DETROIT (AP) — Federal prosecutors have filed a fraudcharge against Michigan Supreme Court Justice
Diane Hathaway, just a fewdays before she leaves the state’s highest court in a scandal involvingthe sale of
a Detroit-area home and suspicious steps taken to concealproperty in Florida.The charge was filed Friday as
a criminal"information," which means it was negotiated and that a guilty plea isexpected in
federal court. Defense attorney Steve Fishman declined tocomment Saturday.Hathaway is resigning Monday,
months after aseries of questionable real estate transactions first were revealed by aDetroit TV station.
Hathaway and her husband, Michael Kingsley, deeded aFlorida home to Kingsley’s daughter while trying to
negotiate a shortsale on a house they couldn’t afford in Grosse Pointe Park.In ashort sale, a bank agrees to
a sale that wipes out any remainingmortgage, a significant benefit for any borrower. The 2011 deal
wentthrough and erased the couple’s $600,000 debt in Michigan. Five monthslater, in 2012, the debt-free
Windermere, Fla., home worth more than$600,000 went back in their names for $10.The bank fraud chargesays
Hathaway made false statements to ING Direct, transferred propertyto others and failed to disclose available
cash — all in an effort tofool the bank into believing she had a severe financial hardship.Kingsley, also a
lawyer, has not been charged.Hathaway hasrefused to make any lengthy public comments. She told WXYZ-TV
lastspring that the property shuffles were a private matter.Themaximum penalty for bank fraud is 30 years in
prison, although thatwould be a rare punishment for anyone and very unlikely for Hathaway.Nonetheless, some
time in custody should be expected, predicts formerfederal prosecutor Lloyd Meyer of Chicago."Any bank
robber whorobs a bank with no gun and just a note goes away to prison. A judge whosteals over half a million
dollars should enjoy the same fate," saidMeyer, referring to the amount of debt written off after the
short sale."As a former federal prosecutor, it would be unthinkable to have thistype of defendant get a
slap on the wrist."U.S. Attorney BarbaraMcQuade declined to comment on Hathaway’s possible punishment
or otheraspects of the case. The case is assigned to U.S. District Judge JohnCorbett O’Meara in Ann
Arbor.Hathaway, 58, filed retirementpapers with the state Dec. 20, but it was not publicly disclosed
untilJan. 7 when a state judicial watchdog filed an ethics complaint againsther for the real estate
transactions, calling them "blatant and brazen"violations of professional conduct as a judge. Her
last day as a justiceis Monday, although Hathaway has not participated in court business fortwo weeks and
has vacated her offices.It was no secret Hathawaywas under scrutiny by prosecutors. The government filed a
lawsuit inNovember to seize the Florida home as the fruit of bank fraud. The civilcase is pending and likely
will be consolidated with the criminal case.Hathawaywas halfway through an eight-year term on the court, the
result of amajor election upset over then-Chief Justice Cliff Taylor in 2008. Hervictory put Democrats in
control of the court for a two-year period. Shewas a Wayne County judge before joining the Supreme
Court.ChiefJustice Robert Young Jr., a Republican, released a statement, in whichhe said the scandal
diminishes the public’s trust in government. He saidHathaway’s departure and the criminal charge "bring
to a close anunhappy, uncharacteristic chapter in the life of this court."Republican Gov. Rick Snyder
will choose Hathaway’s successor and likely stretch the GOP’s majority to 5-2.___Follow Ed White at
twitter.com/edwhiteapCopyright 2013 The Associated Press.