Hathaway will be back in court on the other side of the bench - DC Breaking Local News Weather Sports FOX 5 WTTG

By Charlie LeDuff
Fox 2 News

DETROIT (WJBK) -- Justice Diane Hathaway packed her bags and retired from the Michigan Supreme Court on Monday just half way through her term.  But that won't be her last appearance in court as she's been charged by the U.S. Attorney with bank fraud -- hiding other homes in order to get a short sale on her Grosse Pointe Park home.

Last November, I reported on a tale of four houses.  Let's begin with the one on Lakeview where she lived with her husband, a successful slip and fall lawyer.  They said they couldn't afford the $1.5 million mortgage and had to move out, so the bank allowed them to sell the place for about half of what they owed on it.  That's called a short sale.

Before she was approved for the short sale, Hathaway gave away one of her homes to her stepdaughter -- a swanky pad in Florida with a boat dock.  She gave another house to her stepson.  It's just a stone's throw from the short sale house.

Another stepdaughter bought a house in Grosse Pointe Park for $200,000 just months before the short sale, and just a few months after the short sale, the stepdaughter signed it over to the judge, just signed it over to her.  Then the other stepdaughter after the short sale went through signed the Florida house back over to the judge, just signed it back over to her.

Andy Arena, director of the Detroit Crime Commission, said it appears that the ex-justice may have already cut a deal with prosecutors, which may include prison time.

"She's going to do some jail time," he said.  "I think they're going to look at this, the environment that we're living in right now in Southeast Michigan, I think the hammer's going to fall."

We reached out to Hathaway's criminal lawyer and even stopped by her new Grosse Pointe Park home.  We got an answer from neither of them.

In any event, the former judge will have to tell it to the federal judge and that could come as early as this week.  In the meantime, Governor Snyder is mulling a decision on who to replace her with.

"We do merit process in terms of really looking at people that are interested, looking at their backgrounds and going through that.  So I want to be thoughtful about that.  So it could take several weeks," the governor said.