US Attorney: $2.7M DPS fraud scheme a 'punch in the gut'
Fourteen people are now facing federal corruption charges including twelve Detroit Public School principals.
They are accused of running a kickback scheme for school supplies that rarely made it to classrooms. Criminal charges were filed Tuesday against 12 current or former principals, an assistant superintendent, and a DPS vendor of school supplies, Norman Shy.
"A case like this is a real punch in the gut for those who are trying to do the right thing," said Barbara McQuade, US Attorney, Eastern District of Michigan. "Documents allege that Shy conspired with the 13 individual school officials," McQuade said. "They didn't conspire with each other, but he paid bribes to each of those school officials."
One of those officials is Clara Flowers a former principal of Henderson Academy and the current assistant superintendent of the DPS Office of Specialized Student Services.
Officials say their investigation began two years ago.
"He would submit fraudulent invoices for school supplies. the principals would approve those invoices, and then he would provide some, but not all of the goods," McQuade said. "In exchange for approving these fraudulent invoices, Norman Shy paid bribes to these principals.
"The total amount of the bribes that he paid varied for each of the individual principals but the total was $900,000 dollars. In exchange he received payments of $5 million of that we believe $2.7 million was fraudulent."
Flowers is accused of taking $300,000 during her time as principal and superintendent.
"In addition to the bribery chargers, Mr. Shy, Ms. Flowers are also charged with one count of tax evasion each."
McQuade said DPS cooperated fully in the investigation.