Michigan Supreme Court Justice Diane Hathaway Charged With Criminal Bank Fraud
Diane Hathaway, Michigan Supreme Court Justice, Charged With Fraud
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 it was negotiated and that a guilty plea is expected in federal court. Defense attorney Steve Fishman declined to comment Saturday.
Hathaway is resigning Monday, months after a series of questionable real estate transactions first were revealed by a Detroit TV station. Hathaway and her husband, Michael Kingsley, deeded a Florida home to Kingsley’s daughter while trying to negotiate a short sale on a house they couldn’t afford in Grosse Pointe Park.
In a short sale, a bank agrees to a sale that wipes out any remaining mortgage, a significant benefit for any borrower. The 2011 deal went through and erased the couple’s $600,000 debt in Michigan. Five months later, in 2012, the debt-free Windermere, Fla., home worth more than $600,000 went back in their names for $10.
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 severe financial hardship. Kingsley, also a lawyer, has not been charged.