Editors Choice

Short Sale Mortgage Fraud by Former Supreme Court Justice Earns Her a Year and a Day in the Slammer

On May 28, 2013, Hathaway appeared before Judge O’Meara in Ann Arbor and was sentenced to 366 days in federal prison.


Short sale justice. Former Michigan Supreme Court Justice Diane Hathaway ends up with a year in jail for mortgage fraud.

Department of Justice
U.S. Attorney’s Office
Eastern District of Michigan
Tuesday, May 28, 2013 | Republished by LIT: Dec. 28, 2020

Former Michigan Supreme Court Justice Diane Marie Hathaway Sentenced On Bank Fraud Charge

Diane M. Hathaway, a former Michigan Supreme Court Justice, was sentenced today to one year and one day in federal prison, after having pleaded guilty in January to committing bank fraud in connection with a property in Grosse Pointe Park, Michigan, United States Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Special Agent in Charge Robert D. Foley, III of the Federal Bureau of Investigation (“FBI”), and Michigan Attorney General, Bill Schuette.

At the time of the plea before United States District Judge John Corbett O’Meara, Hathaway, 58, of Grosse Pointe, Michigan, admitted that between 2010 and 2011 she knowingly engaged in a scheme to defraud ING Direct bank by concealing assets from the bank to qualify for a “short sale.”

A short sale is a forgiveness of debt by the bank to a borrower who claims financial hardship. Hathaway was also ordered to pay restitution in the amount of $90,000.

United States Attorney McQuade said

“We have made mortgage fraud a priority in this district because of the harm this crime causes to our housing markets in the aggregate. Homeowners who play by the rules should know that those who don’t will be held accountable, no matter who they are.”

Michigan Attorney General Schuette said

“Public corruption scandals have damaged the public’s trust in government and tarnished our state’s reputation.  No matter who you are or what position you hold, the same rules apply.  I supported U.S. Attorney Barbara McQuade’s request for prison time, and I appreciate her efforts, along with those of FBI Special Agent in Charge Bob Foley, to bring this case to a close.”

Robert Foley, Special Agent in Charge of the FBI said

“Regardless of a person’s stature or position in life, we must all follow the same set of rules. In this case, an individual in a prominent position of public trust made extremely poor choices that have resulted in criminal activity. The FBI is committed to stopping these illegal acts.”

This case was investigated by the FBI with assistance from Michigan Attorney General’s Office.

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Short Sale Mortgage Fraud by Former Supreme Court Justice Earns Her a Year and a Day in the Slammer
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