Grand jury investigating Justice Hathaway's property dealings - New York News

Grand jury investigating Justice Hathaway's property dealings

Posted: Updated:

By Charlie LeDuff
Fox 2 News Reporter


GROSSE POINTE PARK, Mich. (WJBK) -- As if the feds weren't already hanging more paper than an interior decorator on suspect government officials out of Wayne County, Fox 2 has confirmed yet another grand jury investigation.

This time it's Michigan Supreme Court Justice Diane Hathaway, who told her bank she was too poor to live in tony Grosse Pointe Park, and the bank agreed.

So what's she doing living in tony Grosse Pointe Park?

This is a tale of four houses.  Let's begin with the one of Lakeview where she lived with her husband, a successful slip and fall lawyer.  They said they couldn't afford the $1.5 million mortgage and had to move out, so the bank allowed them to sell the home for about half of what they owed on it.  That's called a short sale.

"You have to demonstrate a hardship, something that's changed in your life that no longer allows you to meet your obligations on a mortgage loan.  What we see most commonly is a change in employment status, a change in marital status or some sort of health concerns," said real estate lawyer T. Scott Galloway.

But what hardship?  She's got a job, he's got a job, and they own two other houses.  The feds think this whole deal might be garbage.

Before she was approved for the short sale, she gave away one of her homes to her stepdaughter, a swanky pad in Florida with a boat dock worth three quarters of a million dollars.  A house that they owned outright.

She also gave a home to her stepson just a stone's throw away from the short sale house.  She paid $170,000 cash for it in 2010.

Last November, the short sale went through and Hathaway sold her $1.5 million mortgage to a guy for $850,000.

So Hathaway is homeless, right?  Wrong.  Yet another stepdaughter bought a house in Grosse Pointe Park for $200,000 just months before the short sale, and just a few months after the short sale that stepdaughter signed it over to the judge.  Then the other stepdaughter after the short sale went through signed the Florida house back over to the judge.

One more thing.  According to documents obtained by Fox News, the feds are looking at a possible tax fraud because when Hathaway owned the home that she gave to her stepson and the short sale house, tax breaks were claimed on both when you're only entitled to claim it on one.

Justice Hathaway wouldn't answer our questions.

  • Charlie LeDuffCharlie LeDuffMore>>

  • LeDuff: Where is the respect for the real hosts of the Super Bowl?

    LeDuff: Where is the respect for the real hosts of the Super Bowl?

    Super Bowl XLVIII is in New York.  Well, not exactly.  The Super Bowl's host city is actually East Rutherford, N.J.  Sometimes it's hard to get respect in America if you're not from places like NYC or LA.
    Super Bowl XLVIII is in New York.  Well, not exactly.  The Super Bowl's host city is actually East Rutherford, N.J.  Sometimes it's hard to get respect in America if you're not from places like Los Angeles., Washington, D.C. or New York.  If you live in New Jersey, you're in the shadow of the Big Apple.
  • Ground Zero of the North Dakota Oil Boom

    Ground Zero of the North Dakota Oil Boom

    Friday, March 7 2014 12:11 PM EST2014-03-07 17:11:13 GMT
    In another installment of The Americans with Charlie LeDuff, Charlie and his crew head to Williston, North Dakota, where the oil boom is making the small town the epicenter of opportunity and big city problems.
    Tens of thousands of Americans are drifting into places like Williston, North Dakota where the oil boom is making the small town the epicenter of opportunity.

