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CODE RED: Five Years After Assuming Management Control Of Grand Traverse Academy, Mark Noss Faces Federal Investigation Of His Massive Cash Transfers To Convicted Felon Steven Ingersoll; Secret Transfers Of Taxpayer Cash Exposed In 2016 & Could Leave Noss On The Hook For $766,925 Owed By His Full Spectrum Management To Independent Bank

July 12, 2019, 5:13 am
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BACKYARD IS A BLANK CANVAS: Northern Michigan Estate Sale Swindlers, Brian & Virginia Ackerman, Bought $435,000 Nevada Home On Golf Course Weeks Before Fleecing Peninsula Township Woman — Out Of $2,600!

July 20, 2019, 5:56 am
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Back in March, I reported on this blog that Brian Ackerman and his wife, Virginia (Ginger) had “vanished” after fleecing a Peninsula Township woman out of thousands dollars after an estate sale last September, and police struggled to locate them.

Well, thanks to a juicy heads-up from a reader, I have learned the Ackermans didn't really “vanish”— they moved.

By moved, I mean to a $435,000 Henderson, Nevada, home the duo purchased on June 4, 2018.

The home purchase clears up this previously mysterious entry from Brian Ackerman's register of actions from the Grand Traverse County 86th District Court case: “defendant may travel to Nevada for business purpose only”.


According to 86th District Court records, and confirmed by VINELink, Ackerman was arraigned May 29, 2019 on one count of larceny by conversion under $20,000 relating to the alleged Old Mission estate sale swindle.

Given his Miranda warning that day, Ackerman was later released on a $75,000 personal recognizance bond.

But, despite an initial stink in local Traverse City media about the “runaway Ackermans”, there was no coverage when the case against them was quietly dismissed after Brian Ackerman made full restitution on July 2, 2019.

I can hear you asking the obvious: if the Ackermans could plunk down $435,000 for a new Nevada home, why couldn't they pay a mere $2,600 debt to a client of their estate sale business?

To paraphrase the late, great George Carlin, the same reason a dog licks his balls.

Because he can.

Or, in the case of the Ackermans...they!
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HOME BY NEW YEAR'S EVE? Convicted Fraudster Steven Ingersoll In Michigan Halfway House; Could Be Released From Federal Custody By December

July 21, 2019, 8:42 am
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Steven J. Ingersoll, who reported to FCI Duluth on February 2, 2017 to serve a 41 month sentence for his federal tax evasion and conspiracy convictions, has left Minnesota and is now back in Michigan.

Federal Bureau of Prison records reveal Ingersoll recently transitioned to the supervision of Residential Reentry Management Detroit (RRM Detroit).

RRM Detroit, located 20 miles south of Ann Arbor in Milan, is a minimum security facility more commonly known as a halfway house.

Originally sentenced to 41 months, Ingersoll sentenced has been whittled down by nearly 7 months, and is now targeted to be released from federal custody by December 29, 2019.

For those new to this blog, here's a recap of Ingersoll's crime story:

If Michigan optometrist, and imprisoned charter school management honcho, Steven J. Ingersoll, lived in Mississippi, John Grisham would have already written a not-very-fictitious-sounding novel about him. 

And with Betsy DeVos heading the United States Department of Education, stunning revelations made during Steven Ingersoll’s 2015 federal tax evasion trial and subsequent sentencing hearing can be seen as a bellwether for the United States, making this a national story. 

However, those stunning revelations made by Ingersoll and his cronies had very little to do with what’s popularly known as “school choice”, and everything to do with stacks and stacks of Benjamins — money, baby! 

Although Ingersoll was convicted on three counts in federal court (tax evasion and conspiracy), his admitted misappropriation of nearly $6.5 million from two Michigan charter schools he managed — the Bay City Academy and the Grand Traverse Academy — have never been formally investigated, let alone prosecuted. 

Yes, that’s right. 

Even though Ingersoll admitted under oath his fraudulent conveyance of nearly $5.0 million from the Grand Traverse Academy over six years via an accounting scheme, there’s apparently no political will in Michigan to investigate and prosecute the alleged crime — from the politically ambitious former Attorney General Bill Schuette to Grand Traverse County’s former Prosecuting Attorney Robert Cooney. 

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

“Steven Ingersoll obtained control over millions of dollars by creating and running the public charter schools known as the Grand Traverse Academy. The power of that money enabled Steven Ingersoll to corrupt himself, his wife Deborah Ingersoll, his brother Gayle Ingersoll, Roy Bradley, Sr., and Tammy Bradley. As the person who controlled the accounting books and public funds intended for the operation of the Grand Traverse Academy, Steven Ingersoll ignored his obligation to separate his personal finances from the finances of the Grand Traverse Academy. Instead, Steven Ingersoll treated the tax dollars provided for public education as his personal piggy bank, ultimately diverting approximately $3.5 million from the Grand Traverse Academy to uses other than the operation of the Grand Traverse Academy. Steven Ingersoll also manipulated the books of entities he controlled, including Smart Schools Management and Smart Schools Incorporated, to hide his diversion of the public money that had been entrusted to him.” 

INGERSOLL 101 
At the start of each fiscal year, (beginning July 1, 2007 and continuing for six years through the fiscal year ending June 30, 2013), Grand Traverse Academy (GTA) manager Steven Ingersoll withdrew his entire annual Smart Schools Management, Inc. fee from the Traverse City, Michigan charter school’s bank account before it had been earned — and before he was contractually entitled to receive it. 

