ANN ARBOR, Mich. -

U.S. Attorney Barbara L. McQuade and Mich. Attorney Bill Schuette held a press conference Tuesday to discuss fraud charges against former Michigan Supreme Court Justice Diane Hathaway.

Hathaway pleaded guilty Tuesday in Ann Arbor federal court and now faces 1 -1/2 years in prison under a deal with prosecutors.

UNCUT: US Attorney talks on Ex-Michigan justice's fraud.

McQuade said Hathaway was involved in a fraud scheme that started in January 2010 and ended 2 years later with the short sale of her Florida home. McQuade described a short sale as selling property for a price that is lower than the amount owed on a mortgage.

Hathaway is accused of defrauding her lender, ING Direct Bank by making it appear her financial situation was less favorable than it was. "What she did that was wrong, was deceive her lender," said McQuade. "We tried to treat her no better and no worse than anyone else."

View: Hathaway indictment
View: Hathaway plea
View: Hathaway bond

McQuade said Hathaway owed $1.4 million on her Grosse Pointe Park home and was given permission for a short sale on the property in the amount of $800,000, a difference of $600,000.

--Former Michigan Supreme Court Justice Diane Hathaway

McQuade says if the bank had known Hathaway's true financial picture, it would have required her to bring between $50,000 and $100,000 to closing. Instead, Hathaway brought only $10,000. If you subtract that amount, the loss to ING is between $40,000 to $90,000. McQuade said that amount is what will drive sentencing guide lines and restitution.

"Whether you are a big shot, or a little shot or somewhere in between, it (the law) applies to everyone," said Schuette during the press conference.

The government is also dropping efforts to seize her Florida home. McQuade says if and when Hathaway makes full restitution, the government will release its interest in the property.

Prosecutors filed a lawsuit in November to seize the home, claiming it was the fruit of the fraud. When the sale was completed, the debt-free home in Windermere, Fla., went back to Hathaway.

McQuade says there's no need to seize and sell the house if Hathaway comes up with the restitution amount.

Hathaway also liquidated some retirement accounts, and provided false statements about their value, according to McQuade. "She liquidated accounts, and held onto the check for some time before the sale of her home," said McQuade.

Hathaway holds both a law and real-estate licenses. "We're talking about bank fraud for crying out loud. This bank fraud, committing a felony, this is not a late fee from the video store. This is a serious crime," said Schuette who said he sent a letter the Attorney Grievance Commission to review Hathaway's law license. Hathaway resigned from her position as justice last week.