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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of Michigan

Tuesday, September 6, 2016

Former Assistant Superintendent and Vendor Sentenced on Bribery Charges

A former Detroit Public Schools (DPS) vendor and former Assistant Superintendent of Specialized Student Services were sentenced today for their roles in an illegal bribery and kickback scheme, announced U.S. Attorney Barbara L. McQuade.

Joining McQuade in the announcement were David P. Gelios, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Manny Muriel, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation.

Norman Shy, 74, of Franklin received a sentence of 60 months and Clara Flowers, 61, of Detroit received a sentence of 36 months.  Both were sentenced before U.S. District Judge Victoria Roberts.  Both pleaded guilty in May to charges of conspiracy to defraud the United States and tax evasion.

According to court records, Shy, the owner of Allstate Sales, a DPS vendor of school supplies, conspired with 13 school officials to submit fraudulent invoices, causing DPS to pay Shy for goods that were never delivered.  Invoiced supplies included auditorium chairs, supplemental teaching materials and raised line paper.  In exchange, Shy paid bribes and kickbacks to the school officials, using a portion of the payments he received from DPS from the fraudulent invoices. The scheme began in 2002 and continued until January 2014. 

DPS principals had the primary authority for selecting vendors from a list approved by DPS and for certifying that invoiced goods were received. 

In return for selecting Shy as a vendor and approving fraudulent invoices, Flowers accepted bribes and kickbacks in various forms, including prepaid gift cards and checks payable directly to her travel agency business and contractors who performed work on her home.  In total, Shy paid Flower’s approximately $324,785. 

The total amount of bribes and kickbacks that Shy paid to the 13 school officials was approximately $908,518. In exchange, Shy received approximately $2.7 million  from DPS based on payments for fraudulent invoices.

“We hope that these sentences will deter anyone who thinks that they can take advantage of a large public institution like the Detroit Public Schools,” McQuade said.  “We will hold accountable anyone who steals funds intended for our school children.  If there is a message here, it is that someone is watching, you will get caught and you will go to prison.”

“Today’s sentencing should serve as a impactful reminder that the FBI will not stand by idly when those in the field of education violate the public’s trust for their own personal gain.  The misapplication of already scarce public funds is not only illegal, but an insult to those dedicated educators working every day to make a better future for our children” said David P. Gelios, Special Agent in Charge, FBI Detroit Division

Public Corruption
Updated September 6, 2016