Although ostensibly based on a percentage of the GTA board’s approved preliminary budget figures, Ingersoll’s management fee was necessarily “adjusted downward” after actual budgets were calculated at the end of each year. Ingersoll booked the overpayment on the GTA’s balance sheet as either “accounts receivable” or a “prepaid expense”, claiming them as “assets”, thereby concealing the school’s shaky financial condition to avoid triggering a bond covenant violation. 
  
The scheme was publicly supported by then board president Mark Noss, who described it in a September 17, 2014 Interlochen Public Radio interview: “There were times when the resources were just not there. So Smart Schools basically pledged or rebated that money back, saying ‘at some point in time we will repay what we’re calling a prepaid expense.’” However, Ingersoll never really repaid the difference between the amount he'd advanced himself (“what we’re calling a prepaid expense”) and the actual management fee he should have received. 

So how did the receivable grow from $538,864 on June 30, 2007 to $3,551,328 on June 30, 2012 if Ingersoll, as he’d claimed in multiple financial documents to the GTA board, booked each year’s fee overpayment as a receivable and paid it off at the beginning of the next fiscal year? 

Simple: after Ingersoll had paid the previous year's receivable balance using Michigan state aid money provided to the Grand Traverse Academy, he then transferred that money back from the Academy’s bank account to one of his Smart Schools accounts, and created a new, and even larger, receivable balance. 

Ingersoll admitted the multi-year scheme on December 9, 2015 while testifying during his sentencing hearing. 

THE “INVESTIGATION” 
Representatives of the GTA board, including its then-president Noss, met with attorneys from the Thrun Law Firm and Steven Ingersoll on May 20, 2013. 

The meeting was initiated after federal investigators paid visits to the school’s superintendent, Kaye Mentley, and the president of its board of directors, Mark Noss. During the meeting, Ingersoll admitted owing the charter school at least $3.5 million but asked to have the debt classified as a “loan”. 

According to the May 30, 2013 Thrun Law Firm legal recommendation to Noss and the GTA board, the issue before the board related “to funds withdrawn from the Academy’s general fund by Steven Ingersoll and/or representatives of SSM, which exceed the amount appropriated or authorized by the Board to be paid to SSM for either management fees or the reimbursement of Academy expenses.” The letter estimated Ingersoll’s debt to the Traverse City charter school at $3,548,319 (based on information provided by Ingersoll’s handpicked CPA, Tony Henning). 

As Henning had relied solely on “financial reports and representations of Steve Ingersoll” to determine the amount, Thrun repeatedly urged the GTA board to “independently verify the full sum due” instead of merely accepting Henning’s number. Representing the interests of the GTA and its board, not Steven Ingersoll and Smart Schools Management, Thrun affirmed in its May 30, 2013 letter that “Steven Ingersoll openly admitted, when asked by us during the May 20th meeting, that a conflict exists between his personal interests and the interests of the Academy.” 

However, the GTA board ignored Thrun’s recommendation to verify Ingersoll’s numbers, instead using CPA Henning’s exact $3,548,319 amount in its June 13, 2013 “demand letter” to Steven Ingersoll. On June 30, 2013, the GTA board and Ingersoll agreed on a “repayment plan”, revealing the details in the Academy’s 2013 financial statement. 

The agreement allowed Ingersoll to “work off” his balance by foregoing management fee payments over the remaining three fiscal years of his management contract. 

However, a November 25, 2013 letter from Doug Bishop, the GTA board’s former attorney, to Michigan Department of Education auditor John Brooks revealed one stunning exception: although the board of directors, headed at that time by longtime Ingersoll business associate Mark Noss, publicly revealed in the Academy's 2013 financial statement its decision to credit Ingersoll's future management fees against his $2.38 million dollar “prepaid expense” balance until it was reduced to zero, the Board still authorized a cash payment of “approximately $332,000 in pre-obligated, annual debt service of SSM with regard to GTA has agreed to pay to SSM.” 

After publicly revealing in its 2013 financial statement that Ingersoll would be “working off” his prepaid balance by foregoing any future management fee payments, the Grand Traverse Academy board paid Ingersoll $332,000 so he could have the cash flow necessary to make payments on an unspecified Smart Schools Management debt. 

GTA board president Mark Noss later oversaw an early morning meeting on March 19, 2014 where the board voted unanimously to officially “withdraw from the management contract with Smart Schools Management, Inc.” 

Minutes later, the board accepted the resignation of “Mark Noss as the President of the Board.” Although Noss tendered his resignation during this meeting, the resignation was not effective immediately. 

GTA records revealed Noss continued to serve in a dual role as a board member until its May 2014 meeting, nearly two months after signing a multi-year, multi-million-dollar management contract. 

Steven Ingersoll was indicted on April 9, 2014. 

Ingersoll was charged with three counts of wire fraud, two counts of tax evasion, one count of conspiracy to defraud the government, and one count of attempted conspiracy. (Four co-defendants, including Ingersoll’s wife Deborah, were also charged on various fraud and conspiracy counts). 

An April 24, 2014 superseding indictment further 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. 

Steven Ingersoll was convicted of three counts of fraud and tax evasion on March 10, 2015. 

Ingersoll’s sentencing hearing began on October 21, 2015 and he was formally sentenced to 41 months in federal prison on December 15, 2016. Ingersoll entered FCI Duluth on February 2, 2017. 

THE CONSPIRACY 

Brad Habermehl, a Michigan optometrist, served as a member of the Grand Traverse Academy board of directors from late 2012 to September 2016. 

