracy.

On March 10, 2015, Steven Ingersoll was convicted of one count of tax evasion for 2009, one count of tax evasion for 2010 and one count of conspiracy to defraud the IRS — along with his co-defendant Roy Bradley, Sr — with respect to 2011.

Ingersoll entered FPC-Duluth on February 2, 2017, and was released on December 29, 2019, after serving nearly 35 months of his sentence.

When U. S. Attorney Barbara L. McQuade announced in a December 16, 2016 Department of Justice news release that Steven J. Ingersoll had been sentenced to 41 months in prison for his federal tax convictions, she said that business owners “who cheat on their income taxes are free-riding on the backs of the rest of us who pay our taxes. We hope that a prison sentence will deter this kind of conduct.”

It appears that a prison sentence did little to deter Steven Ingersoll — and may have made him an even better criminal.

BOTH SIDES OF THE DEAL: The Farragut Schoolhouse “Sale”

Steven Ingersoll, a Bay City, Michigan, resident, former optometrist, charter school manager and convicted felon, may have conspired with up to five people to “fraudulently convey” a building he owned to the Bay City Academy, a charter school he founded and managed from 2010–2015, to avoid paying hefty federal tax liens and federal income tax.

Fraudulent conveyances are transfers of a debtor’s property made to defraud, burden, and unfairly place the property out of reach of the creditor.

Ingersoll owes millions in delinquent federal income tax to the IRS (a recent IRS notice follows), and has a significant tax debt to the Michigan Department of Treasury.

The peculiar April 2022 sale of an Ingersoll-owned building that currently houses the Bay City Academy certainly raised my eyebrows, so I began my own investigation.

With one exception, the documents related to the transaction were acquired from the Bay County Register of Deeds public database — including the Warranty Deed, and the Memorandum of Land Contract — but only one, a “Building Acquisition Due Diligence” memo, came directly from authorizer Lake Superior State University’s Charter School office.

A second Freedom of Information Act request to Lake Superior State University, with an explicit list of all standard real estate documents for such a transaction (for example, Title Settlement Statement, Michigan Department of Treasury Property Transfer Affidavit L-4260) returned an email with a terse statement denying my request: “Your FOIA request has been received and denied. Lake Superior State University does not possess the documents requested.”

Bay City Academy, 301 N. Farragut Street, Bay City, MI

Located at 301 N. Farragut Street in Bay City, the building was transferred to the Bay City Academy in late April 2022 on Ingersoll’s behalf via a byzantine series of moves initiated by Minnesota resident, Sandra J. Oliver.

Oliver is the wife of Timothy Jon Oliver, a Minnesota attorney who was sentenced in 2016 to 41 months in prison for stealing $500,000 from ARS Tectonica, a Mexican construction company.

Like Ingersoll, Timothy Oliver was sent to a “Club Fed”, Minnesota’s FPC-Duluth, and their prison terms overlapped.

Just days before the transfer, taxpayer funds (in the form of monthly rent payments) had paid off a $782,838 commercial construction mortgage Ingersoll had entered into in 2013 with Wildfire Credit Union. Ingersoll defaulted on the loan in late June, 2016, which triggered an “Assignment of Rents” agreement with Wildfire that allowed the credit union to negotiate and collect rents, including amounts past due, directly from the Bay City Academy.

In 2013, Steven Ingersoll crafted a twenty-year “non-cancellable lease” agreement with the Bay City Academy for the Farragut Schoolhouse building. The agreement gave Ingersoll a soft landing when he ultimately defaulted on its Wildfire Credit Union construction mortgage. Ingersoll later revised the rental agreement in June 2016, obligating the Academy (not Ingersoll) to pay nearly $170,000 in delinquent payments to Wildfire Credit Union that had accrued between July 1, 2015 through June 30, 2016.

Ingersoll issued his first lease extension in 2017 while he was in federal prison, and the second extension, dated June 30, 2019, revealed Ingersoll’s scheme to use grossly inflated monthly rent payments, beginning July 1, 2019, that would completely discharged his Wildfire Credit Union mortgage debt by April 2022.

Monthly lease payments by the Bay City Academy to Wildfire Credit Union ranged from $8,000 per month for the year ending June 30, 2017 to $9,750 for the year ending June 30, 2021.

However, under the terms of the deal made by Sandra J. Oliver (apparently on behalf of Steven Ingersoll), the Bay City Academy’s monthly payments jump from 2021’s $9,750 rent to a $14,000 monthly mortgage.

Farragut Schoolhouse Warranty Deed

In the April 22, 2022 “Warranty Deed” shown above, one of the documents publicly available in the Bay County Register of Deeds online database, Oliver falsely identifies herself as the “CEO” of Farragut Schoolhouse LLC, a Michigan Limited Liability Corporation Steven Ingersoll formed in 2012.

State of Michigan Corporation records do not reflect Oliver’s assertion.

With the April 22, 2022, Warranty Deed, Oliver “conveys” the building from Steven Ingersoll’s “Farragut Schoolhouse LLC” to “Michigan ALN Properties, LLC”, a Michigan entity Oliver formed on July 2, 2021, for $1.00.

