A Michigan Supreme Court justice who resigned from the bench earlier this month has pleaded guilty to bank fraud.
Diane Hathaway was charged on Jan. 18 with hiding assets to qualify for mortgage-debt relief on a home she and her husband owned in Gross Pointe, Mich. She faces up to 18 months in jail.
Hathaway, 58, pleaded guilty in U.S. District Court in Ann Arbor, Mich., to one count of federal bank fraud. Prosecutors charged that she orchestrated a scheme that involved falsifying information on a hardship letter to a mortgage lender and transferring assets to qualify for a short-sale. The short-sale enabled Hathaway and her husband, attorney Michael Kingsley, to sell their home at a loss without having to repay the amount still owed on the mortgage. Kingsley was not charged.
Hathaway, who filed papers in December to resign from the bench effective on Jan. 21, was the subject of complaint by the Michigan Judicial Tenure Commission alleging numerous judicial conduct violations related to the sale of her house. She also faced a civil lawsuit brought by U.S. Attorney Barbara McQuade seeking forfeiture of some of the couple’s property.
Representing Hathaway in the criminal matter is attorney Steve Fishman, who did not respond to messages seeking comment. Prosecuting the case for the McQuade’s office was Daniel Lemisch, who was not available for comment.
A Democrat, Hathaway was elected to an eight-year term in 2008. She made $164,610 as a Michigan Supreme Court justice. Before that, she sat as a judge of the Wayne County, Mich., Circuit Court. She graduated from Detroit College of Law in 1987 and held a real estate broker’s license.
Republican Governor Rick Snyder is expected to appoint her replacement. His selection could extend the court’s conservative majority from 4-3 to 5-2.