On my blog, I revealed loan solicitation emails sent between then board president Brad Habermehl, a self-described “friend and colleague” of Steven Ingersoll, and a source who was a former business associate of Habermehl's regarding a “private school” venture Ingersoll and Habermehl were purportedly launching — emails sent after Ingersoll's April 2014 federal fraud indictment and while Habermehl was the president (and public face) of the Grand Traverse Academy board of directors. 

The emails revealed Habermehl's six-figure solicitation effort continued even after Ingersoll's March 10, 2015 conviction, and confirmed board president Habermehl was acting on behalf of Ingersoll, even referring to him as his “friend and colleague”. 

Habermehl sent the initial November 24, 2014 email to Reigle. However, the funding effort was initiated by Ingersoll himself earlier that day, with an early morning email to Habermehl outlining the bare bones of his “loan” proposal. 

Testifying on December 8, 2015 during Ingersoll's sentencing hearing, Habermehl was confronted with the evidence and admitted that former Lake Superior State University Charter Office head Bruce Harger was one of the project's five investors. Harger headed the office that chartered and oversaw the Grand Traverse Academy, leaving the university in September 2015. 

At 12:24pm on November 24, 2014, Habermehl reported back to Ingersoll, telling him “I have made the initial contact. I told John that you would like to have the funds no later than 6 to 8 weeks. I will let you know when I know more. Brad” 

Later that afternoon, Ingersoll sweetened the collateral pot, telling Habermehl in an email sent at 2:06pm that he has “two other high value houses and three school buildings as possible collateral if necessary.” 

During his December 8, 2015 testimony, Habermehl revealed that Reigle passed on the proposed “investment”. 

However, on March 15, 2015, less than one week after Ingersoll was convicted in federal court, Reigle reached out to Habermehl, sending him an email. 

Raising the issue of the "deal" he'd previously passed on, Reigle stated: "I'm sure glad that I didn't loan money to Steve Ingersoll. Looks like his ass is going away to the Gray Bar Hotel and facing some pretty hefty fines! Did you know that he was in that much trouble when you asked to borrow $300,000 from me? I hope not." 

Less than 30 minutes later, Habermehl responded and made a shocking revelation about one of the proposed project's partners, which he later revealed in court was former Lake Superior State University's Charter Office head Bruce Harger: 

"There are currently five investors that are perusing the school project. I and Steve are 2 of the five. One of the investors just retired from Lake Superior State University. You are correct that we have been friends for over 40 years. I approached you as an investor with more than $300,000 in collateral. I have not and would not bring you an investment deal that was not secured with like collateral. This is still a very good investment with a good return. Steve's problem with the IRS is with his personal income taxes and not related to any of the schools. I did not know the extent of his problems, but it has no effect on this school project. Brad" 

On March 15, 2016, an accountant formerly employed by Mark Noss at Full Spectrum Management revealed to the GTA board and the charter school’s authorizer, Lake Superior State University, that Noss had been making $12,500 monthly payments (and in some months, much more) to Ingersoll since April 2014, shortly after Noss assumed control of the GTA. 

Using information provided by the whistleblowing accountant, (who resigned shortly after making his revelations public), federal prosecutors were able to substantiate that between April 8, 2014 and March 1, 2016, Steven Ingersoll received a total of $627, 624.14 from Full Spectrum Management, the educational services provider owned by Mark Noss and holder of the management contract for the Grand Traverse Academy or Grand Traverse Academy itself. 

All of that money went into accounts owned by Steven Ingersoll and his solely owned entities. 

An excerpt from the April 29, 2016 court document: “In assessing the credibility of Bradley Habermehl as a witness and Mark Noss as an affiant in this matter, the court must consider the relationships they have with Ingersoll and how their financial and personal relationships with Ingersoll have influenced the representations that Habermehl and Noss have made to the court. The evidence discussed above casts doubt on the credibility of Ingersoll, Noss and Habermehl.” 

The April 27, 2016 email, sent by Ingersoll to Harger less than three weeks after his quadruple bypass surgery, revealed Ingersoll instructed Harger to contact the Michigan Board of Optometry and “email a letter saying they should not revoke my license mentioning Duane’s death, messed up bookkeeping, GTA’s support and my application of the principles of Optometry in the field of education.” 

And Ingersoll, on who reported on February 2, 2017 to FCI Duluth to serve a 41 month sentence for his federal tax evasion and conspiracy convictions, filed a “pro se” motion to vacate on January 24, 2017, seeking “post-conviction relief” based on attorney Martin Crandall’s alleged “ineffective assistance of counsel” — an attorney who’d sued him for nonpayment of nearly $362,000 in outstanding legal fees. Ingersoll's motion was denied.
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ROBERT BUCKHANNON PLEADS GUILTY TO WIRE FRAUD: Will This 'Phoenix' Continue To Rise In His Cryptocurrency, CBD & Cash Advance Schemes?

July 25, 2019, 3:05 pm
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FORMER HOME OF BAY CITY ACADEMY SOLD: Saginaw-Based Rescue Ministries of Mid-Michigan Buys 23,855 Square Foot Building For $125,000

July 26, 2019, 5:11 am
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STILL FUDGING THE NUMBERS: Michael Moore Dizzy Spinning So-Called “Facts” Regarding Traverse City Film Festival Finances But Quarterly Financial Statements, Forensic Audit Results Moore Publicly Promised To Deliver In 2018 Never Materialized

July 31, 2019, 5:05 am
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CUE THE CLOWN CAR! BUCKHANNON GETS THE BAND BACK TOGETHER: Phoenix Rising Ventures Spreads To Michigan, As Buckhannon Crony Chris Paganes Lands On Business Networking Site Alignable (The New Home Of Scoundrels?)

