David Saks: Disgraced State Supreme Court Justice Sentenced for Short Sale Fraud

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Disgraced State Supreme Court Justice Sentenced for Short Sale Fraud

Disgraced Former Michigan Supreme Court Justice Diane Marie Hathaway

Sentenced on Bank Fraud Charge

U.S. Attorney’s Office May 2013
  • Eastern District of Michigan (313) 226-9100
 

The Former Michigan Supreme Court Justice,

Diane M. Hathaway

Diane Hathaway

was sentenced to one year and one day in federal prison.

She pleaded guilty in January to bank fraud .

At the time of the plea Hathaway admitted that, between 2010 and 2011, she engaged in a scheme to defraud ING Direct bank by concealing assets from the bank to qualify for a “short sale.”

Hathaway was ordered to pay restitution in the amount of $90,000.

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

source: FBI
 
 
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Comment balloon 40 commentsDavid Saks • May 30 2013 10:54AM

Comments

Excellent news. More people should be held accountable for this sort of fraud, although the prisons would soon be overflowing.
Posted by Susan Haughton, Susan & Mindy Team...Honesty. Integrity. Results. (Long and Foster REALTORS (703) 470-4545) over 6 years ago

When you play with fire you could get burned, sometimes you win and sometimes you lose,  keep up the good work and good luck with your business,  E

Posted by Ed & Tracy Oliva, The Oliva Team Arizona Agents (West USA Realty - Arizona) over 6 years ago

I wonder if this will really change anything as most borrowers assume that they are flying under the radar.

Posted by Richard Weisser, Richard Weisser Retired Real Estate Professional (Richard Weisser Realty) over 6 years ago

Very sad that our elected officials do such things..

Posted by Joe Jackson, Clintonville and Central Ohio Real Estate Expert (Keller Williams Capital Partners Realty) over 6 years ago

Just sad. This is like when the celebrities short sale their $14 million fourth home. Just a shame that someone in that position would be just as abusive of rules as some she's probably seen in her court room.

Posted by Aaron Hofmann, aka Mr. Smyrna Vinings (Atlanta Communities) over 6 years ago

I sure no stone was left unturned to make sure this case did not fall through the cracks. I sure the want to make this a point that if you think you can get away with something when dealing with Real Estate and Fraud ..... think twice.  I was a bit surprised with the dollar amounts looking at the restitution amount of $90,000, was expecting more.

Posted by Chuck Mixon, Cutler Bay Specialist, GRI, CDPE, BPOR (The Keyes Company) over 6 years ago

David, in this case no one was above the law. Justice was served.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA over 6 years ago
If they were forward with the finances the bank may have allowed them to continue with the short sale with a promissory note.
Posted by Keith Lawrence, ABR, CDPE, SFR, 203K Specialist (Christie's International) over 6 years ago

Fraud in Michigan?  No way...next you'll tell me that fraud is rampant in Chicago too.

Posted by Marc McMaster, Putting my clients before myself (RE/MAX Centre Realty) over 6 years ago

At a loss for words. They qualify for short sale and regular folks do not.

Posted by Brian Schulte, SFR, Sierra Vista, AZ (Allison James Estates & Homes) over 6 years ago

And I hope the full extent of the law will apply to her, as it does to every other citizen. How the world could a Supreme Court justice ever qualify for short sale?

Posted by Richard Iarossi, Crofton MD Real Estate, Annapolis MD Real Estate (Coldwell Banker Residential Brokerage) over 6 years ago

Real Estate attracts fraud...The lure of big money does it every time...The funny part is...people get caught every time too

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) over 6 years ago

Greed and scams are committed on all levels.  Some get away with it and some get caught.

Posted by Denise Watkins, Realtor Serving DC and MD (Tristar Realty, INC) over 6 years ago

The prisons are overflowing, Susan. Here's proof:

Real Estate Crimes

Posted by David Saks ((retired)) over 6 years ago

Glad the FBI extinguished that fire, Ed & Tracy.

Posted by David Saks ((retired)) over 6 years ago

This time they flew into the mountainside, Richard.

Posted by David Saks ((retired)) over 6 years ago

Very, very sad, Joe.

But I'm not wiping away tears for the swindler. I'm glad she was caught.

Posted by David Saks ((retired)) over 6 years ago

It's a common crime Aaron.

I hope that the FBI will review her past court cases to determine if any bribes or kickbacks determined their outcome.

Posted by David Saks ((retired)) over 6 years ago
David, Thanks for posting this! It's good news that this "judge" is being sentenced, but it's so disgusting that the people whom we trust to uphold the law will break it in such a terrible way.
Posted by Wayne and Jean Marie Zuhl, The Last Names You'll Ever Need in Real Estate (Samsel & Associates) over 6 years ago

The FBI brings out the snake handler when they find one under the stone, Chuck.

