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.
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.