August 2, 2019, 6:53 am
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BUCKHANNON, PAGANES

Less than three weeks after exclusively confirming the existence of convicted felon Robert Buckhannon's expanding scam, under the moniker “Phoenix Rising Ventures”, I've discovered a former hedge fund crony of Buckhannon's has also jumped into the game.

Michigan resident, Chris Paganes (shown above in clown regalia), recently launched his own Alignable page, as seen in the screen grab below.


Metro Detroit area resident Chris Paganes was an unindicted co-conspirator and served as a trustee for the two Buckhannon-connected hedge funds. 

According to SEC documents, the “wrongdoing that underlies Paganes’s injunction occurred from August 2008 to at least May 2009 while he was a managing member of Imperium Investment Advisers, LLC (Imperium), an investment adviser registered with the Commission. 

During part of that time, he was also affiliated with Maximum Financial Investment Group, Inc. (Maximum), a broker-dealer formerly registered with the Commission. Maximum and Imperium served as trustee for a Bradenton, Florida-based hedge fund, Vestium Equity Fund, LLC (Vestium). 

In November 2011, Paganes was ordered by the SEC to “disgorge $650,000 and and prejudgment interest of $90,339.19 and to pay a $650,000 civil penalty". 

Paganes and his wife declared bankruptcy on November 30, 2012. Paganes' debts were officially discharged on June 13, 2013, except for his SEC fines and penalties, which remain unpaid. 

The SEC permanently barred Paganes from “acting as a broker or otherwise associating with firms that sell securities to the public.” In addition, FINRA indefinitely barred Paganes from association with any investment broker or dealer and barred him from association with any investment advisor. 

And neither the Michigan corporation database or any Metro Detroit-area DBA sources show any formal registration of Phoenix Rising Ventures as a legal business entity here in Michigan.

The Phoenix link between Buckhannon and Paganes goes back nearly a year, as you can see in this exclusive email between the duo and an unidentified prospect from October 2018. 
 
In addition, on his Alignable page, Paganes specifically calls out financial planning and investments as two of Phoenix Rising Ventures' offerings.

How is that possible?

It shouldn't be, but it appears Buckhannon is not under any meaningful scrutiny by federal law enforcement. 

The image below was taken from Buckhannon's Alignable page on July 10, 2019, shortly before the link was deleted, presumably by Buckhannon.

As you can see, Buckhannon's keenly interested in working with financial services professionals...however you define that term.

Hello, feds. 

Are you listening?
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ROBERT BUCKHANNON SENTENCING SCHEDULED...AND THEN RESCHEDULED, AND (IF HISTORY IS ANY INDICATOR) WILL PROBABLY BE RESCHEDULED AGAIN AND AGAIN: Set To Be Sentenced November 12, 2019, Buckhannon Is Still Scamming!

August 7, 2019, 5:27 am
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Robert Buckhannon, Kelly DeMoss at Battle Creek's On Deck Bar
Robert Buckhannon, who plead guilty May 30, 2019 to one count of  conspiracy to commit wire fraud, is scheduled to be sentenced on November 12, 2019. 

The deal stems from a criminal indictment filed August 8, 2018 against Buckhannon and co-defendant Kelly DeMoss. 

As detailed in his plea agreement, Buckhannon admitted his role in a scheme to defraud Blackburne & Sons Realty Capital Corporation, perpetrated with DeMoss.

But, if Buckhannon's history in the $34 million hedge fund fraud case is any predictor (he dodged a criminal trial in that case for nearly four years, ultimately pleading guilty in 2018 to one count of conspiracy to commit wire fraud resulting in a three-year probation term), that sentencing will likely be moved again and again.

In fact, it's already been moved once.

On July 26, an order was issued setting sentencing for November 8. Yesterday, an order acknowledged the hearing had been delayed and rescheduled to November 12.

Buckhannon formally consented to his change of plea in U. S. District Court during a July 25, 2019 hearing.

As part of his plea and cooperating witness deal (he's expected to roll over on former fiance, Kelly DeMoss, who's reportedly exploring a mental state defense), Buckhannon is barred from committing any criminal offense.


But Buckhannon's still scamming, right under the noses of the federal officials who are supposed to be monitoring his ass.

I recently discovered that Buckhannon's most recent scam, formed in Colorado under the moniker “Phoenix Rising Ventures”, is rapidly expanding and now includes a former hedge fund crony, Chris Paganes.

Phoenix Rising originally focused on a crypto-currency mining scam Buckhannon launched in 2018 with longtime business crony, Zia Shlaimoun. 

In early 2019, I learned that Buckhannon was illegally pitching investments in the venture, promoting a “22% to 28% annual return with potential”. 

In July, I discovered Buckhannon's now-deleted Alignable page, where he described Phoenix Rising Ventures as a “consulting group”, with “expertise and proprietary technologies” in the fields of block chain computing, hemp extraction and solar and battery technologies—claims almost as exotically imaginative as Buckhannon’s purported employment in 2018 with a Colorado pharmaceutical company that required his international travel to conduct clinical drug trials!


You can laugh, but Buckhannon was recently joined in Phoenix Rising Ventures by Michigan resident, Christopher Paganes, who launched his own Alignable page.

Paganes, who is permanently barred by the SEC from having anything to do with investment advisory, lists “financial planning” and “investments” as two of his (and Phoenix Rising’s) products and services. 

Even I couldn't make this shit up...I don't have to, because it's all true.


