Unusual defendant in mortgage fraud case: a judge

On Behalf of | Jun 5, 2013 | White Collar Crimes |

There are many criminal offenses that involve some form of fraud. The essence of the offense is typically some form of concealment.

Mortgage fraud is one those forms. It often includes misstatements made in loan applications in order to obtain financing for a real property purchase.

In the St. Louis area and across the country, it is generally handled as a federal offense. There are also state-level charges that are possible in such cases. Rarely, however, is the defendant in such cases a sitting judge.

Yet that is what happened in a recent Michigan case. Last week, a federal judge sentenced Diane Hathaway, a former justice of the Michigan Supreme Court, to a year in prison for mortgage fraud.

Hathaway was found to have concealed assets from her lender when seeking to execute a short sale on her personal residence. The bank agreed to the sale, accepting less than it was owed.

But before the sale, Hathaway had made fraudulent transfers to family members in order to hide her assets from the bank. The hidden assets included a debt-free home in another state.

Hathaway’s attorney had requested a sentence of probation and community service. But the judge sentenced her to a federal prison term of a year and a day. The former judge would most likely not be behind bars for that long, however, because federal prison terms are normally completed through a period of supervised release in the community.

The former judge was emotional and remorseful at her sentencing. She described herself as a broken person, deeply ashamed and disgraced.

Source: The Huffington Post, “Diane Hathaway, Ex-Michigan Supreme Court Judge, Sentenced to Prison For Faud,” Ed White, May 28, 2013


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