Ex-DPS principal’s attorneys want to build new defense

Detroit — A federal judge has granted a recess in the trial of indicted Detroit Public School principal Josette Buendia after her defense team asked for time to regroup and build a new defense.

U.S. District Judge George Caram Steeh on Thursday told the government and lawyers for Buenida to return to court Friday morning to give jurors closing arguments in the case in which the former elementary school principal is accused of taking more than $40,000 in bribes and kickbacks from a school vendor.

Kim Stout, Buendia’s defense lawyer, asked for the recess Thursday after Steeh ruled during a motion argument that Buendia’s use of alleged bribery funds on school children was immaterial to her guilt or innocence.

At the time she had called five of 18 planned witnesses in Buendia’s defense.

“My anticipated defense has been gutted, so I’m not sure which direction to go,” Stout told Steeh. “Everything has changed.”

Federal prosecutors argued that Buendia, the former principal of Bennett Elementary School, committed the crime of bribery when she took cash and gift cards from Shy, even if she spent some of the money on her school and its students.

“What she did with the bribe money is not a defense,” assistant U.S. Attorney J. Michael Buckley told Steeh.

Steeh took arguments from both sides on the issue and returned Thursday afternoon with a decision, saying “accepting less than full delivery (on school supplies) and selecting Shy as a vendor with the intent of receiving cash for whatever purpose is inconsistent with her official duties.”

Stout said she will rest her case on Friday and not call additional witnesses.

Early Thursday Stout brought three witnesses in Thursday to testify that Buenida spent some of the more than $40,000 in cash and gift cards she got from ex-vendor Norman Shy on students and school needs, such as clothing, kits to eradicate lice and transportation to field trips.

Buendia is charged with conspiracy and bribery, a 10-year felony.

Indicted in June, Buendia rejected a plea deal by prosecutors that would have cut her prison time for helping the government with its criminal case against Shy and 12 other DPS officials charged with 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. They also allege Buendia accepted $2,500 on May 5, 2015, from Shy.

Shy 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.

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.

On Wednesday, jurors saw 14 letters Buendia allegedly wrote asking for gift cards from the school vendor as well as multiple texts and two videos of her making the same requests.

Federal agents used Shy as a confidential informant to gather evidence in the case against Buendia, who is accused of accepting more than $40,000 in bribes and kickbacks from Shy.

Douglas Wood, a special agent for the FBI, testified on Wednesday that after Shy confessed to his own role in the $2.7 million scheme at DPS, the FBI used him to record conversations with Buendia when she requested additional gift cards and cash.

“You want cards? What’s your balance?” Shy says to Buendia during a recorded phone call in early 2015

“Six thousand dollars,” Buendia says.

“How much do you want?” Shy says.

“Three thousand,” Buendia said.

Buendia’s lawyers admit she took the money but used it on her school and students and say the government cannot prove she had corrupt intent when she took the cards and cash.

Another FBI agent who interviewed Buendia at her Garden City home said Buendia took more the gift cards and cash from Shy “to balance off” all of the personal money she spent on her school and students.

FBI special agent Gwen Rosenthal testified when she interviewed Buendia in August 2015, Buendia admitted to accepting gift cards and cash from Shy, who billed the district for $5 million in a scheme but delivered only part of the goods.

But Buendia also admitted to using some of the money on massages, gas and nail salon services, Rosenthal said.

“She said she knew it was wrong,” Rosenthal said.

Buendia told Rosenthal that Shy’s offer to provide gift cards to her and other principals at DPS “sounded slimy,” but that one principal told her “it wasn’t a big deal to do business that way” at the district, Rosenthal said.

Buendia was one of 13 DPS administrators charged in the public corruption case orchestrated by Shy at DPS.

Twelve other DPS officials and Shy pleaded guilty in the case. They received sentences between six months and five years, influenced by how much money they stole from the district in the scheme.

In exchange for her signatures on invoices, Shy paid Buendia $41,755 in bribes and kickbacks for more than a decade, prosecutors said.

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.

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

Buckley said he would not call Shy during the trial because the government was not interested in offering him a reduced sentence in exchange for his potential cooperation in the case.

JChambers@detroitnews.com