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FROM PROBATIONER TO PROPERTY DEVELOPER: Disgraced Former Veterinarian Bruce Langlois Seeking Approval To Develop 28-Acre Plot Along Prime Flat River Waterfront

August 18, 2019, 8:07 am
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Some people just come bouncing back, like that old-style clown punching bag with the sand in its ass.

Bruce Langlois, the Lowell, Michigan former veterinarian who plead guilty March 5, 2019 to one count of Unauthorized Practice of Veterinary Medicine, is scheduled to appear tomorrow, Monday, August 19, at a public hearing at the Vergennes Township Hall in Lowell, Michigan.

At the hearing, scheduled to begin at 7:00pm before the Vergennes Township board at a regularly scheduled meeting, Langlois will present “a concept plan for a PUD home site development.”

According to public records, Langlois has amassed ownership of nearly 120 prime acres in the Township, including a 28 acre parcel of Flat River frontage located at the end of a private road (Triple Oak Drive) off Lincoln Lake Road, also owned by Langlois. In addition, Langlois recently unloaded an extraordinary 8,000 square foot home set on a 20 acre plot overlooking the Flat River.

The Flat River is a tributary of the Grand River, starting in Six Lakes in Montcalm County, traveling through Greenville, Belding, and ending at the Grand River in Lowell.

In 1980, Michigan amended its zoning enabling acts to allow for more flexibility in zoning. 

Today, the Michigan Zoning Enabling Act (MZEA), houses that authorization at MCL 125.3503. That added flexibility is called planned unit development (PUD), which allows for mixed-land uses in a single development, and clustering and flexibility in design of a PUD’s parcels. 

Others often refer to this practice by other names: cluster zoning, planned development, community unit plan, planned residential development and other terminology. A PUD can also be set up to allow both the clustering and mix of land uses in one project. 

A PUD can be done in conjunction with various different means of splitting and conveying land. It can be done in coordination with creating a subdivision, creation of a condominium of the surface of land, leasing property and land divisions. 

Langlois, a twice-convicted sex offender, is currently serving an 18-month probation term imposed after a 10-day slap-on-the-wrist sentence handed down in June. 

According to the public notice issued by Vergennes Township, the “application for 14 home sites and preserved Flat River frontage is proposed on a 28 acre parcel at the end of the private road Triple Oak Dr (off Lincoln Lake Ave) by owner Bruce Langlois. This is a concept plan to gather public input. A final plan with details such as site condo lots and private road extension will be later submitted to the Planning Commission for a full review.”

Let's hope this means Langlois will not mutilate any more sweet little puppies and kittens, like Skittles.



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SHE KNEW, SHE FAILED TO TELL LAW ENFORCEMENT & SHE HELPED COVER IT UP: Feds Drop All Charges Contained In Original Indictment Against Kelly Demoss; In Return, Demoss Pleads Guilty To Misprison Of A Felony

August 19, 2019, 3:53 pm
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BREAKING NEWS! MAXIMUM SENTENCE: Three years in prison, one year of supervised release and a fine of at least $250,000.

Kelly Demoss is scheduled for a Change of Plea Hearing August 22 at 2:30pm in U. S. District Court in Grand Rapids.

Demoss will plead guilty to one count of misprison of felony, per a formal plea agreement made public late today.

In return for her guilty plea, federal prosecutors have agreed to drop the original counts from her August 8, 2018 criminal indictment: including one count of conspiracy to commit wire fraud, one count of wire fraud and three counts of money laundering.


By agreeing to the plea deal, Demoss gives up the right to indictment by a grand jury and agrees to plead guilty to the “Superseding Felony Information charging her with misprison of a felony.”  (The superseding information document remained unsealed at the time this story went to press.)

Misprision of felony is when a person is aware a felony, but fails to report the crime to authorities. 

The federal definition of misprision requires that, “(1) the principal committed and completed the felony alleged; (2) the defendant had knowledge of the fact; (3) the defendant failed to notify the authorities; and (4) the defendant took affirmative steps to conceal the crime of the principal.”

In this case, principal referred to is Robert Lyle Buckhannon, who inked his own plea deal on May 30, 2019. 

Today's federal court filing reveals Demoss “carefully reviewed the allegations contained in the Superseding Felony Information” and agreed that they are correct:

(1) Robert Lyle Buckhannon committed and completed the crime of wire fraud against Blackburne & Sons Realty Capital Corporation; 

(2) Demoss had knowledge of Buckhannon’s crime; 

(3) Demoss failed to notify law enforcement in Calhoun County or elsewhere in the Western District of Michigan; and 

(4) Demoss took an “affirmative step” to conceal Buckhannon’s crime.

Here is an excerpt from the Kelly Demoss plea agreement:

Starting in September 2012, in Calhoun County, Michigan, in the Southern Division of the Western District of Michigan, Demoss and Robert Buckhannon “controlled two Michigan commercial entities: On Deck Sports Bar & Grill, LLC (“On Deck”) and S.G.E. Investments, LLC (“S.G.E.”). 

On or about October 2, 2012, Demoss signed, on behalf of On Deck, S.G.E., and herself, a loan-approval letter with Blackburne & Sons Realty Capital Corporation (“Blackburne”), a nationwide private-money commercial lender headquartered in Sacramento, California. 

Blackburne was in the business of originating commercial loans, selling ownership interest in those loans, and servicing those loans. In signing this loan-approval letter, Demoss agreed to borrow $456,000 from Blackburne for use by On Deck. 

Blackburne funded the loan on or about October 9, 2013, and recorded a mortgage on the On Deck property as security for the loan. 

