By Gary Gosselin
Dolan Media Newswires
Former Michigan Supreme Court Justice Diane M. Hathaway has been sentenced to one year and one day in prison for her role in hiding assets in order to obtain permission to short sell a home in Grosse Pointe.
She pleaded guilty to bank fraud charges in federal court Jan. 29, just eight days after she officially stepped down from her seat at the high court. Hathaway was facing up to 18 months in federal prison.
Her attorney, Steve Fishman, had asked U.S. District Judge John Corbett O'Meara for probation and community service. U.S. Attorney Barbara McQuade had asked for 12 to 18 months in jail, restitution and up to a $30,000 fine.
“This was not a crime resulting from a single decision or a momentary impulse,” Assistant U.S. Attorney Daniel Lemisch wrote in the government's sentencing memo, reported in The Detroit News. “This was a calculated crime that was committed over a significant period of time and involved the use of the defendant's own stepchildren to aid in the concealment of assets.”
Hathaway, speaking publicly for the first time, was on the verge of tears while speaking to O'Meara.
“Your honor, I stand before you a broken person,” said Hathaway, 59. “I am ashamed, embarrassed, humiliated and disgraced, and I have no one to blame but myself. I take full responsibility for my acts and am truly sorry for the choices I made.”
Hathaway allegedly transferred the title of two homes into the names of her stepchildren in order to help the short sale of her Grosse Pointe Park home go through, saving an estimated $600,000. Soon after, she transferred title of the two other homes back.
Mortgage lender ING Direct told prosecutors Hathaway's concealment of assets while seeking a financial hardship to unload a $1.5 million Grosse Pointe Park home for $850,000 on a short sale only set the lender back $40,000 to $90,000, after she paid $10,000 at closing, according to the report.
Once Hathaway pays her restitution, federal prosecutors have agreed not to pursue forfeiture of her second home in Florida.
According to the News, ING Direct determined it would have demanded $50,000 to $100,000 from Hathaway before the short sale if loan officers had known about the assets and available cash she concealed in a “scheme” to get mortgage relief, McQuade said.
On Feb. 27, Gov. Rick Snyder appointed David Viviano as Hathaway's replacement on the Supreme Court.
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