CRIME

Diane Hathaway Retires: Michigan Supreme Court Justice Gives Resignation After Scandal

01/07/2013 05:02 pm ET

Michigan Supreme Court Justice Diane Hathaway announced Monday that she will retire from the bench on Jan. 21. Her announcement followed a state judicial commission's formal complaint recommending her immediate suspension.

According to the Detroit Free Press, Monday's complaint issued from Michigan's Judicial Tenure Commission cited Hathaway's alleged “blatant and brazen violations” of judicial conduct rules that the body called “unprecedented in Michigan judicial disciplinary history.” According to the report, Hathaway has agreed not to participate in oral arguments or other Court dealings until her retirement is official. She has 14 days to respond to the charges.

Hathaway, a Democrat nominee who was elected to the bench in 2008, has resisted calls to resign since October 2011, when the news broke that her private real estate transactions were the subject of an FBI investigation.

It's alleged that Hathaway and husband Michael Kingley misrepresented their net worth in order to secure a short sale of their $1.5 million-dollar mansion in the tony neighborhood of Grosse Pointe Park. That home was sold in a short sale by ING Bank for $850,000, which allowed the Judge and her husband to escape over $600,000 worth of mortgage debt. Participants usually are required to prove a hardship in order to qualify for a short sale. According to WXYZ, Hathaway's legal representation told bank officials she was retiring from the bench in 2011.

But in a civil forfeiture action filed by the U.S. Justice Department, Hathaway and Kingsley are alleged to have transferred possession of a home in Florida to Kingsley's daughter in order to qualify for the sale. Another home in Grosse Pointe Park was transferred to Hathaway's stepson, possibly so the short sale would be approved. Their Florida home is worth $750,000, according to WXYZ. After the short sale was approved, the TV station says the Florida home was transferred back into Hathaway's name.

Federal officials recently attempted to have Hathaway's Florida home forfeited, alleging bank fraud or money laundering. A 90-day stay on those proceedings was issued in December.

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