DETROIT (WWJ) – Former Michigan Supreme Court Justice Diane Hathaway has pleaded guilty to felony bank fraud.
Reporting from outside federal court in Detroit, WWJ Legal Analyst Charlie Langton said Hathaway will be sentenced to up to 18 months in prison and will be ordered to pay a fine of $30,000 and restitution of $90,000.
A press conference was held was held by U.S. Attorney Barbara McQuade and Michigan Attorney General Bill Schuette after the guilty plead by Hathaway.
Schuette says the oath taken to uphold the law and protect the Constitution should not be violated.
“Since the allegation of bank fraud by Justice Hathaway were reported, a cloud of controversy has hung over the Michigan Supreme Court, indeed a cloud of corruption has tarnished the Michigan judiciary,” said Schuette.
U.S. Attorney McQuade said that “Justice Hathaway admitted her guilt, she admitted she devised a scheme to defraud her lender; ING Direct Bank in obtaining the short-sale by making it appear that her financial situation was less favorable that it actually was.”
“Justice Hathaway executed a fraud scheme that began in January 2010 – lasted almost two years – until November of 2011 with the short-sale of her home,” McQuade said.
Hathaway resigned in mid-January, months after a series of suspicious real estate transactions were revealed. The government said Hathaway and her husband deeded a Windermere, Fla. home to a relative while trying to negotiate a short sale on a house they couldn’t afford in metro Detroit.
When the sale went through, the Florida home went back into their names.
“Justice Hathaway admitted on the record that she developed a scheme to hide her true worth and she made illegal real estate transfers in order to hide her wealth,” Langton said.
Hathaway quietly filed retirement papers with the state on Dec. 20 . Her term was to expire January 1, 2017.
According her biography on a government website, Hathaway obtained a real estate broker’s license and taught real estate law and continuing education classes to real estate brokers.
Hathaway will be sentenced on May 28.