World | Wed May 11, 2016 6:22pm EDT

Businessman in Detroit Public Schools kickback scheme pleads guilty

BY ERIC M. JOHNSON

A businessman at the center of a years-long kickback scandal involving more than 12 Detroit Public Schools principals pleaded guilty on Wednesday to federal bribery and tax evasion charges and was ordered to pay back $2.7 million to the cash-strapped district.

Norman Shy, owner of Allstate Sales and an approved school supply vendor, faces five to seven years in prison under the terms of a plea deal entered in U.S. District Court in Detroit, according to court documents.

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Shy and 13 current and former Detroit principals were charged in late March with engaging in the bribery and kickback scheme lasting from 2002 to January 2015.

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Shy, 74, pleaded guilty to felony charges of conspiracy to commit bribery under a federal program, and income tax evasion, according to his plea agreement.

He has to pay $2.7 million in restitution to Detroit Public Schools and $51,667 to the U.S. Internal Revenue Service under the terms of a deal struck with prosecutors in which he agreed to help them build their case in exchange for leniency.

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