U.S. Attorney Barbara McQuade has sought forfeiture of Michigan Supreme Court Justice Diane Hathaway's posh second home in Windermere, Florida, after accusing Hathaway and her husband, attorney Michael Kingsley, of transferring the house to one of Kingsley's children before claiming a financial hardship to escape $600,000 in mortgage debt on a $1.5 million Grosse Pointe Park home on Lake St. Clair.
McQuade's civil complaint accuses Hathaway and Kingsley of committing bank fraud and money laundering although neither has been charged yet criminally.
Records show Hathaway and Kingsley transferred two residential properties, namely, the Florida house and the house on Windmill Pointe Drive in Grosse Pointe Park, to two Hathaway stepchildren in 2010 before the short sale. Later, they got the Florida house transferred back in their names in March after the short sale. Prosecutors allege Hathaway and Kingsley did not inform mortgage lender ING Direct of the Florida asset when claiming a financial hardship to qualify for the short sale of the house on Lakeview Court in Grosse Pointe Park.
Justice Hathaway has also been a licensed real estate broker since 1987 and has completed a continuing education course on short sales and foreclosures in October 2010.
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