First DPS principal in kickback scheme pleads guilty

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A Detroit Public School principal is the first to plead guilty to taking kickbacks. DPS principal Clara Smith is the first of a dozen current and former principals to face the court.

Smith admitted her role in Federal Court on Thursday but insisted the money she took was spent on the kids. That won't stop her sentencing, however, and she could get four years in prison.

The scheme was organized by vendor Norman Shy, the prosecutor claims, and resulted in millions being stolen from Detroit Public Schools. Smith did not have anything to say to the FOX 2 cameras outside the courthouse. Her attorney, Patrick Cleary, did. He called it a tragedy for all parties involved.

"This is not only a tragedy for Detroit Public School given the financial situation, but it's also a tragedy for my client," Cleary said.

Investigators say at times Shy did not deliver any of the goods to Thirkell Elementary School where Smith worked. The former DPS principal admitted to using Title One funds with Shy but said she originally refused his offered in 2007.

"She had nothing but remorse and regret from the beginning," Cleary said.

Smith told the judge under oath that that Shy said all of the principals had been doing it and that he's been a DPS vendor for 50 years and no one has gotten caught.

The payments to Smith ranged from gift cards to personal payments on credit card bills, plus payments made to the defendant's husband and daughter. Overall, between 2009 and 2015, Smith accepted different forms of kickback payments from Shy that amounted to $194,000.

Smith tried arguing the dollar amount in court saying she used most of the money on her students, school trips, and decorating Thirkell Elementary. The prosecution laid out that none of that matters since the exchange of money was done illegally.

Smith worked in DPS for 45 years and is a graduate of Eastern Michigan University and Wayne State University.

Prosecutors are pushing for between 46 and 57 months in prison and is scheduled for sentencing in September.

Smith will have to pay back the money.

The other principals and shy will have plea deals coming in May.