DPS kickback scheme leader fights bid to seize assets
The school supplies vendor who deprived Detroit Public Schools students of $2.7 million in a bribery and kickback scheme is fighting prosecutors’ efforts to seize his marital home and other property as part of the public corruption case.
Norman Shy’s attorney Christopher Andreoff has asked U.S. District Judge Victoria Roberts for a hearing on whether language in a forfeiture order in Shy’s case is “too broad and vague” and would deprive his wife and other people who have claims on his personal property.
In a motion filed June 7, Andreoff argues that Shy’s plea was only taken under advisement on May 11 and that entering an order of forfeiture before the plea is accepted would deprive Shy’s wife, his heirs and others of their interest in the property.
Shy, 74, and his wife live in a condo in Franklin, which he bought two years ago for $1.125 million.
According to Andreoff, Shy’s wife has hired her own attorney to pursue all of her rights and claims to the marital home, other property interests and financial accounts.
The U.S. Attorney’s Office says Shy’s written plea agreement is evidence in the case and sufficient to enter a preliminary forfeiture order.
Roberts has not set a hearing in the matter.
Shy faces 70 to 87 months in prison on two felony counts in the case: conspiracy to commit federal program bribery and income tax invasion.
The Mumford High School graduate also was ordered to pay $2,768,846.23 in restitution to DPS.
Shy, owner and operator of Allstate Sales, which sold school supplies to DPS, admitted he conspired with school officials who, prosecutors say, submitted fraudulent invoices for supplies. He did not deliver all the items for which he billed DPS.
FBI investigators say Shy hatched the scheme, which ran from 2002 through January 2015, by offering cash, checks and gift cards to DPS officials in exchange for billing the district for $5 million in business with his company.
The scheme deprived DPS students of more than $2.7 million in resources, officials said. In return for the business, Shy allegedly paid bribes and gave kickbacks totaling $908,518.
Meanwhile, sentencing is Sept. 8 for a DPS principal who pleaded guilty this week to a felony bribery charge in the kickback scheme.
Ronald Alexander, a principal at Spain Elementary for 20 years until he retired April 1, entered a guilty plea Tuesday before Roberts to a charge of conspiracy to commit federal program bribery, a five-year felony.
Alexander is among 12 former and current DPS principals charged by federal prosecutors in the scheme.
Alexander is accused of taking $23,000 from Shy over five years. He faces 24 to 30 months in prison when sentenced.
In February, Alexander accepted a $500,000 donation from “The Ellen DeGeneres Show” for technology updates, campus renovations and additional staff funding at his school.
Officials with Lowe’s, the sponsor of the gift, have said the school will still receive the funds despite its former principal’s criminal case.
Twelve other DPS officials have already pleaded guilty for their roles in the scheme. All face jail time and must repay what they took in bribes.
One DPS principal has not appeared in court since she was charged in the case. Josette Buendia, principal of Bennett Elementary since 2010, still awaits arraignment.
The U.S. Attorney’s Office in Detroit says it may go after the state pensions of the DPS officials after they have been sentenced for their crimes. The federal government does not have legal standing to request the forfeiture of their pensions.
However, Gina Balaya, spokeswoman for U.S. Attorney Barbara McQuade, said once the defendants have been sentenced and restitution ordered by the district judge, the government can and will take steps to enforce the restitution order, which may include garnishment of their pensions.