Michigan Supreme Court Justice Hathaway retires amidst claims of fraud and money laundering

January 8, 2013

Michigan: Yesterday, Justice Diane Hathaway announced her retirement from the Michigan Supreme Court, effective January 21, 2013, following a scathing complaint by the Michigan Judicial Tenure Commission. The complaint, which called for her suspension, accused her of "blatant and brazen violations” of judicial conduct rules that were “unprecedented in Michigan judicial disciplinary history.” Hathaway and her husband, Michael Kingsley, are accused of fraudulent real estate practices and are currently being investigated by the FBI.

The U.S. Justice Department, in November, accused Hathaway and Kingsley of hiding their net worth by temporarily transferring ownership of a home they own in Florida to a family member. This allegedly allowed them to make a short sale, where the lender sells for less than the amount owned on the property, on a home in Grosse Pointe Park in 2011. The sale effectively eliminated $600,000 of their mortgage debt. Afterwards, they took ownership of their Florida home again. The couple has maintained their innocence.

Hathaway's decision to retire means the Judicial Tenure Commission's charges will be dropped. However, the scandal will have a lasting effect on the state's high court, since it will allow Republican Governor Rick Snyder to appoint a new justice. Since Hathaway is a Democrat, this new appointment will likely increase the Republican majority from 4-3 to 5-2.