DETROIT

Agents: Ex-DPS principal said ‘she knew it was wrong’

Jennifer Chambers
The Detroit News

Detroit — Jurors deciding the fate of a former Detroit Public School principal charged with bribery saw 14 letters she wrote asking for gift cards from a school vendor as well as multiple texts and two videos of her making the same requests.

Federal agents used ex-vendor Norman Shy as a confidential informant to gather evidence in the case against Josette Buendia, a former principal at Bennett Elementary School, who is accused of accepting more than $40,000 in bribes and kickbacks from Shy.

Douglas Wood, a special agent for the FBI, testified on Wednesday that after Shy confessed to his own role in the $2.7 million scheme at DPS, the FBI used him to record conversations with Buendia when she requested additional gift cards and cash.

“You want cards? What’s your balance?” Shy says to Buendia during a recorded phone call in early 2015

“Six thousand dollars,” Buendia says.

“How much do you want?” Shy says.

“Three thousand,” Buendia said.

Buendia’s lawyers admit she took the money but used it on her school and students and say the government cannot prove she had corrupt intent when she took the cards and cash.

Earlier in the day, another FBI agent who interviewed Buendia at her Garden City home said Buendia took more the gift cards and cash from Shy “to balance off” all of the personal money she spent on her school and students.

FBI special agent Gwen Rosenthal testified when she interviewed Buendia in August 2015, Buendia admitted to accepting gift cards and cash from Shy, who billed the district for $5 million in a scheme but delivered only part of the goods.

But Buendia also admitted to using some of the money on massages, gas and nail salon services, Rosenthal said.

“She said she knew it was wrong,” Rosenthal said.

Buendia told Rosenthal that Shy’s offer to provide gift cards to her and other principals at DPS “sounded slimy,” but that one principal told her “it wasn’t a big deal to do business that way” at the district, Rosenthal said.

“She said Shy asked for letters for clear accounting and to make it look like everything was on the up and up,” Rosenthal said.

Buendia asked Rosenthal if she was in trouble at the end of the three-hour interview and Rosenthal testified that she told Buendia she was not at the time.

“We were still investigating the case” at the time, Rosenthal said.

“We had evidence that suggested a bribe took place,” said Rosenthal on the stand, adding that just because Buendia used the money on the school doesn’t mean it wasn’t a bribe.

IRS special agent John Stromberg also testified after federal investigators served a search warrant on Shy at his Farmington Hills home, Shy led them to records in a home office where he kept a ledger, letters and receipts from Buendia that recorded kickbacks, bribes and the purchase of gift cards.

“He actually opened the drawer, and it was mostly empty except for 20-plus DPS-related files,” Stromberg said.

Buendia was one of 13 DPS administrators charged in the public corruption case orchestrated by Shy at DPS.

Twelve other DPS officials and Shy pleaded guilty in the case. They received sentences between six months and five years, influenced by how much money they stole from the district in the scheme.

In exchange for her signatures on invoices, Shy paid Buendia $41,755 in bribes and kickbacks for more than a decade, prosecutors said.

Buendia is charged with conspiracy and bribery, a 10-year felony.

Indicted in June, Buendia rejected a plea deal by prosecutors that would have cut her prison time for helping the government with its criminal case.

Prosecutors allege Buendia also took $3,000 from Shy on Feb. 9, 2015, in the form of a prepaid gift card and “intended to be influenced and rewarded” with a series of payments from Shy. They also allege Buendia accepted $2,500 on May 5, 2015, from Shy.

Shy admitted he kept the records as part of the scheme in which he paid cash, checks and gift cards to DPS officials in exchange for billing the district for $5 million in business with his company. Shy did not deliver all the items, depriving students of $2.7 million in goods.

Several of the principals admitted to spending money on themselves for items ranging from clothes to cruises. Several others said they spent the money on DPS students and student trips.

FBI investigators say Shy, owner and operator of Allstate Sales, hatched the scheme by offering cash, checks and gift cards to DPS officials in exchange for billing the district for $5 million in business with his company.

In return for the business, Shy allegedly paid bribes and gave kickbacks totaling $908,518, officials said.

Assistant U.S. Attorney J. Michael Buckley said he would not call Shy during the trial because the government was not interested in offering him a reduced sentence in exchange for his potential cooperation in the case.

Testimony resumes on Thursday before U.S District Judge George Steeh.

JChambers@detroitnews.com