Missing $1.6 million not the focus of criminal case for charter school founder

Feb 9, 2015

Credit Peter Payette

The man who owes $1.6 million to a Traverse City charter school goes on trial this week in federal court. One state lawmaker called Steven Ingersoll the “poster child” for problems with charter schools in Michigan.

But his financial dealings with Grand Traverse Academy will not be at the center of this month’s trial. In fact, whether the missing money was actually stolen might not even be an issue that gets discussed.

Steven Ingersoll moved lots of money around over the years operating two charter schools, one in Bay City and one in Traverse City. About $2 million wound up in his personal bank account, according to court documents.

Ingersoll’s attorney, Jan Geht, says none of that money was stolen and nothing was done illegally at Grand Traverse Academy.

“Our interpretation of it, consistent with what we understand is Michigan Department of Education’s position, is that what happened at GTA was acceptable,” says Geht.

The federal government disagrees with the state. Federal attorneys allege in court documents that Ingersoll illegally took the money during the years he managed Grand Traverse Academy.

But they’re not actually charging him with that crime. He’s accused of not paying income taxes. He’s also accused of bank fraud when he borrowed money from Chemical Bank. Ingersoll denies these charges too.

So the accusation that he stole money from Grand Traverse Academy is sort of a footnote in this case. In fact, attorney Jan Geht wants that question kept out of the trial.

Geht asserts that money belonged to Ingersoll. It was payment made for managing the school. Geht says Ingersoll only owed it to the academy because he offered to give some of his management fees back when the school was short of money. Geht calls it a rebate.

“Essentially the problem was that the school needed financial assistance and he offered that financial assistance,” he says.

But $1.6 million never got to the school. Grand Traverse Academy wrote off that amount as bad debt last year, and now the charter school of about 1,200 students is in a budget deficit.

So far, GTA officials have made no attempt to get the money. They agree with Ingersoll’s explanation and continue to celebrate him as the loving father of the school.

Grand Traverse Academy is authorized by Lake Superior State University. Nick Oshelski runs the charter school office there and says the university expects the academy to try to get the money back.

“We feel that it belongs to Grand Traverse Academy,” he says. “It is money that would be funding the educational programs for those students. So at this point, we are insisting that they recover those funds.”

When asked if the money was a promised rebate or something else, Oshelski said he has no opinion on that point. He said all he knows is what his attorney and accountants tell him.

“After reviewing various documents, they’re indicating to me that that’s money that is owed to Grand Traverse Academy” he says.

Back in Traverse City, academy officials say they’ll wait to see what happens with Steven Ingersoll’s trial. Then they’ll decide what to do about the missing $1.6 million.

For full disclosure, Steven Ingersoll’s attorney, Jan Geht, practices law at the firm Bowerman, Bowden, Ford, Clulo and Luyt. His firm is a sponsor of IPR.