Twelve current and former Detroit school principals were among 14 people accused of bribery and other crimes Tuesday by federal officials.
Investigators allege that Norman Shy, the owner of longtime Detroit Public Schools vendor Allstate Sales, would submit fraudulent invoices for chairs, paper and other supplies. To ensure the invoices would be approved, prosecutors claim Sly paid out more than $900,000 in cash, gift cards and checks to school officials.
In return, Sly's company received $2.7 million from the district for supplies that were delivered in far lesser quantities than promised or were never delivered at all.
One of the principals, Ronald Alexander, appeared on "The Ellen DeGeneres Show" in an episode that aired last month to accept a $500,000 donation from Lowes for Spain Elementary. The charges aren't related to the home improvement store's donation, which was to go toward renovations, computers and other needs at the school.
The district has placed the current employees, including Alexander, on unpaid leave; suspended business with Shy and his companies; and suspended all purchases by individual schools. Reviews also will be conducted of all purchases made by the administrators charged and all school-based vendor contracts.
Shy, 74, and Clara Flowers, 61, an assistant superintendent in the Office of Specialized Student Services, are charged with conspiracy to commit bribery and tax evasion. The dozen current and former principals also are charged with conspiracy to commit bribery. Five resigned before the federal investigation or due to the investigation, officials said.
The Detroit district is under state oversight and has battled corruption for the past several years under a number of state-appointed emergency managers.
"Public corruption never comes at a good time," said U.S. Attorney Barbara McQuade, alluding to efforts in Lansing to financially help the district. "This case is not about the Detroit Public Schools. It's not about emergency managers. It's about these individuals.
"A case like this is a real punch in the gut for people trying to make a difference," she added.
"I cannot overstate the outrage that I feel about the conduct that these DPS employees engaged in that led to these charges," said Steven Rhodes, the district's state-appointed transition manager and retired federal judge who handled the city of Detroit's bankruptcy.
The investigation started after federal officials received information from the state, which was performing an audit on the Education Achievement Authority, a spinoff system of low-performing Detroit schools. Kenyetta Wilbourn-Snapp, a principal at two high schools, was charged late last year with taking bribes to hire a company to perform tutoring services.
A former high-ranking Detroit schools official, Barbara Byrd-Bennett, faces sentencing in Chicago after pleading guilty to helping steer $23 million in no-bid contracts to education firms for $2.3 million in kickbacks and bribes while at Chicago Public Schools. Byrd-Bennett served as the Detroit district's chief academic and accountability auditor, and her responsibilities included conducting academic audits and review of district programs, school-based programs and front offices.
The Associated Press contributed to this report.