On or about October 12, 2013, Buckhannon instructed Demoss to write a check for $36,500 from On Deck’s Comerica Bank account payable to Buckhannon, using funds from the Blackburne loan to cover the check. 

She did so. 

On or about October 15, 2013, Buckhannon and Demoss signed a document entitled “Gift Letter Affidavit” which represented that Buckhannon had given Demoss $36,000 as a “gift”, without any obligation of repayment at any time, to obtain a residential mortgage on a personal residence in Battle Creek. 

In fact, the source of the funds was Blackburne commercial loan proceeds from the On Deck account. Demoss knew that she, On Deck, and SGE were obligated to pay the money back to Blackburne with interest, but instead she assisted Buckhannon in concealing the source of funds and the repayment obligation to Blackburne. 

Blackburne was never told that On Deck’s loan proceeds would be used to finance the purchase of that personal residential property, and therefore Blackburne had no mortgage on the residential property to secure repayment of the commercial loan. 

In the plea agreement, Demoss agreed to cooperate with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the U. S. Attorney’s Office, and any other law enforcement agency in their investigation of the charges contained in the indictment and information. 

In return, the U. S. Attorney’s Office agrees to move to dismiss the original indictment against Demoss at the time of sentencing. 

The sentencing judge may consider the dismissed counts in determining the applicable Sentencing Guidelines range. (Demoss does not concede that an increased sentence or an upward departure is warranted.) 

The U. S. Attorney’s Office agreed not to oppose a “two-level reduction of her offense level for acceptance of responsibility”, requested by Demoss. 

Although United States Sentencing Guidelines are not mandatory, the sentencing judge must consult the guidelines and take them into account when sentencing Demoss. 

The sentencing judge, with the aid of a presentence report, will determine the facts and calculations relevant to the sentencing. 

Demoss and her attorney will have the opportunity to “review the presentence report and to make objections, suggestions, and recommendations concerning the sentence imposed.” 

However, there is no agreement between the U. S. Attorney’s Office and Demoss as to the final sentencing guidelines range.

More on this story as it develops.

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DEMOSS SENTENCING SET FOR DECEMBER 16

August 30, 2019, 11:01 am
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Kelly Demoss, who entered a plea of guilty yesterday during a sentencing hearing in U. S. District Court in Grand Rapids, is scheduled to be sentenced on December 16, 2019.

Demoss plead guilty to one count of misprision of felony, per the formal plea agreement made public August 19, 2019. 

Demoss slipped the noose when federal prosecutors, in return for a guilty plea, agreed to drop the original counts from her August 8, 2018 criminal indictment, relating to fraudulent activity that hastened the demise of Battle Creek's On Deck Bar, including one count of conspiracy to commit wire fraud, one count of wire fraud and three counts of money laundering. 

In his official report and recommendation (filed yesterday), U. S. Magistrate Judge Phillip J. Green stated:

“On the basis of the record made at the hearing, I find that defendant is fully capable and competent to enter an informed plea; that the plea is made knowingly and with full understanding of each of the rights waived by defendant; that it is made voluntarily and free from any force, threats, or promises, apart from the promises in the plea agreement; that the defendant understands the nature of the charge and penalties provided by law; and that the plea has a sufficient basis in fact.” 

As part of her plea deal, Demoss “carefully reviewed the allegations contained in the Superseding Felony Information” and agreed they are correct: 

(1) Robert Lyle Buckhannon committed and completed the crime of wire fraud against Blackburne & Sons Realty Capital Corporation; 

(2) Demoss had knowledge of Buckhannon’s crime; 

(3) Demoss failed to notify law enforcement in Calhoun County or elsewhere in the Western District of Michigan; and 

(4) Demoss took an “affirmative step” to conceal Buckhannon’s crime. 


According to documents filed in the case, Demoss was able to buy a 4,450 square foot house, (pictured above) by using money from a $456,000 hard money loan intended for the On Deck Bar: 

On or about September 4, 2013, Kelly Demoss signed a contract to buy a house located at 224 Wahwahtaysee Way in Battle Creek for $172,000 with a $2,500 deposit. 

At the time, Demoss did not have the funds for the deposit or a down payment for a personal residence. 

On or about September 26, 2013, DeMoss signed a residential loan application to borrow $137,600 to purchase the Wahwahtaysee home. 

The application advised Demoss that she would be required to pay $37,274.94 in cash at closing to purchase the home. By October 9, 2013, the $456,000 Blackburne loan was approved, closed, and was fully funded. 

Blackburne recorded a mortgage on the On Deck property as security for the loan. 

Additionally, Demoss was personally liable to repay the loan. On or about October 10, 2013, Demoss received and deposited a check in the amount of $126,169.10, which consisted of Blackburne loan proceeds, into On Deck’s Comerica Bank account. 

Prior to that deposit, On Deck had $0 in the account. Demoss wrote several checks to make payments on several business and personal debts, including a personal vehicle loan. 

On or about October 12, 2013, Kelly Demoss wrote a $36,500 check from On Deck’s Comerica Bank account payable to Robert Buckhannon. 

The memo line of the check was left blank. 

However, Kelly DeMoss wrote “House” in the check register column entitled “In Payment Of.” 

On or about the same day, Robert Buckhannon deposited $36,300 from that check into his account at Comerica Bank. 

Prior to the deposit, he had $0 in that account. On or about October 15, 2013, Buckhannon purchased a Comerica Bank Cashier’s Check in the amount of $36,000 payable to Kelly DeMoss by withdrawing funds from his personal Comerica Bank account. 

The source of the funds was the $36,500 check Buckhannon had deposited three days earlier. 

