Tresa Baldas

Detroit Free Press

The prosecutor called him a "killer of dreams." The defendant said he made "a horrible mistake" in stealing from Detroit schoolchildren.

In the end, millionaire businessman Norman Shy, the central figure in a kickback scheme that cheated the struggling Detroit Public Schools out of $2.7 million, got a break: The 74-year-old vendor was sentenced to five years in prison Tuesday, when he could have gotten two years more.

Under the terms of his plea deal, Shy faced up to seven years in prison for paying nearly $1 million in kickbacks to 12 principals and an assistant superintendent as a reward for approving his phony invoices. Prosecutors urged the judge to give Shy up to 87 months, no less than 70.

Shy asked the judge to show him mercy and give him three years max, citing his age, poor health and otherwise clean record.

U.S. District Judge Victoria Roberts concluded that while Shy's entire life and good deeds "do count for something," a prison sentence is warranted for the severity of his crimes.

"To say they are serious is a gross understatement," said Roberts, who stressed that Shy's prison sentence should send a message to others that corruption at DPS cannot and should not be tolerated.

"Any number of vendors now stand in the shoes of Mr. Shy ... they, too, may be tempted to enrich themselves," said Roberts, stressing that Shy's sentence was not just about him, but for the community as well.

"Our children are priceless. They are entitled to every dime and every book sent their way," said Roberts, who addressed Shy directly: "There simply is not an ethical credit for you to dodge a lengthy sentence."

Shy, a 1959 graduate of Mumford High School in Detroit, apologized for his actions while his family quietly observed in the courtroom.

"There are no words to express how horrible I feel and how embarrassed and ashamed I am," Shy said with his family seated behind him. "I made a horrible mistake and I accept full responsibility ... I've tried to do the right thing ... I am very sorry."

Assistant U.S. Attorney J. Michael Buckley urged Roberts to sentence Shy to prison for up to seven years, arguing he hurt the state's most vulnerable schoolchildren and that the loss in this case is "incalculable."

"Mr. Shy is a killer of dreams. He's a thief of hope," said Buckley, adding Shy was secretive about it all.

Shy ripped off the schools and students, Buckley said, and then "would return to his luxurious mansion in the suburbs" without his victims knowing.

"It's wrong to steal," Buckley argued. "And it's especially wrong to steal from underprivileged schoolchildren."

Shy pleaded guilty in May to billing DPS for school supplies that were never delivered with the help of 12 principals and an assistant superintendent who approved his phony invoices in exchange for kickbacks. His victims included special education students.

At sentencing, Shy's lawyer, Chris Andreoff, argued that Shy's cohorts — the 12 principals and one assistant superintendent — were equally culpable.

"These are public officials with a fiduciary duty ... They could have said no," Andreoff argued. "Without their efforts, the fraud would not have been perpetrated."

Roberts, however, appeared more irked with the educators, if her comments from another sentencing hearing are any indication.

Shy's co-conspirator, Clara Flowers, also was sentenced today for her role in the scheme.

Roberts sentenced the former assistant superintendent to three years in prison sentence for accepting nearly $325,000 in kickbacks from Shy.

Flowers had previously argued that it was Shy who pulled her into his web of criminal activity. At her sentencing hearing, Roberts noted how both sides were finger pointing, each blaming the other for their crimes. But it was the educators, she stressed, who had a duty to serve the students' best interests.

"They all had a fiduciary tty to this community and (Shy) did not," Roberts said. "He's not in the same equation that they are."

In addition to prison, Shy also is to pay back $2.7 million in restitution to DPS and $51,667 in back taxes to the Internal Revenue Service.

Shy, public records show, ran his kickback scheme while living a in $2.4-million mansion in Farmington Hills. According to prosecutors, Shy cut deals with individual principals at different schools. The principals would approve his inflated invoices and, when Shy got paid, he kicked money and gift cards back to them.

Out of the 14 individuals charged in the scheme, 13 have pleaded guilty. All face prison.

Contact Tresa Baldas: tbaldas@freepress.com. Follow her on Twitter @Tbaldas.