TRAVERSE CITY — A federal judge rejected Grand Traverse Academy officials' request for $1.6 million in restitution from the charter school's founder Steven Ingersoll, who awaits sentencing in a tax fraud case.
U.S District Court Eastern District of Michigan Judge Thomas Ludington on Thursday released a long-awaited opinion on sentencing issues that could impact how much time Ingersoll serves in prison. A final sentencing hearing is scheduled for Dec. 15.
Ingersoll's attorney Jan Geht said he believes Ludington accepted nothing "untoward" happened at GTA.
"I think it confirmed our overall opinion during this entire case that this was a private matter involving Dr. Ingersoll’s finances," he said.
Court documents state Ingersoll at one point owed GTA $3.5 million. GTA officials in 2015 wrote off $1.6 million Ingersoll still owed the charter school and, through a lawyer, sought restitution of that amount in his federal tax evasion case.
A trial wrapped up in March 2015 when jurors found Ingersoll guilty of tax evasion. That proceeding and subsequent sentencing hearings featured testimony over a convoluted series of financial transactions in which prosecutors said Ingersoll shifted money between GTA, Bay City Academy, his companies and a construction project in Bay City.
Prosecutors argued Ingersoll used his position of trust to victimize GTA and his sentence should be enhanced accordingly. Ludington in July said he would issue a written opinion on that and other sentencing guideline issues, but his self-imposed 30-day deadline passed.
Ludington ruled the abuse of trust issue only applied to the IRS. He also found the IRS, not GTA, sustained harm as a result of Ingersoll's tax evasion — the crime for which he was convicted.
"Because GTA was not directly harmed by Ingersoll's tax evasion, GTA is not a victim such that restitution should be awarded," Ludington wrote.
Geht said Ingersoll could have faced 5 years in prison and been on hook for $5.5 million if Ludington ruled otherwise. He did note Ludington rejected an assertion that Ingersoll's actions could be considered "conduit" spending — a theory that would have been more favorable to the defense.
Attorneys likely will file sentencing briefs before the final hearing.
Geht said he'll argue Ingersoll's sentence should be in line with national trends in similar cases. He said that would be 12 to 15 months. Ingersoll could appeal the sentence, he said.
"I think that will depend mostly on what is the actual sentence," he said.