Feds charge 12 Detroit principals in $1M kickback scheme

March 29, 2016 in News by RBN

via: Detroit Free Press

In its latest crackdown on school corruption in Detroit,  the federal government today launched a legal bomb targeting 12 current and former Detroit Public School principals, one administrator and a vendor — all of them charged with running a nearly $1-million bribery and kickback scheme involving school supplies that were rarely ever delivered.

The vendor at the heart of the alleged scheme is Norman Shy, owner of Allstate Sales — which sells school supplies and items including auditorium chairs and raised-line paper. He is charged with  paying $908,500 in kickbacks to at least 12 DPS principals who used him as a school supply vendor in exchange for money.

According to court records, here’s how the scheme worked.

Principals steered millions of dollars worth of business to Shy, who in turn would give them money for helping make the deals possible.

The principals would certify and submit phony invoices to DPS for the school supplies. Shy got paid, but the goods were rarely delivered, only sometimes “for the purpose of making the transaction paper legitimate.”

Federal prosecutors allege that Shy ran this 5-year scheme with the help of Clara Flowers, an assistant superintendent of DPS’s Office of Specialized Student Services. She had the authority to select vendors and order supplemental resources such as maps and workbooks for various DPS schools. She picked Shy, court records show. It was Flowers who first introduced Shy to DPS sometime before 2009, when as principal of Henderson Academy she chose Shy as that school’s school supply vendor. Flowers would continue to use Shy as a vendor when she became an assistant superintendent.

According to court documents, Shy maintained a ledger to keep track of how much money he owed Flowers in kickbacks, which came in the form of cash and gift cards. The two regularly met to discuss how much Flowers was owed for her favors, and Shy was careful not to get caught, disguising his payments to Flowers in a variety of methods such as checks payable to contractors who worked on Flowers’ home, including one company that did painting and gutter work. Shy also used DPS money to help pay for a new roof on Flowers’ house.