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Witnesses issue delays ex-DPS principal’s bribery trial

Jennifer Chambers
The Detroit News

Detroit — There are no plans to call the mastermind behind a $2.7 million bribery scheme at Detroit Public Schools as a witness in the federal criminal trial of one of its former principals.

The decision by federal prosecutors to not have ex-DPS school supplies vendor Norman Shy testify in the trial of Josette Buendia caused a delay in jury selection on Monday in U.S. District Court.

Just moments before jury selection was to begin before U.S. District Judge George Caram Steeh, Buendia’s defense team challenged plans by the government to call three former DPS principals to testify on ledgers and files kept by Shy.

Shy, who pleaded guilty in the case, admitted he kept the records as part of the scheme in which he paid cash, checks and gift cards to DPS officials in exchange for billing the district for $5 million in business with his company. Shy did not deliver all the items, depriving students of $2.7 million in goods.

Buendia, a former principal at Bennett Elementary, is accused taking $41,755 bribes and kickbacks from a Shy from 2001 through January 2015. She is charged with conspiracy and bribery, a 10-year felony.

Buendia’s attorney, Kim Stout, asked Steeh to not allow three government witnesses to testify about the records Shy allegedly kept on Buendia. Stout said Buendia’s indictment only referenced a conspiracy between Buendia and Shy, not the three others who are to be called as witnesses.

“They aren’t calling Mr. Shy — which forgive me, judge — really surprised me,” Stout told Steeh. “We have no ability to cross-examine Shy.”

Stout said under the court rules she had no duty to call any witnesses in the case and that because Shy created the records, the three witnesses were not qualified to testify about them.

Steeh asked Assistant U.S. Attorney J. Michael Buckley why the government was not calling Shy, who is in a federal prison serving a five-year sentence.

Buckley said the government will not file a motion for Shy on substantial assistance — which asks the court to consider a reduced sentence after a defendant has cooperated with the government’s investigation in a case. All other DPS officials received reduced sentences for cooperating.

“He tipped off certain of his favorite principals” in the case, Buckley told Steeh, adding that the defense was able to call Shy if they wanted to.

Steeh has asked both sides to file motions on the issue and a decision is expected Tuesday before jury selection. Before leaving the bench on Monday, Steeh said, “the simple answer is to bring Shy in to testify.”

Buendia rejected a plea deal by prosecutors that would have cut her prison time for helping the government with its criminal case. Twelve other DPS officials and Shy were charged in the case. All pleaded guilty and are serving prison time in the case.

Instead, Buendia was indicted in June in connection with a wide-reaching bribery scandal that collared 12 other DPS officials and Shy. She faces two felony counts of federal program bribery and one count of conspiracy to commit federal program bribery.

Prosecutors allege Buendia also took $3,000 from Shy on Feb. 9, 2015, in the form of a prepaid gift card and “intended to be influenced and rewarded” with a series of payments from Shy. It also states Buendia accepted $2,500 on May 5, 2015, from Shy.

Shy and 12 other DPS defendants took plea deals, sparing themselves public indictments by a grand jury. They received sentences between six months and five years, influenced by how much money they stole from the district in the scheme.

Several of the principals admitted to spending money on themselves for items ranging from clothes to cruises. Several others said they spent the money on DPS students and student trips.

After all 13 co-defendants entered into plea agreements with the government, Buendia was charged in June in a superseding indictment which added the two new counts, federal program bribery, which are punishable by up to 10 years in prison and a $250,000 fine.

FBI investigators say Shy, owner and operator of Allstate Sales, hatched the scheme by offering cash, checks and gift cards to DPS officials in exchange for billing the district for $5 million in business with his company. Shy did not deliver all the items during the scheme that ran from 2002 through January 2015.

In return for the business, Shy allegedly paid bribes and gave kickbacks totaling $908,518, officials said.