DPS principal pleads guilty in kickback scheme

Posted at 5:46 PM, Apr 28, 2016
and last updated 2016-04-28 17:47:46-04

Former Thirkell Elementary Middle School Principal Clara Smith tried to paint herself almost like Robin Hood during a plea hearing at Federal Court today.

She is accused of taking about $194,000 from a Detroit Public Schools Vendor in exchange for ignoring that he was turning in inaccurate invoices. Unlike Robin Hood, her crime didn’t take from the rich, it took from the broke Detroit Public Schools.

Smith, 67 of Southfield, is the first to take a plea deal in the bribery scheme that cost Detroit Public schools an estimated $2.7 million.

The maximum sentence for what this principal is accused of is 5 years, a fine of $250.000, and restitution. The deal leaves it the same, except it knocks the sentence down to a maximum of 4.75 years in prison.

The vendor alleged to be at the center of it all, Norman Shy of Allstate and Worldwide Sales, a DPS administrator, and eleven other principals are all also facing charges.

When Smith pleaded guilty to conspiracy to commit bribery she told the judge that Shy offered her money for years in exchange for allowing him to turn in fraudulent invoices, but she refused.

He continuously told her all the other principals did this. Then she said she fell out of the grace of God and accepted gift cards, which she gave to students in need.

But it didn’t stop there. Between 2009 and 2014 she accepted not only gift cards for kids, but thousands of dollars for herself. Norman Shy told her there was no way to track it. No one got caught. He sometimes paid her by writing checks to her relatives or paying her credit card balance.

“He said he didn’t keep a record, but he apparently he lied,” said Smith.

Investigators found that Norman Shy kept a record of all kickbacks and bribes paid.  According to his records Clara Smith took $194,000. Smith said she didn’t agree with that amount, but knew she had done wrong. 

Under the plea deal she could have to pay $194,000, a fine of $250,000 and spend up to 57 months in prison.

The prosecutor said if Clara Smith helps with other cases, a motion could be entered calling for a lighter sentence. She will be sentenced in September.

Plea hearings for others charged in this investigation are scheduled for this and next month.