The Cashier’s Check receipt included a handwritten notation: “Gift.” 

On or about the same date, Demoss deposited the $36,000 Cashier’s Check into her account at Chemical Bank, completing the alleged money laundering cycle. 

In the plea agreement, Demoss agreed to cooperate with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the U. S. Attorney’s Office, and any other law enforcement agency in their investigation of the charges contained in the indictment and information. 

Rob made me do it...that's one helluva sweet deal, Kelly!
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“COMPETITIVE FOR REGION” Traverse City Film Festival Seeks Director of Development; “Just Great Movies” Needs More Money

September 11, 2019, 5:57 am
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“TCFF seeks to hire its first-ever full-time Director of Development, a dynamic role with leadership opportunities and the ability to grow not only professionally but also the organization as a whole. Reporting to the executive committee of the Board of Directors, the DoD will be the main architect of a new, multi-tiered development strategy that will help TCFF further its mission both within Traverse City and across the region. You will be responsible for vital revenue streams including individual donors, corporate and foundation support, sponsorships, and grants – simultaneously maintaining historic giving and growing the program overall. You will strategize, execute, and analyze fundraising activities, manage the development budget, and activate the Board around development. As the Director of Development, you will be the organization’s main cheerleader, evangelizer, and outward-facing champion – building affinity across constituiences [sic] that lead to real, tangible impact through annual, major, and principal giving.”

Six months after its founder, Academy Award-winning documentary filmmaker Michael Moore, accused former Executive Director Deb Lake of “unauthorized uses” of $262,000, the Traverse City Film Festival is seeking a Director of Development.

In her response to Moore's allegation, Lake stated:

“I write to address the two allegations made by Mr. Moore in his email to the TCFF community dated March 3, 2019: (1) that an unnamed employee allegedly directed $198,020 of temporarily restricted funds without board authorization or approval, and (2) that the same unnamed employee conducted a benefit for a community member without the authorization or approval of the board of directors of the Traverse City Film Festival. 

While I appreciate Mr. Moore’s cagey reference to an “unnamed employee,” it is clear, based on his statements, that the unnamed employee is me. Mr. Moore’s allegation that $198,020 of temporarily restricted funds were used by me in my position as the former Executive Director of the Traverse City Film Festival is correct. The funds were used to pay TCFF’s bills because the TCFF was faced with a budget shortfall and general lack of funds in 2017.” 

The position description, currently advertised on Indeed.com and the festival's site, reveals the Development Director will report “to the executive committee of the Board of Directors”, headed by Moore.

Just before this year's festival, Moore diverted attention from the previous year's financial debacle, instead claiming credit for raising $60,000 at the Founders' Picnic—an amount Moore erroneously claimed would put its 2019 financials “in the black”.
  
Joe Beyer, Lake's replacement, left after briefly serving as Executive Director. Beyer now serves as the Executive Director of Michigan Legacy Art Park. 

This year's Traverse City Film Festival was headed by Managing Director Susan Fisher, and Creative Director Meg Weichman.

According to the position description, the new Director of Development can expect a salary commensurate with experience, and “competitive” for the region.

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PUTTING THE “SCREW” IN SCRUTINY: Documents Fly In Full Spectrum Management Chapter 7 Bankruptcy Case; Indepdendent Bank Pressing Mark Noss For “All Correspondence or Other Documents” Relating to $925,000 Loan

September 19, 2019, 2:02 pm
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Independent Bank is delving into the mystery stinking up the effort by Mark Noss to discharge $766,925 owed by his Full Spectrum Management, LLC to the bank.

On May 7, Noss was subpoenaed, and ordered to provide Independent Bank with a dirty laundry list of documents related to his 2014 assumption of nearly $1.0 million owed by convicted felon Steven Ingersoll to Traverse City State Bank (TCSB). Independent Bank inherited the mess when in it assumed control of TCSB in 2018.

Noss filed a Chapter 7 bankruptcy petition February 19, 2019 on behalf of Full Spectrum Management.  Full Spectrum's Summary of Liabilities exceeded $1.0 million, with the lion's share ($766,925) owed to Independent Bank.

A hangover of Steven Ingersoll's plundering regime at the Grand Traverse Academy's, the massive debt reflects a deal Noss made in 2014 with Ingersoll (and Traverse City State Bank's Dan Stahl) to personally assume repayment of Ingersoll's delinquent $989,825 line of credit debt.

Federal court records for the case reveal Independent Bank filed a response yesterday, September 18, to a subpoena to a produce documents. It's unclear from yesterday's filing what documents were requested from the bank, but it's likely the focus was Full Spectrum's attempt to discharge a high, six-figure debt.

Although there are no new recent developments to report, the bank's effort to gather information that would likely bolster a potential adversary proceeding against Noss/Full Spectrum, barring him from escaping repayment of the massive debt.

I broke down the nearly $400,000 paid by Noss to Ingersoll, expressed them as monthly amounts and expressed that amount as a percentage of Noss's Full Spectrum Management's monthly fees — and the results are shocking.

For example, Noss paid Ingersoll $54,950 in September 2014, 78 percent of his monthly fee.  Three months before, in June 2014, Noss paid Ingersoll nearly $30,000 or 42 percent of his monthly fee.

(Noss was fired from his Grand Traverse Academy management perch in June 2017, after assuming control of the charter school in April 2014. Noss was paid a management fee set at 9 percent of the school's revenue, a deal done with the blessing (or written “approval”) of TCSB's Senior Vice President Dan Stahl. 

