Michigan Justice Diane Hathaway retires amid bank fraud charges

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

LANSING – Diane Hathaway is now a former Michigan Supreme Court Justice. 

She stepped down Monday while facing a federal charge of bank fraud. 

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.

Hathaway is accused of concealing her ownership in a Florida home, in order to convince a lender that she qualified for a short sale of her $1.5 million home in Grosse Pointe Park. The transaction allegedly saved her $600,000. 

Peter Henning, a professor at the Wayne State University Law School, believes a guilty plea is imminent. He said the sentencing guidelines would call for about two and a half years in prison. 

"The judge that sentences her has to be concerned about what message is sent: Do you cut a break to a sitting Supreme Court Justice who has to know better?" Henning said.  

Hathaway also faces the loss of her law license. 

Gov. Rick Snyder will appoint a replacement "sooner than later," according to his press decretary Sara Wurfel.  

Last year, the Michigan Judicial Selection Task Force recommended that when Supreme Court vacancies occur, a non-partisan panel should screen candidates, and then submit three to five names for a governor to choose from.

Snyder has signaled interest in the concept, but is doing his own search. 

"He's focused on finding the best, most qualified and ethical candidate," said Wurfel. "Whomever is the governor's appointee will be reviewed and rated as to their experience and qualifications by the Michigan State Bar." 

Assuming Snyder appoints a Republican, his party will have a 5-2 majority. 

Hathaway 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.

Where the story began:

Michigan Supreme Court justice denies wrongdoing in bank fraud allegations

Lawyer says Michigan Supreme Court justice will fight to keep house

Commission wants Michigan justice suspended in fraud case

Lawyer says Michigan Supreme Court Justice Diane Hathaway will retire Jan. 21