Michigan Supreme Court Justice Diane Hathaway charged with bank fraud

Judge accused of hiding real estate in Florida to get deal on sale in Michigan

Published On: Jan 30 2013 04:23:23 PM EST   Updated On: Jan 19 2013 06:39:35 PM EST
Diane Hathaway graphic
DETROIT -

Federal prosecutors have filed a fraud charge against Michigan Supreme Court Justice Diane Hathaway, just a few days before she leaves the state's highest court in a scandal involving the sale of a Detroit-area home and suspicious steps taken to conceal property in Florida.

The charge was filed Friday as a criminal "information," which means a guilty plea is expected in federal court. Defense attorney Steve Fishman declined to comment Saturday.

With federal investigators already breathing down her neck, the Judicial Tenure Commission is launching an investigation into Hathaway's behavior

Hathaway is retiring Jan. 21.

Hathaway and her husband, Michael Kingsley, deeded a Florida home to a relative while trying to negotiate a short sale on a house they couldn't afford in Grosse Pointe Park.

The sale went through and erased a $600,000 debt to a bank. The Windermere, Fla., home then went back in their names.

The bank fraud charge says Hathaway made false statements to ING Direct, transferred property to others and failed to disclose available cash — all in an effort to fool the bank into believing she had a financial hardship. Kingsley has not been charged.

Hathaway, 58, filed retirement papers with the state Dec. 20, but it was not publicly disclosed until Jan. 7 when a state judicial watchdog filed misconduct charges against her for the real estate transactions. Her last day as a justice is Monday, although Hathaway has not participated in court business for two weeks.

She was halfway through an eight-year term on the court, the result of a major election upset over then-Chief Justice Cliff Taylor in 2008. Hathaway's victory put Democrats in control of the court for a two-year period. She was a Wayne County judge before joining the Supreme Court