Feds seize convicted DPS vendor’s homes, bank accounts

Jennifer Chambers
The Detroit News

Federal authorities have seized two homes and two bank accounts of a school supplies vendor who deprived Detroit Public Schools students of $2.7 million in a bribery and kickback scheme.

Norman Shy, who pleaded guilty in May to conspiracy to commit federal program bribery and income tax invasion, had fought prosecutors’ efforts to seize his marital home and other property as part of the public corruption case.

But on July 12, U.S. District Judge Victoria Roberts entered an order that Shy’s Franklin home and a Bloomfield Township condominium, as well as two bank accounts, all be forfeited to the government as part of the case.

Shy, 74, and his wife lived in the Franklin home, which he bought two years ago for $1.125 million.

Shy faces 70 to 87 months in prison on two felony counts in the case when sentenced Sept. 6 by Roberts.

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.

As part of the criminal case, Shy, a Mumford High School graduate, must pay $2,768,846.23 in restitution to DPS.

Thirteen DPS officials were charged in the scheme. Twelve have pleaded guilty and face sentencing this fall. One principal, Josette Buendia, is taking her case to trial.