Tresa Baldas

Detroit Free Press

After all the legal squabbling over her husband's assets, the wife of convicted Detroit Public Schools vendor Norman Shy gets to keep a cut of her $1.1-million marital home — but not as much as she had hoped .

Under a new court order, Carolyn Shy will get 25% of whatever the 7,000-square-foot Franklin condo sells for; the rest will be forfeited. In recent weeks, Carolyn Shy had claimed a marital stake in the home — at least 50 % — arguing the government can't outright take it from her because she did nothing wrong.

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In an apparent move to avoid litigation, the government agreed to let her keep 25% while Norman Shy forfeits the rest. The stately brick home, the government says, is the fruit of Norman Shy's ill-gotten gains: The 74-year-old businessman billed DPS $2.7 million for supplies that were never delivered by paying kickbacks to principals who approved his phony invoices. He faces up to seven years in prison when he is sentenced next month, and has to pay the $2.7 million back to DPS as restitution.

Carolyn Shy’s lawyer, Wally Piszczatowski, declined to comment.

Meanwhile, the government has been combing through Norman Shy's assets for months, trying to recover as much as it can from a man it claims lived large in part by scamming a poor school district. Federal prosecutors also have accused Norman Shy of trying to liquidate some his assets to keep the government from seizing them, noting in court documents that he sold artwork and a condo in May when he knew he wasn't supposed to under the terms of his plea deal.

Among the biggest assets on the government's forfeiture list is Norman Shy's $1.1-million condo. Shy bought the home in 2014 for $1.125 million

In a court document filed just weeks before her husband's sentencing, Carolyn Shy fought to protect the couple's marital home and other assets from being seized. Carolyn Shy had requested a hearing to argue the validity of her claim, but on Thursday she withdrew that request.

The next day, a new forfeiture order was filed in court, noting that an agreement had been reached to list the Shys' marital home for sale and let the government take 75% of whatever it brings and give it to a third party of its choice — presumably DPS. U.S. District Judge Victoria Roberts also ordered Norman Shy to forfeit nearly $250,000 in cash stemming from the sale of five other properties he owns in Birmingham, Bloomfield Hills, and Ferndale.

The government argued that the properties were more fruits of Norman Shy's ill-gotten gains. The judge agreed.

"The court finds that there is a sufficient nexus between the property listed above and the offense to which defendant pleaded guilty," Roberts wrote in her order.

Norman Shy will be sentenced Sept. 9. He was charged in March with running a $2.7-million kickback scheme with the help of 12 principals and one assistant superintendent who approved his fraudulent invoices in exchange for kickbacks. Out of the 14 defendants, all but one have pleaded guilty.

Contact Tresa Baldas: tbaldas@freepress.com