Tagged: Diane Hathaway

Yesterday, Governor Rick Snyder finally filled the vacancy on the Michigan Supreme Court created when disgraced Justice Diane Hathaway resigned last month, just before pleading guilty to felony bank fraud. His pick was a mild surprise; David Viviano, the young chief circuit judge in Macomb County.

Later that afternoon, I was pleasantly surprised that the governor called me to explain the process by which he made this appointment. I suspect this was because I have talked and written a lot about the Michigan Supreme Court, which didn’t have the highest reputation, even before the Hathaway scandal.

Well, it’s now official: A person who ten days ago was a Michigan Supreme Court justice is now a convicted felon.

Diane Hathaway pleaded guilty yesterday in federal court to a single count of bank fraud. While on the bench of Michigan’s highest court,she temporarily transferred three of four expensive houses she and her husband owned to her stepchildren.

She did this, the federal prosecutor and the FBI said, as part of an elaborate scheme to hide assets from the bank. This was done in order to make it look like she and her husband, attorney Michael Kingsley, were suffering financial hardship.

They wanted to look worse off than they were because they wanted to convince her bank to allow her to sell yet another home they owned in Grosse Pointe Park in what’s called a short sale.

Update 11:30 a.m.

Former Michigan Supreme Court Justice Diane Hathaway stood in front of federal judge this morning and plead guilty to felony bank fraud charges. More from the Detroit Free Press:

Hathaway stood quietly at a podium in U.S District Court in Ann Arbor this morning, acknowledging she intentionally defrauded a federally-insured financial institution when she short-sold her Grosse Pointe Park home.

According to an agreement negotiated with the U.S. District Attorney’s Office, her punishment is limited to up to 18 months behind bars or could be as little as 4-10 months if a pre-sentence report determines there was no actual financial loss.

“Yes your honor, I agree,” Hathaway said to Eastern District Court Judge John Corbett O’Meara.

She is scheduled to be sentenced in May. The Detroit News reports that Hathaway's attorney, Steve Fishman, is likely to argue that her actions did not harm the bank:

Fishman has previously said Hathaway and her husband, attorney Michael Kingsley, saved the bank $150,000 by negotiating a short sale of their home rather then letting it be sold at a foreclosure auction.

But prosecutors have tripped up Hathaway on a fraud charge because she and Kingsley transferred a posh second home in Windermere, Fla., valued at $664,000, to one of Kingsley's daughters while applying for the short sale — and then got the house back after selling the Grosse Pointe Park home.

During the short sale process, in 2010 and 2011, Hathaway also acquired two other homes in Grosse Pointe Park on Windmill Pointe and Balfour Street and transferred them to her stepchildren. Hathaway's stepdaughter, Sarah Kingsley, transferred the Balfour Street back to Hathaway after the short sale of the home on Lakeview Court, public records show.

U.S. Attorney Barbara McQuade plans to hold a press conference this afternoon to talk about the Hathaway case.

10:45 a.m.

Former Michigan Supreme Court Justice Diane Hathaway is due in federal court today for an anticipated guilty plea to bank fraud. More from the Associated Press:

Hathaway is accused of concealing assets while trying to persuade a bank that she needed a short sale. That was to get rid of a Grosse Pointe Park home that carried a big mortgage.

Her hearing is set for today in Ann Arbor federal court.

Hathaway was charged Jan. 18, three days before she left the Supreme Court because of the scandal.

She and her husband transferred a debt-free Florida home to a relative before the 2011 sale of their Detroit-area home. After the short sale went through, the Florida property went back in their names.

Hathaway was elected to the Supreme Court in 2008.

This “week in review”, Michigan Radio’s Weekend Edition host Rina Miller and political analyst Jack Lessenberry discuss proposed gun laws in Michigan, who might replace former Supreme Court Justice Diane Hathaway, and the new hiring rules for emergency financial managers in the state.

Michigan Attorney General questions Hathaway's fitness as a lawyer

Michigan Attorney General Bill Schuette asked the Attorney Grievance Commission to investigate former Supreme Court Justice Diane Hathaway’s “fitness to practice law.” As the Detroit Free Press reports,

"Schuette requested the investigation as Hathaway, who officially retired Monday amid an ethics scandal, awaits a Tuesday appearance in federal court in Ann Arbor on a felony charge of bank fraud. She is expected to plead guilty. The federal charge relates to property transfers Hathaway made while seeking a short sale on a home in Grosse Pointe Park. But Schuette said in his letter to Attorney Grievance Commission administrator  that the allegations against Hathaway raise questions about her fitness to hold a law license, not just to be a judge."

Obama administration to address Detroit's abandoned buildings

"US Secretary of the Interior Ken Salazar, Senator Carl Levin and Michigan officials will host a meeting in Detroit today to talk about how tax breaks for historic preservation projects can help distressed cities. In a statement, Secretary Salazar says the Federal Historic Preservation Tax Incentives program has been used for 70 projects in Detroit since 2000. He says he wants to talk about how that program can help revitalize the city," Sarah Hulett reports.

Detroit Public Schools expect more cuts

"The Detroit Public Schools plans to shrink even more to wipe out its deficit by 2016. The district’s latest deficit elimination plan projects that enrollment will dip below 40,000 students. In order to 'stay ahead of the cost curve,' emergency financial manager Roy Roberts proposes some drastic cuts—including closing as many as 28 more schools," Sarah Cwiek reports.