Annual reports issued by the Grand Traverse Academy reveal Noss was paid at least $850,000 each year for the years ending June 30 2015, 2016 and 2017.)

There is one murky exception to the rule: a $54,358.41 payment facilitated by Noss, and made on June 1, 2015 from a secret Grand Traverse Academy/PNC Bank account to one of Ingersoll’s personal Chemical Bank accounts. Now that's one I'd like investigated...really investigated. The amount was purported to be fees paid to Ingersoll, revenue said to be due resulting from his privately-run daycare facility, run on-site at the Traverse City charter school. (There was never any explanation for the nearly 14-month payment delay, post Ingersoll’s March 2014 departure.) 

Will we finally get to the bottom of this mystery, in bankruptcy court?

If you hide a dead fish behind the drywall, it's going to stink up the place until it's removed.

Time to tear open the wall, and retrive that dessicated acquatic vertebrate.
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“LIEN” ON ME: Steven Ingersoll Can Never Sell His Residential Real Estate...He Owes Nearly $1,000,000 In Federal & State Tax Liens! (But You Can Rent His Traverse City Home For $5,700 A Week!)

September 24, 2019, 7:39 am
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The Carlisle House is available the summer of 2019 beginning July 1st with a weekly charge of $5700 ($5300 if deposit and rental is accepted by May 1, 2019.) Cleaning fee $300 for weekly rentals. Longer rentals require cleanings every 2 weeks of $150.) Fully refundable security deposit of $1000. Small pets considered. 

You can't sell or refinance a property unless you satisfy a tax lien and, in the case of Steven Ingersoll, multiple tax liens.

Adding the $22,207 federal judgment, along with nearly $38,000 in delinquent property tax owed to Bay City, and roughly $40,000 in income tax owed the State of Michigan, the grand total is nearly $1,000,000.


In a December 15, 2016, sentencing memorandum, federal prosecutors stated:

“When looking first at the need for retribution, Ingersoll has committed a serious offense, and his sentence should reflect it. His offense was not a one-time lapse in judgement, or a record-keeping mistake with purely civil tax consequences. His criminal tax-loss amount exceeds a million dollars. And he was convicted of tax evasion and fraud with respect to three years of false income tax returns. 

Ingersoll has done nothing to repay the money that he owes. To the contrary, he has continued to violate the tax laws to this day by failing to file any personal income tax return since 2012. 

The profit and loss statement that Ingersoll previously filed with the court shows that from 2012 to 2015, he earned over two million dollars in gross income. The only income tax payment he has made for those tax periods, however, was a $10,000 payment submitted when he applied for an extension to file his 2012 return. Defendant’s repeated and significant criminal conduct warrants a lengthy sentence.” 




The Traverse City property, shown above, is agressively marketed by Ingersoll's wife, Deborah, as a vacation rental, and generates up to $5,700 in weekly rent revenue.

It's like the shitty gift that keeps on giving, with one bizarre exception—a property located at 1515 Sixth Street in Bay City, directly behind Ingersoll's Center Avenue home.


Property records reveal the home is owned by a Michigan-based limited liability corporation, 1515 Sixth Street, LLC, formed on March 9, 2011 by Steven Ingersoll.

The Sixth Street home's property taxes are current, and the Ingersolls recently paid off a $96,000 mortgage registered against the home on July 21, 2016 in Bay County.

Hmmm?

So they can pay their bills!
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A BUNGLE IN BRIGHTON: Chuck Stockwell Fires Charyl Stockwell Academy's Superintendent, After A Bait-And-Switch Donation Scheme Goes Sideways. (Oh, Did I Forget To Tell You About The Threats That Were Covered Up...With Paint?)

October 13, 2019, 2:44 pm
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Where in the world is Mr. Beyer?

Kelly Weaver's Up North Progressive has exclusive details on a breaking story at the Charyl Stockwell Academy (CSA), a Howell, Michigan charter school, and you need to read it.

The CSA, formally known as the Charyl Stockwell Academy District, was founded by Stockwell in 1996. The school was originally formed as the Livingston Developmental Academy, with partner Steven J. Ingersoll.

Ingersoll, who's cooling his heels in federal stir, is scheduled to be sprung from his cage in late December after serving a nearly three-year term for convictions on two counts of attempting to evade federal taxes and one count of conspiracy to defraud the federal government.

Stockwell's Charterworld antics, detailed exclusively on Up North Progressive, include canning the CSA's Superintendent, pulling a bait-and-switch, after rattling the tin cup and collecting nearly $100,000 for a new middle school before flip-flopping, and scrapping plans to build a middle school.

The new middle school will now be located in a commercial office building, owned by Brighton, Michigan's Mike Corrigan.

Corrigan is now booting out longtime tenants from the building, including pediatrician Dr. Mo El-Fuoy.

According to the Livingston Daily, when the announcement was made in mid-August, the tenants of Corrigan's property had not yet been informed of the new plans for the building. 

Dr. El-Fouly said last Tuesday that he still hadn't been told of anything regarding moving his practice, which is located in suite 100 of the building. 

"It's not going to be any easy move at all for me," El-Fouly said. 

But a lease created between Corrigan and Charyl Stockwell Preparatory Academy, was approved by the academy's board of directors at its Sept. 12 meeting. 

The details of the lease were not disclosed by Corrigan or DeAngelis, and the document, like the school's board meeting minutes, was not made publicly available online.

The building where the middle school will be located is 28,000 square feet. An additional 14,000 square feet will be added on to it. 

And the threats that appeared on the walls, only to be painted over?

You'll have to read that one yourself at this link.


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