DPS kickback scheme mastermind begins prison sentence

Jennifer Chambers
The Detroit News

Convicted felon and ex-school supply salesman Norman Shy began his five-year prison sentence on Tuesday.

According to the Federal Bureau of Prisons, Shy is identified as federal inmate #54668-039 and is lodged in Terre Haute, Indiana, a medium security federal correctional institution. The prison also has an adjacent minimum security camp.

A release date was not identified by the prison bureau for Shy, 75, who was convicted of stealing $2.7 million from Detroit Public Schools and its students.

In September, U.S. District Judge Victoria Roberts sentenced Shy to five years in prison for stealing federal funds from the district in a wide-ranging kickback and bribery scheme he masterminded with 13 Detroit Public School officials.

Shy of Franklin pleaded guilty to one count of conspiracy to commit federal program bribery and one count of federal income tax evasion. He owes DPS $2,768,846.93 in restitution.

Federal prosecutors say the scheme, which started in 2002 and ran through January 2015, was hatched by Shy, who billed DPS for $5 million in school supplies but delivered less than promised.

In return for the business, Shy allegedly paid bribes and gave kickbacks to 12 former and current DPS principals and one assistant superintendent in the form of cash and gift cards totaling $908,518.

Shy’s attorney, Christopher Andreoff, said on Wednesday that Shy turned himself in on Tuesday as ordered by the prison bureau.

For a 60-month sentence, federal prisoners typically serve 52 months before being considered for supervised release, Andreoff said.

If Shy is eligible for a community correction setting, known as halfway houses, he could get six months shaved off his sentence, reducing the time to 46 months, Andreoff said.

“But these are all hypotheticals, and there are lots of factors,” he said.

Shy will join the likes of Aldrich Ames and Mohamad Shnewer who are inmates serving life sentences at Terre Haute’s FCI.

Ames is the former CIA counterintelligence officer who pleaded guilty in 1994 to espionage for passing classified information to the Soviet Union and later to Russia over a nine-year period.

Shnewer was part of the 2007 Fort Dix attack plot involving a group of six radical Islamist men who conspired to stage an attack against U.S. Military personnel stationed at Fort Dix, New Jersey.

As part of the case, federal officials seized Shy’s bank accounts and ordered him to turn over some of the money from the sale of art work and several real estate properties — including a $1.125 million home in Franklin — to pay DPS back.

Twelve of the DPS officials pleaded guilty and were sentenced to prison time in the case. One principal, Josette Buendia, is taking her case to trial.

JChambers@detroitnews.com