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Mastermind of DPS bribery-and-kickback scheme pleads guilty

May 11, 2016

The man behind a bribery-and-kickback scheme in Detroit Public Schools pleaded guilty in federal court Wednesday.

Norman Shy, 74, ran AllState Sales, a school supplies company.

Starting in 2009, federal prosecutors say he conspired with school principals and one DPS administrator to inflate invoices for at least five years.

During that time, Shy got paid at least $2.7 million for school supplies he never delivered, and shared those profits with school officials.

Shy will have to pay back that amount in restitution to DPS, and between five and seven years in prison, per federal sentencing guidelines.

Shy didn’t issue any kind of apology in court, but he did acknowledge his guilt on two charges: conspiracy to commit bribery, and income tax evasion.

When Judge Victoria Roberts read the names of Shy’s alleged co-conspirators, some of whom have also pleaded guilty, and asked whether they conspired to seek payment “for goods never delivered,” Shy said “yes.”

When Roberts asked if that were others involved, he said “There may have been. I can’t think of any others.”

Shy’s sentencing is scheduled for September.