Tresa Baldas

Detroit Free Press

Three weeks before she was formally charged, ex-Detroit Public Schools principal Willye Pearsall signed a plea agreement, admitting that she received "approximately" $50,000 in bribes from a vendor.

In U.S. District Court today, three months since signing that deal, Pearsall tweaked her story.

Sitting at a defense table before a judge, never removing a straw hat from her head, the former principal at Thurgood Marshall Elementary School admitted that she took kickbacks from a school supply vendor in exchange for helping him bill DPS for materials that were never delivered. But she disputed receiving $50,000, as the government claims.

"This is the first we're hearing of this," Assistant U.S. Attorney Frances Lee Carlson said in court, noting the deal that Pearsall struck with the government had her admitting to receiving $50,000 in kickbacks. And her sentencing guidelines, she said, were based on a kickback amount ranging from $40,000-$95,000.

Pearsall is one of 12 principals charged with taking kickbacks from convicted school supply vendor Norman Shy, who is facing up to seven years in prison for running a $2.7-million kickback scheme involving the principals and one assistant superintendent. Shy and his 13 cohorts were all charged.

Pearsall, the 11th principal to plead guilty in the case, said that documents will eventually prove she took less than $50,000 from Shy. If she's right, Pearsall will be facing a lighter prison sentence. Under the terms of her plea agreement, Pearsall faces 30-37 months in prison and has to pay $50,000 in restitution to DPS.

Pearsall didn't say how much she actually took from Shy, but argued that DPS records will show that "it was impossible" for her school to have given $50,000 in business to Shy's company in a given year. She did not elaborate. The prosecution appeared confused and miffed. Her attorney, Todd Perkins, would only say the kickbacks totaled less than $50,000 — maybe even less than $40,000.

In the end, U.S. District Judge Victoria Roberts accepted Pearsall's guilty plea and set a sentencing date for Sept. 7. Meanwhile, a probation department will put together a pre-sentencing report, which will help Roberts decide what punishment to give Pearsall for her crime, which involved approving phony invoices for supplies that were never delivered.

At her plea hearing, Pearsall said that Shy's kickbacks typically came in the form of checks, which were made out to two of her tutoring companies: J & J Youth Services and Safety Net Enterprises. She said that she rarely dealt with Shy, but that "Mr. Shy had a person who came to see me." She said that she did business with Shy's associate because she was told that she "could get school uniforms" if she used that associate as a vendor.

The prosecution said depending on the probation department's recommendation, Pearsall could end up with a more lenient sentence.

Pearsall is among 14 individuals who were charged in March with helping run kickback schemes that largely benefited Shy, who pleaded guilty to bribery and tax evasion on March 11 and faces up to seven years in prison. He also has to pay back $2.7 million in restitution to DPS and $51,667 in back taxes to the IRS.

According to federal prosecutors, Shy was at the center of a $2.7-million DPS kickback scheme that robbed students of supplies that were paid for but never delivered over a seven-year period. He is accused of paying nearly $1 million in kickbacks to 12 principals and one assistant superintendent as rewards for helping him submit phony invoices to DPS for materials such as paper, chairs and supplemental teaching materials.

Shy will be sentenced in September. So far, the stiffest penalty faced by his cohorts is nearly six years in prison. That's what ex-assistant superintendent Clara Flowers is looking at after pleading guilty to accepting nearly $325,000 in kickbacks from Shy for helping him submit inflated invoices for materials that were meant for special education kids. The supplies, she said, were never delivered.

The only defendant who has not pleaded guilty in the case is Josette Buendia, 50, of Garden City, principal at Bennett Elementary School. She is charged with accepting $45,775 in kickbacks from Shy.

Contact Tresa Baldas: tbaldas@freepress.com