Bribery, Extortion, and Money Laundering

Two Former Detroit Public School Risk Management Officials and Two Vendors Indicted For Bribery, Extortion, and Money Laundering


April 30, 2010 - A federal grand jury indictment was unsealed today charging two former Detroit Public Schools (DPS) officials with converting more than $3 million of DPS funds to themselves, family, and friends, United States Attorney Barbara L. McQuade announced today. Also charged were two vendors hired to administer a health awareness program for DPS.

Ms. McQuade was joined in the announcement by Andrew G. Arena, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation; Maurice Aouate, Special Agent in Charge of the Detroit Field Office of the Internal Revenue Service; and Robert C. Bobb, Emergency Financial Manager for the Detroit Public Schools.

The eight-count indictment alleges crimes involving bribery, fraud, extortion, and money laundering committed between 2005 and 2006 by former Executive Director of Risk Management Stephen Hill, age 58, of Detroit, MI; former Risk Management Finance Manager Christina Polk-Osumah, age 59, of Detroit, MI; Sherry Washington, age 53, of Detroit, MI; and, Gwendolyn Washington, age 66, of Detroit. Sherry Washington and Gwendolyn Washington were partners of Associates for Learning.

United States Attorney McQuade said, "Protecting the integrity of public funds is always a priority. However, stealing funds from a public school in these times is particularly egregious, as it threatens to rob our children of their futures and ultimately compounds future crime problems." McQuade offered special thanks the Detroit Public Schools for its cooperation and efforts to weed out corruption from within its own institution and to the Wayne County Prosecutor's Office for its assistance in investigating these allegations and others involving the Detroit Public Schools.

FBI Special Agent in Charge Andrew G. Arena stated "Detroit Public School officials have been entrusted to act in the best interest of their students. The FBI continues to vigorously investigate elected and appointed officials who abuse public trust. We would like to thank the Detroit Public School Inspector General's office for their assistance in this matter."

IRS Criminal Investigation Special Agent in Charge Maurice Aouate said, "Money laundering constitutes a serious threat to our communities, especially when public funds are used to pay false or inflated invoices and kickbacks. IRS Criminal Investigation will use our financial expertise to follow the money, identify all involved, and assist in the prosecution of the offenders to the fullest extent of the law."

Mr. Bobb stated, "By bringing to justice those who have sought to enrich themselves at the expense of our children, we hope to send a message that the level of corruption that has been allowed to flourish in Detroit Public Schools in the past will no longer be tolerated. We will continue to work quickly and aggressively to root out corruption wherever we find it."

Hill and Polk-Osumah are expected to appear in federal court in Detroit this afternoon to be arraigned on the indictment.

If found guilty of all counts, the defendants could face a statutory maximum sentence of 20 years' incarceration on each of the eight counts of the indictment.

An indictment is only a charge and is not evidence of guilt. Each defendant is entitled to a fair trial in which it will be the government's burden to prove guilty beyond a reasonable doubt.