Former Detroit Public Schools Official Sentenced for Accepting Bribes

A former Detroit Public Schools official who accepted kickbacks for authorizing payments to a vendor who submitted $3.32 million in fraudulent invoices was sentenced yesterday to 60 months’ imprisonment and ordered to pay restitution to the Detroit Public Schools, U.S. Attorney Barbara L. McQuade announced. She was joined in the announcement by Special Agent in Charge Andrew G. Arena of the Federal Bureau of Investigation and Special Agent in Charge Erick Martinez of  the Criminal Investigation Division of the Internal Revenue Service.

Stephen A. Hill, age 60 of Detroit and a former executive director of the DPS Risk Management Department, was sentenced by U.S. District Judge Paul D. Borman. Judge Borman also ordered that Mr. Hill pay DPS $3.32 million in restitution.

Sherry Washington, who was convicted as charged of program fraud conspiracy and money laundering conspiracy after a two-week jury trial in June.

Mr. Hill testified that he awarded the DPS wellness plan to a firm with no competitive bidding and with no written contract. He also testified that Sherry Washington proposed the cash kickback to him and later delivered bags of cash to him in private locations, including the parking structure of the Detroit Athletic Club.

Following an investigation by the IRS and FBI, an indictment charging nine people was returned. One defendant, DPS employee Christina Polk-Osumah, died of natural causes after indictment. All of the other seven defendants in the case were convicted as well; six pleaded guilty and local art gallery owner Sherry Washington was convicted after a jury trial and will be sentenced October 20, 2011. Co-defendant Gwendolyn Washington will be sentenced on October 5, 2011.

Other defendants sentenced in this case include:

• Marilyn White received a sentence of 21 months in prison and ordered to pay restitution to DPS in the amount of $3.322 million;
• Valerie Polk received a sentence of 18 months in prison and ordered to pay restitution to DPS in the amount of $347,746;
• Thomas Taylor received a sentence of one year and one day in prison and ordered to pay restitution in the amount of $440,928;
• Sally Jo Bond received a sentence of 18 months in prison and ordered to pay restitution to DPS in the amount of $3.322 million; and
• Duane Polk received a sentence of 27 months in prison and ordered to pay restitution to DPS in the amount of $788,674.

Ms. McQuade said in a prepared statement, “We are committed to rooting out public corruption wherever it occurs, but a breach of trust in our schools is particularly offensive. These defendants stole funds intended to benefit school children.”

Mr. Hill pleaded guilty on May 2 to one count of Hobbs Act extortion under color of official right, and one count of conspiracy to commit program fraud. The offenses arose from Hill’s involvement in a scheme to honor fraudulent million dollar invoices submitted by a group called Associates for Learning for implementation of a wellness plan for DPS employees. He accepted a 5% percent cash kickback for approving wire transfer payments upon receipt of the fraudulent invoices.