Traverse City Record-Eagle

Archive: Wednesday

January 30, 2013

Ex-Mich. justice pleads guilty to bank fraud

ANN ARBOR —

Ex-Mich. justice pleads guilty to bank fraud

A former Michigan Supreme Court justice pleaded guilty to bank fraud Tuesday for concealing assets, including a Florida home she and her husband owned, while urging a bank to let her unload a Michigan house in a short sale, claiming financial hardship.

Diane Hathaway could face up to 18 months in prison under the terms of her deal with federal prosecutors. But her attorney, Steve Fishman, said after the hearing that he will ask a judge to sentence her to probation.

Hathaway, 58, who resigned from the state's highest court last week, left the courthouse without commenting. U.S. District Judge John Corbett O'Meara had allowed her to answer "yes" to a series of questions about her misdeeds that were read by Fishman.

Fishman told reporters that her crime was "dumb. It made no sense." He believes the bank, ING Direct, would have allowed the short sale even if Hathaway had disclosed everything.

"She feels terrible. She let down a lot of people," Fishman said.

Prosecutors say Hathaway and her husband, Michael Kingsley, a lawyer who has not been charged, transferred their Florida property to a relative so that they could show financial hardship and have a better chance of qualifying to short-sell their Grosse Pointe Park home, which carried a mortgage of $1.4 million.

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