Disgraced Judge Diane Hathaway

 

Michigan Supreme Court Justice Diane Hathaway (in office since 2009) has been charged with bank fraud for real estate shuffling on properties in Michigan and Florida. Hathway is expected to plead guilty in federal court. Hathaway initially denied the allegations, and fought resignation. After an FBI probe and public demands to step down, Hathaway will retire from the Michigan Supreme Court on Jan 21, 2013.

Hathaway is accused of shuffling personal real estate to avoid debt and foreclosure on properties that she owned. She also hid her income and assets from the bank handling her mortgage, and property transactions. Hathaway is accused of transferring two properties in into the names of of her stepchildren, to arrange a short sale on those properties. A short sale means that a bank agrees to take a loss in approving the sale of a home for less than is owed on the mortgage in order to avoid foreclosure. The mortgage holdermust show financial hardship to qualify. After the short sale was complete, Hathway reclaimed ownership of the homes.

“It was claimed that after the hardship sale of her lakefront home (reportedly mortgaged for $1.5 million) in Grosse Pointe Park was finalized, Justice Hathaway put another home — a debt-free property in Windermere, Fla., valued at about $644,000[16] — back into her name. The short sale of the Grosse Pointe home allegedly allowed Hathaway to avoid foreclosure proceedings and walk away from $600,000 in mortgage debt.

Another Grosse Pointe home, purchased for $195,000 in cash by Hathaway’s stepdaughter Sarah Kingsley, was also transfered into Hathaway’s name after the short sale. No money changed hands in the transaction back to Hathaway for the home which would become, and remains, Hathaway’s reported personal residence.” (Wikipedia)

Hathway has held a real estate license since 1987, and a broker’s license since 1990.

In the civil complaint, U.S. Attorney Barbara L. McQuade charged that Hathaway and her husband, trial attorney Michael J. Kingsley, “systematically and fraudulently transferred property and hid assets in order to support their claim to (ING Direct) that they did not have the financial resources to pay the mortgage on the Michigan property.” (Wikipedia)

There is a new fight to demand that Hawathway give up her pension plan
“so Michigan taxpayers are not used to pay a public official who violated the public trust.” (Detroit Free Press). The maximum penalty for bank fraud is 30 years in prison.

I think they should make an example of Hathaway and give her a harsh sentence, and send the message judicial corruption will not be tolerated.

Sources:

Detroit Free Press. “Justice Diane Hathaway faces fraud charge in real estate sale”. By Tammy Stables Battaglia and Paul Egan. Jan 20, 2013- http://www.freep.com/article/20130120/NEWS05/301200209/Justice-Diane-Hathaway-faces-fraud-charge-in-real-estate-sale?odyssey=nav%7Chead

Michigan Live. “Michigan Supreme Court Justice Diane Hathaway denies rumors of resignation amid FBI probe”. By Khalil AlHajal. November 20, 2012-http://www.mlive.com/news/detroit/index.ssf/2012/11/michigan_supreme_court_justice_1.html

Wikipedia, Diane Hathaway: http://en.wikipedia.org/wiki/Diane_Hathaway

Wood TV 8 -“MI Justice Hathaway charged with fraud, Will be resigning from MI Supreme Court Monday”. Associated Press. Jan 19, 2013-
http://www.woodtv.com/dpp/news/michigan/mi-justice-hathaway-charged-with-fraud

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