Detroit principals charged with stealing $1 million

By Shawn Price  |  March 29, 2016 at 11:42 PM
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DETROIT, March 29 (UPI) -- Nearly $1 million was allegedly stolen from Detroit public schools by more than a dozen principals as part of a kickback and bribery scheme, federal prosecutors said Tuesday.

At least 13 current and former principals, including one featured on The Ellen DeGeneres Show for receiving $500,000 in donations intended to improve a dilapidated school, are named in a federal complaint alleging the principals conspired to collect $908,500 in kickbacks and bribes over school supplies that often never made it to the schools.

"The real victims in a case like this are the students and the families ... the teachers and the educators who want to make a difference," Barbara McQuade, U.S. Attorney for the Eastern District of Michigan, said at a news conference. "A case like this is a real punch in the gut."

The investigation started two years ago following a routine audit, prosecutors said.

A routine audit launched the two-year investigation that found schools allegedly used supply vendor Allstate Sales to provide items like paper, supplemental teaching materials, or auditorium chairs, then principals would submit phony invoices of payments to Allstate for items that never arrived. The principals allegedly received payments from Allstate in return, McQuade said

The principals, five of whom no longer work for the district, were each charged with conspiracy.

The center of the investigation revolves around 74-year-old Norman Shy, who allegedly paid the kickbacks to the principals, and over a 13-year period, cheated Detroit's public school system out of about $2.7 million, prosecutors said.

Shy was charged with conspiracy, bribery and tax evasion.

Detroit schools continuing financial troubles had nothing to do with the charges, McQuade said, and didn't want the case to be part of any political debate.

"Public corruption never comes at a good time," said McQuade. "This case is not about DPS. It is not about emergency managers. It is about these 14 individuals who breached their trust."

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