Ex-Justice Diane Hathaway Off to Prison, Sentenced to 1 Year, 1 Day

May 28, 2013, 2:50 PM by  Allan Lengel

A disgraced ex-Michigan Supreme Court Justice Diane Hathaway, teary eyed and choked up, apologized to a federal judge just moments before he hit her with a sentence on Tuesday of 1 year and 1 day in prison and $90,000 in restitution.

“Your honor,  I stand before you a broken person,” she said, standing before U.S. District Judge John Corbett O'Meara in Ann Arbor.  “I’m ashamed, embarrassed, humiliated and disgraced. I have no one to blame but myself.”

Assistant  U.S. Attorney Daniel Lemisch, who stood to her right,  pushed for a sentence that reflected the guidelines, 12 to 18 months. Defense attorney Steve Fishman argued for probation.  Hathaway's husband, Michael Kingsley, who sat in the gallery, looked dejectedly down at the floor after the judge announced the sentence.

"We hope you accomplish a great deal more once you are by this thing," said O'Meara.

Afterwards, Hathaway was allowed to go home. She will  report later to prison.  The sentence of more than a year allows her to get what essentially amounts to good time.  She could get out after 8 1/2 months.

Reporters, including Ross Jones of WXYZ (right), wait outside court for judge's arrival

Hathaway, 59, who was clad in a black pant-suit on Tuesday,  pleaded guilty in January to a real estate scheme in which she transferred properties out of her name to make it look as if she had less assets, all so she could get a short sale on her Grosse Pointe Park home and get out of $600,000 she owed the bank, ING Direct.  The original mortgage was $1.4 million and the home was sold for $800,000 in the short sale.

Under the short sale,  the loss to the bank was approximately $100,000, according to the government. The government noted that she did bring $10,000 to the closing for the short sale as a closing fee, bringing the actual loss to $90,000. The judge agreed that the loss was $90,000 to the bank. 

Interestingly, it was a Democratically appointed federal judge who sentenced Hathaway, a Democrat. Had O'Meara, who was appointed by President Clinton, not given a prison term, some might have cried politics or written it off as one of the perks of being in the  judge's club.

Fishman, one of the more prominent defense attorneys in Detroit,  told the judge that he felt pressure to help Hathaway, having been a long time friend of hers and her husband. 

So he did what amounted to a skillful song-and-dance, singing her virtues, downplaying her crime and repeatedly urging the judge to give her community service. 

He applauded her for taking responsibility immediately, and avoiding going to trial and creating a "circus like atmosphere" that was recently before U.S. District Judge Nancy G. Edmunds. His reference was to the Kwame Kilpatrick trial. 

He talked about all the good she has done in the community. And he said this had left her with permanent stain on her name.

"Is that enough?" he asked. "I say it's enough." He said the ex-judge had been living in Florida to avoid the public humiliation and harassment from the media. 

But prosecutor Lemisch countered by saying she could have paid her mortgage, but chose to dupe the bank by hiding and transfeing assets  so she could get a short sale. Under a short sale, banks let distressed owners sell properties for less than what's owed on them. The owner must show they can't afford to pay the mortgage any longer.

 "We don't ask you to sentence Diane Hathaway on who she. We ask you you to sentence Diane Hathaway for what she did. Justice Hathaway should not only have known better... she should have conducted herself better."

Outside the courthouse, Fishman told Deadline Detroit:

"It's disappointing. Diane is a really good person who has already paid a big price. But as her friend, I am confident she will come through this as a stronger person."

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