Posted by David Saks ((retired)) over 6 years ago

Michael, in this case, justice was jailed.

Posted by David Saks ((retired)) over 6 years ago

Keith, her attorney argued in court that Hathaway and her husband saved the bank $150,000 by negotiating a short sale of their home rather than letting it be sold at a foreclosure auction.

He said that ING Direct would have granted Hathaway and Michael Kingsley a short sale if ING had known about the other homes and cash to buy them.

Prosecutors filed a fraud charge because Hathaway deeded her Windermere, Fla., home, which was valued at $664,000, to her stepdaughter while she applied for the short sale — and then she got the house back after selling her Grosse Pointe Park home.

During the short sale, in 2010 and 2011, Hathaway bought two more homes with $363,000 she cashed out from her retirement accounts and transferred the homes to her stepchildren.

Hathaway's stepdaughter, Sarah Kingsley, transferred a home back to Hathaway after the short sale.

This is a great quote:

"Diane Hathaway was a crook who used her robes instead of a gun to rob a bank of tens of thousands of dollars," said Dan Pero, President of the American Justice Partnership.

"She then blatantly and repeatedly lied about her actions to deceive investigators and cling to power.

She is now going to jail and that's where she belongs."

Pero is a former member of the Michigan Judicial Tenure Commission (JTC), and filed the initial formal complaint against Hathaway with the JTC"

Posted by David Saks ((retired)) over 6 years ago

Click this itsy bitsy red button and find out, Marc:

Real Estate Crimes

Posted by David Saks ((retired)) over 6 years ago

They qualify for the hoosgow, Brian.

Posted by David Saks ((retired)) over 6 years ago

It is always amazing to me that the people who we trust with making fair and impartial decisions on legal matters are often those who violate the laws for their own benefit.  I think that their penalty for violating the laws should be multiplied.  One year and a day seems way too light for this crime, especially when considered who broke the law.

Posted by Roger Stensland, Let's Move! (Keller Williams Realty Puget Sound) over 6 years ago

By committing fraud, Richard.

Posted by David Saks ((retired)) over 6 years ago

It seems as though more crooks are in prison these days for real estate fraud than drug-related crimes, Richie (unless referring to Medicare fraud).

Posted by David Saks ((retired)) over 6 years ago

Fewer get away with it, more get caught, Denise.

I don't believe that anyone really ever gets away with it.

It's a depraved financial crime. One of moral turpitude.

Posted by David Saks ((retired)) over 6 years ago

Elected, appointed, greed-driven sworn officials break the law and violate the public trust of our nation everyday single day, Wayne and Jean Marie.

Posted by David Saks ((retired)) over 6 years ago

Legislators rewrite the laws with their own nefarious system of principles and beliefs to accomodate their personal interests, Roger, to the exclusion of all others.

Posted by David Saks ((retired)) over 6 years ago

You would think a judge would know better.  I guess the appeal of the dollar was tooooo much.

Posted by Edward & Celia Maddox, EXPERIENCE & INTEGRITY - WE TAKE THE HIGH ROAD (The Celtic Connection Realty) over 6 years ago

She wasn't very good at real estate math, Ed and Celia.  She might do better counting the days in her cell.

Posted by David Saks ((retired)) over 6 years ago

Awesome. Thanks for posting this and congratulations on the feature. Stupid Judge.

Posted by Greg Nino, Houston, Texas (RE/MAX Compass, formerly RE/MAX WHP) over 6 years ago

It's alarming just how many stupid, arrogant, negligent, dangerous judges there actually are, and have been, Nino.

Here's an interesting site:

JAIL 4 Judges

And this one:

Arrested Judges

Posted by David Saks ((retired)) over 6 years ago
I read a few of these post last night thru the link you sent me. I would like to see some agents out of business.
Posted by Michael Blue, REALTOR - 760-889-8877, Encinitas/Carlsbad (Home Smart Realty West) over 6 years ago

Wow - to err is human, but to be a fraud is well...I don't know.  thanks for sharing.

Posted by Venus Howard, CDPE, CIAS, SFR, GRI (Re/Max Alliance) over 6 years ago

Many of them are, Michael. Permanently.

Posted by David Saks ((retired)) over 6 years ago

To err is human.

To be a fraud is Jabba the Hut, Venus.

Jabba the Hut

Posted by David Saks ((retired)) over 6 years ago
Oh man, I love it! Now, they need to go after the loan originators who fraud end the banks which got us in this mess.
Posted by Gary Frimann, CRS, GRI, REALTOR and Broker (Eagle Ridge Realty / Signature Homes & Estates) over 6 years ago

I'm sure they will, Gary.

Posted by David Saks ((retired)) over 6 years ago

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