Report: Former Mich. SC justice reports to prison

By Jessica M. Karmasek | Aug 13, 2013

ALDERSON, W.Va. (Legal Newsline) -- Former Michigan Supreme Court Justice Diane Hathaway, who pleaded guilty to bank fraud, reported to prison Tuesday.

According to WXYZ-TV in Detroit, Hathaway will serve her 12-month, one day sentence at an Alderson, W.Va., prison often referred to as "Camp Cupcake."

Lifestyle mogul Martha Stewart, who was convicted of charges related to insider training in 2004, served her time at the same facility.

Prosecutors argued in a sentencing memorandum filed in May that jail time would serve to "adequately punish" Hathaway for her "methodical, thoughtful and sophisticated criminal conduct" that spanned over two years and caused about $100,000 in losses to a financial institution.

"In addition, this sentence would deter the defendant and others from future criminal conduct and, in particular, economic crime," U.S. Attorney Barbara McQuade wrote.

The former justice took office in 2009 and served until her resignation in February.

Hathaway stepped down after pleading guilty to committing bank fraud in connection with property owned in Grosse Pointe Park, Mich.

During a Jan. 29 hearing before U.S. District Judge John Corbett O'Meara, she admitted that between 2010 and 2011 she knowingly engaged in a scheme to defraud ING Direct Bank by concealing assets from the bank to qualify for a "short sale."

A short sale is a forgiveness of debt by the bank to a borrower who claims financial hardship.

It is often used as an alternative to foreclosure because it reduces additional fees and costs to both the creditor and borrower.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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