Troubled Detroit schools hit with bribery scandal

DETROIT --A dozen school principals in Detroit were charged Tuesday in a million-dollar scheme to defraud an education system already on the brink of collapse.

Detroit public schools are so financially strapped that children attend class in moldy, rodent-infested buildings, and have to wear their coats indoors to ward off the cold.

Lawsuit filed against Detroit school system

Now comes word that many of their principals allegedly have been on the take for years.

According to prosecutors, the alleged scheme that's been investigated for the last two years involved 12 current and former principals plus a vendor, Allstate Sales, owned by 74-year-old Norman Shy.

U.S. Attorney Barbara McQuade said Shy was the central figure.

"The scheme worked like this: He would submit fraudulent invoices for school supplies. The principals would approve those invoices and then he would provide some, but not all, of the goods that he promised to sell," McQuade said. "In exchange for approving these fraudulent invoices, Norman Shy paid bribes to these principals."

Almost all Detroit schools closed in teacher sick out

She called the case a real punch in the gut.

"The bribes were paid in the forms of cash, gift cards and checks sometimes to third parties or businesses owned by the principals," McQuade described.

Last month, Ellen Degeneres announced donations of more than half a million dollars to spruce up Spain Elementary and Middle School, where Ronald Alexander is the principal.

Alexander is one of those principals now facing charges. He allegedly pocketed $23,000 dollars in kickbacks from the vendor.

Other payoffs to principals ranged from a low of $4,000 to a high of $194,000.

  • Dean Reynolds
    Dean Reynolds

    Dean Reynolds is a CBS News National Correspondent based in Chicago.