Feds accuse Michigan Justice Hathaway of real estate fraud

Federal authorities have filed a lawsuit accusing Michigan Supreme Court Justice Diane Hathaway of fraud in a real estate transaction.

Hathaway is not charged with a crime, but the government wants to seize her Florida home.

A lawsuit filed Monday in Detroit says Hathaway and husband Michael Kingsley put the home in the name of Kingsley's daughter while they tried to persuade a bank to allow a short sale on their home in Grosse Pointe Park.

Watch: Feds accuse Hathaway of real estate fraud

The lawsuit says the Windermere, Fla., home was put back in the couple's hands after the short sale was approved. The government says ING Bank was unaware of the property shuffle.

The following is from the lawsuit:

"On December 10, 2010 Hathaway and Kingsley submitted a hardship letter to lNG Bank in support of their request to be forgiven a debt of$600,000 in a ‘short sale’ submitted transaction of their residence in Michigan.

b. Prior to the submission of the hardship letter and with intent to defraud, Hathaway and Kingsley systematically and fraudulently transferred property and hid assets in order to support their claim to lNG that they did not have the financial resources to pay the mortgage on the Michigan property."

Earlier Tuesday before news of the lawsuit broke, Hathaway denied speculation that she was resigning from the Supreme Court.

Hathaway, a Democrat, was elected to an 8-year term in 2008. If she leaves early, Gov. Rick Snyder would name a replacement. If he names a fellow Republican, his party would gain a 5-2 majority on the court.
Hathaway has not commented on the allegations.