Schuette goes after pensions of convicted DPS officials

Michigan Attorney General Bill Schuette is going after the pensions of 12 ex-Detroit Public School officials convicted of bribery in a $2.7 million kickback scheme.

Schuette initiated civil forfeiture actions on Friday that seek to forfeit all state or DPS contributions from the time the bribery began until the time of the termination or retirement of the employee.

“An educator’s first responsibility is to the children of the school, and the individuals that accepted bribes violated that trust and responsibility,” Schuette said in a statement. “Actions have consequences, and they should not reap rewards for criminal behavior.”

Defendants Clara Flowers, Beverly Campbell, Stanley Johnson, Nina Graves-Hicks, Gerlma Johnson, James Hearn, Tanya Bowman, Ronald Alexander, Tia’ Von Moore-Patton, Ronnie Sims, Clara Smith and Willye Pearsall are members or retirees of the Michigan Public School Employee Retirement System whose pensions have received contributions from the state or Detroit Public Schools.

All 12 were convicted of felony federal program bribery. They will lose their license to teach as a result of the conviction.

“The district agrees that those involved in fraud and violation of the public's trust should be held accountable under law and supports the efforts of the attorney general to initiate civil forfeiture action against the former principals’ pensions,” DPS Community District Emergency Manager Steven Rhodes said Friday.

Michigan law provides for the forfeiture of public employee retirement benefits paid by the state into the retirement fund if a member or retiree is convicted of, or enters a guilty plea, to a felony that is related to their service as a public employee.

The confiscated funds cannot be used to pay restitution.

At her sentencing, Moore-Patton’s attorney told U.S. District Court Judge Victoria Roberts that her client was two years short from earning a pension at DPS. Moore-Patton took $4,000 from the district and was sentenced to six months in prison.

Michigan is one of a few states that has a pension forfeiture law for public employees.

Public Act 350 says a public employee or retiree convicted of a felony arising out of official duties “is considered to have breached the public trust" and may have his or her rights to a vested retirement benefit in forfeited.

Under the law, passed in 1994, a felony can be defined as misusing public funds or resulting from the receipt of a bribe or other financial benefit in that person's capacity as a public employee.

Gina Balaya, spokeswoman for the U.S. Attorney’s Office, said the federal government is seeking full restitution from all 14 defendants in the case, including a principal who has not gone to trial.

Shy has been ordered to pay $2.7 million to DPS and the government has seized several homes and cash from the sale of several of his properties. Restitution for the principals ranges from $4,000 to $324,785.

The U.S. Attorney’s Office does not have standing to request a court order to revoke the pensions, Balaya said.

U.S. Attorney Barbara McQuade issued a statement Friday, saying: "We appreciate the AG's efforts to use state law to forfeit the pensions of convicted school officials, which is not possible under federal law.”

Federal prosecutors say school vendor Norman Shy hatched the scheme, which ran from 2002 through January 2015, by billing DPS for $5 million in school supplies but delivering less while keeping the leftover money.

In return, Shy paid bribes and gave kickbacks to 13 former DPS principals and one assistant superintendent in the form of cash and gift cards totaling $908,518.

Twelve of the 13 DPS defendants and Shy took plea deals, sparing themselves public indictments by a grand jury. They received sentences between six months and five years, influenced by how much money they stole from the district in the scheme.

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 student and student trips.

The last principal charged in the case, Josette Buendia, former DPS principal at Bennett Elementary, refused a plea deal with prosecutors and asked for her case to be taken to trial on Dec. 5.

Buendia was indicted by a grand jury in Detroit in two felony counts of federal program bribery and one count of conspiracy to commit federal program bribery. Prosecutors say a plea deal remains on the table.

JChambers@detroitnews.com