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Former Michigan Supreme Court Justice Freed from Prison

Former Michigan Supreme Court Justice Freed from Prison

A former Michigan State Supreme Court Justice is once again a free woman following her release from federal prison after serving time for bank fraud.

Diane Hathaway, 60, was released from a minimum-security women’s prison in Alderson, West Virginia in May 2014 after serving slightly more than 40 weeks of her sentence. The facility, often referred to as “Camp Cupcake,” has been compared to college campuses.

Hathaway was sentenced to one year and one day in prison after pleading guilty to a felony charge of bank fraud, which stemmed from the short sale of a luxurious home owned by Hathaway and her husband, attorney Michael Kingsley, who was not charged in the scheme.

The U.S. Department of Justice accused the couple in a November 2012 civil filing with fraudulently concealing more than $1 million of their net worth to qualify for the short sale. In short sales, banks allow financially distressed owners to sell properties for less than the amount they still owe, which provides a significant benefit to borrowers who seek to avoid foreclosure but can’t afford to keep making mortgage payments.

Federal authorities charged Hathaway with bank fraud on January 18, 2013 after they learned she had transferred ownership of a waterfront property in Florida to her stepdaughter so she could qualify for the short sale of the couple’s home in fashionable Gross Pointe Park, Michigan, near Detroit. She told ING Direct, a federally-insured financial institution, that she could no longer afford the payments.

The sale of the $1.5 million home in Gross Pointe Park allowed the couple to erase some $664,000 in mortgage debt. The home eventually sold for $850,000; afterwards, the Hathaways transferred the Florida property back into their own name.

Hathaway earned 54 days for good behavior while incarcerated, plus a 36-day credit for time she was eligible to spend in a halfway house. The federal Bureau of Prisons declined to send her to a halfway house, however, fearing she might run into someone she had sentenced. In all, Hathaway had about three months shaved off her 366-day sentence, which her attorney, Steve Fishman, described as completely routine.

“I stand before you a broken person,” a tearful Hathaway had told U.S. District Court Judge John Corbett O’Meara at a sentencing hearing in May 2013. “I am ashamed, embarrassed, humiliated and disgraced.”

Hathaway retired from the Michigan Supreme Court on January 7, 2013, after the Judicial Tenure Commission filed a complaint seeking her suspension for “blatant and brazen” misconduct associated with private real estate transactions. [See: PLN, Dec. 2013, p.56].


Sources: Detroit Free Press,,,


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