MICHIGAN SUPREME COURT CHIEF JUSTICE CHARGED WITH FRAUD

7/29/2019 MICHIGAN SUPREME COURT CHIEF JUSTICE CHARGED WITH FRAUD

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Michigan Supreme Court justicecharged with fraud

6:52p.m. EST January 19, 2013

(Photo: Al Goldis, AP)

Story Highlights

• A guilty plea is expected• Hathaway is resigning Monday• The maximum penalty is 30 years in prison

DETROIT (AP) — Federal prosecutors have filed a fraud charge againstMichigan Supreme Court Justice Diane Hathaway, just a few days beforeshe leaves the state's highest court in a scandal involving the sale of aDetroit-area home and suspicious steps taken to conceal property inFlorida.

The charge was filed Friday as a criminal "information," which means itwas negotiated and that a guilty plea is expected in federal court. Defenseattorney Steve Fishman declined to comment Saturday.

Hathaway is resigning Monday, months after a series of questionable realestate transactions first were revealed by a Detroit TV station. Hathawayand her husband, Michael Kingsley, deeded a Florida home to Kingsley'sdaughter while trying to negotiate a short sale on a house they couldn'tafford in Grosse Pointe Park.

In a short sale, a bank agrees to a sale that wipes out any remainingmortgage, a significant benefit for any borrower. The 2011 deal wentthrough 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 INGDirect, transferred property to others and failed to disclose available cash

— all in an effort to fool the bank into believing she had a severe financialhardship. Kingsley, also a lawyer, has not been charged.

Hathaway has refused to make any lengthy public comments. She toldWXYZ-TV last spring that the property shuffles were a private matter.

The maximum penalty for bank fraud is 30 years in prison, although thatwould be a rare punishment for anyone and very unlikely for Hathaway.Nonetheless, some time in custody should be expected, predicts former federal prosecutor Lloyd Meyer of Chicago.

"Any bank robber who robs a bank with no gun and just a note goes awayto prison. A judge who steals over half a million dollars should enjoy thesame fate," said Meyer, referring to the amount of debt written off after theshort sale. "As a former federal prosecutor, it would be unthinkable tohave this type of defendant get a slap on the wrist."

U.S. Attorney Barbara McQuade declined to comment on Hathaway'spossible punishment or other aspects of the case. The case is assigned toU.S. District Judge John Corbett O'Meara in Ann Arbor.

Hathaway, 58, filed retirement papers with the state Dec. 20, but it was notpublicly disclosed until Jan. 7 when a state judicial watchdog filed anethics complaint against her for the real estate transactions, calling them"blatant and brazen" violations of professional conduct as a judge. Her lastday as a justice is Monday, although Hathaway has not participated incourt business for two weeks and has vacated her offices.

It was no secret Hathaway was under scrutiny by prosecutors. Thegovernment filed a lawsuit in November to seize the Florida home as thefruit of bank fraud. The civil case is pending and likely will be consolidatedwith the criminal case.

Hathaway was halfway through an eight-year term on the court, the resultof a major election upset over then-Chief Justice Cliff Taylor in 2008. Her victory put Democrats in control of the court for a two-year period. Shewas a Wayne County judge before joining the Supreme Court.

Chief Justice Robert Young Jr., a Republican, released a statement, inwhich he said the scandal diminishes the public's trust in government. He



said Hathaway's departure and the criminal charge "bring to a close anunhappy, uncharacteristic chapter in the life of this court."

Republican Gov. Rick Snyder will choose Hathaway's successor and likelystretch the GOP's majority to 5-2.

http://www.usatoday.com/story/news/nation/2013/01/19/michigan-justice-fraud/1848109/





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MICHIGAN SUPREME COURT CHIEF JUSTICE CHARGED WITH FRAUD