Oliver then takes the next step as “Michigan ALN Properties, LLC”: selling Ingersoll’s building to the Bay City Academy for $1.1 million.

On April 22, 2022, Oliver executes a “Memorandum Of Land Contract” entered into between the Bay City Academy and Michigan ALN Properties, LLC, selling the Farragut Street building to the charter school.

The sale was not an independent, “arms length, negotiated agreement between an informed Academy Board and the seller”, as the Bay City Academy management company asserted in its “Building Acquisition Due Diligence” report. (The report was obtained from Lake Superior State University’s Charter School office by a Freedom of Information Act request.)

In my opinion, it was a deceitful series of moves designed to (1) transfer the mortgage-free asset away from the grasp of the Internal Revenue Service and (2) provide Steven Ingersoll with a significant monthly stream of unreported cash.

Sandra J. Oliver is on both sides of the transaction: seller and buyer, and Ingersoll insider, Brian T. Lynch, was an active co-conspirator.

The building sold to the Bay City Academy for $1.1 million

Terms of the deal outlined in a “Due Diligence” document, issued by Mitten Educational Management on behalf of the Bay City charter school, notes a $50,000 down payment, and $14,000 monthly mortgage payments.

However, Mitten Educational Management, LLC, the Bay City Academy’s management company, declares its intent to purchase the Farragut Schoolhouse, LLC building it currently occupies at 301 N. Farragut Street, Bay City, MI, for $1.1 million from “ALN Properties, LLC, a Minnesota Limited Liability Corporation, whose address is 6240 Homestead Road, Duluth, Minnesota 55804”.

Look closely at that name: it’s a completely different corporation, with a different address, than the one shown in Sandra Oliver’s “Memorandum of Land Contract”.

Although the “ALN Properties, LLC” entity name is deceptively similar to the “Michigan ALN Properties, LLC” Michigan entity Sandra Oliver formed on July 2, 2021 and used on the Farragut Schoolhouse Warranty Deed and Land Contract, “ALN Properties, LLC” was actually formed as a Minnesota Limited Liability Company on November 6, 2007 by Alan Nelson, a plumber.

In addition to executing the Farragut Schoolhouse sale to the Bay City Academy on behalf of Steven Ingersoll, Minnesota resident Sandra J. Oliver has also formed business entities registered in her home state using the same Two Harbors, MN address she used in forming “Michigan ALN Properties, LLC” : Minnesota ICONIX Learning Center, LLCMinnesota Developmental Academy.

Websites for both the ICONIX Learning Center and the Minnesota Development Academy reveal nearly identical “visual learning” therapies as those Ingersoll previously promulgated at the Bay City Academy and Grand Traverse Academy under his trademarked “Integrated Visual Learning”, or IVL.

IVL has been described by Steven Ingersoll in select studies as “a method to expand visual attention and multi-tasking performance in motor, perceptual, integrative and cognitive tasks.”

Steven Ingersoll and his future “vision therapy” business partner, Mark Noss, graduated from Ferris State University’s College Of Optometry in 1980.

But it wasn’t until Ingersoll and Noss, armed with IVL, teamed up in 2005 to form the Excel Institute, a multi-disciplinary collaborative effort with psychologist Patricia Engler and Battle Creek optometrist Bruce Christensen, that the duo’s private “vision therapy” business really took off.

And so did their respective charter school management businesses: Noss is a former Grand Traverse Academy board member who assumed management of the Traverse City charter school in 2014 just prior to Ingersoll’s federal indictment. (His contract was later terminated by the charter school’s board in June 2017, and in February 2019 filed a Chapter 7 Bankruptcy on behalf of his management company, Full Spectrum Management, LLC.)

On April 30, 2020, Steven J. Ingersoll, Mark Noss and Full Spectrum Management were named as defendants in an adversary complaint filed in federal bankruptcy court by Kelly M. Hagan, the Chapter 7 Bankruptcy Trustee for the estate of Full Spectrum Management, LLC.

The complaint seeks to recover nearly $400,000 paid by over a two-year period by Mark Noss to Steven Ingersoll from Full Spectrum funds, including a $12,500 a month “no-show” consulting agreement for the “treatment of learning disabilities”.

Full Spectrum’s “Summary of Liabilities” exceeds $1.0 million, with the lion’s share ($766,925) owed to Independent Bank (formerly Traverse City State Bank) as the outstanding balance from the $989,825 “Smart Schools Management, Inc.” debt Noss assumed in March 2014 on behalf of Steven J. Ingersoll.

Noss continues to operates the Excel Institute in Traverse City, MI, as a “Developmental Optometrist” with his daughter.

And Brian T. Lynch, who currently heads the Bay City Academy as CEO of its management company, Mitten Educational Management, LLC, is the son-in-law of Mark Noss.

In his management company’s “Due Diligence” report on behalf of the Farragut Schoolhouse building acquisition by the Bay City Academy, Brian Lynch notes it was “presented to the Bay City Academy Board of Directors at a publicly noticed meeting” on June 29th, 2021 —just three days before Sandra J. Oliver formed “Michigan ALN Properties, LLC” from her Minnesota home.

Coincidence…or planned?

I will continue to investigate this property transfer, and publish what I discover.

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