    If you're willing to work 100 hours a week you could make $100,000 in a year.  Along with opportunity there are problems and a changing landscape to small town life that's as harsh as winter on the northern planes.
  • LeDuff: Detroit's bankruptcy is helping police do their jobs

    LeDuff: Detroit's bankruptcy is helping police do their jobs

    Friday, March 7 2014 11:46 AM EST2014-03-07 16:46:27 GMT
    Detroit police are doing better because less money is being paid to creditors and more is being invested in police services. Go on an exclusive ride to see how the fight on crime is getting new support.
    Detroit is a godforsaken place.  Everyone knows that.  Detroit is a mess, no doubt. Here's the thing: some of the factors that put Detroit $18 billion in debt could be factors in your town. Cities all over the country are struggling to pay for health care and retiree pensions. They're seeing revenues from property taxes and sales taxes drop as they try to pay for expensive projects that were approved before the recession.
  • Local NewsLocal NewsMore>>

  • Deep split in Port Authority over unfinished WTC tower

    Deep split in Port Authority over unfinished WTC tower

    Wednesday, April 23 2014 9:03 PM EDT2014-04-24 01:03:40 GMT
    Board members of the Port Authority of New York and New Jersey revealed a deep split Wednesday over the agency's role in effecting the completion of the long-delayed 3 World Trade Center project, with some commissioners lauding the effort and others expressing grave concerns. The discussion at the monthly board meeting offered a rare glimpse into the negotiations that have been going on behind the scenes in recent months.
    Board members of the Port Authority of New York and New Jersey revealed a deep split Wednesday over the agency's role in effecting the completion of the long-delayed 3 World Trade Center project, with some commissioners lauding the effort and others expressing grave concerns. The discussion at the monthly board meeting offered a rare glimpse into the negotiations that have been going on behind the scenes in recent months.
  • God's Love We Deliver virtual bake sale for birthday cakes

    God's Love We Deliver virtual bake sale for birthday cakes

    Wednesday, April 23 2014 6:36 PM EDT2014-04-23 22:36:46 GMT
    God's Love We Deliver provides meals to people in the New York City area who are too sick to shop and cook for themselves. Clients also receive birthday cards that are decorated by local school students. Sometimes a cake is the only birthday gift that God's Love's clients will receive.
    God's Love We Deliver provides meals to people in the New York City area who are too sick to shop and cook for themselves. Clients also receive birthday cards that are decorated by local school students. Sometimes a cake is the only birthday gift that God's Love's clients will receive.
  • Success Academy students waiting for word on new locations

    Success Academy students waiting for word on new locations

    Wednesday, April 23 2014 5:58 PM EDT2014-04-23 21:58:48 GMT
    The mayor's office is saying one thing. The charter schools another. It is a lot of he said, she said. The bottom line is that right now the future of three charter schools is still unclear. Jennifer Duran is afraid because she doesn't know where her two children are going to school next year. Both kids attend success academy Harlem 4, one of three charter schools that still does not have a set location. The other two charters are Success Academy Jamaica in Queens and Success Academy City Hall.
    The mayor's office is saying one thing. The charter schools another. It is a lot of he said, she said. The bottom line is that right now the future of three charter schools is still unclear. Jennifer Duran is afraid because she doesn't know where her two children are going to school next year. Both kids attend success academy Harlem 4, one of three charter schools that still does not have a set location. The other two charters are Success Academy Jamaica in Queens and Success Academy City Hall.
  • Charlie LeDuff: Off The ChainCharlie LeDuff: Off The ChainMore>>

  • Sayonara Bingaling

    Sayonara Bingaling

    Friday, December 13 2013 7:35 PM EST2013-12-14 00:35:18 GMT
    LeDuff: From my perch, I can say Bing was a mayor who preferred to get his nails polished but never dirty.
    LeDuff: From my perch, I can say Bing was a mayor who preferred to get his nails polished but never dirty.
  • LeDuff goes inside massive Detroit Police raid

    LeDuff goes inside massive Detroit Police raid

    Tuesday, December 3 2013 7:57 PM EST2013-12-04 00:57:27 GMT
    On Tuesday, police in Detroit teamed up with Michigan State Police and federal law enforcement officers to conduct a massive raid the size of a city block.
    On Tuesday, police in Detroit teamed up with Michigan State Police and federal law enforcement officers to conduct a massive raid the size of a city block.
  • Is this the crest of dawn in this thing we call a city?

    Is this the crest of dawn in this thing we call a city?

    Friday, November 8 2013 6:12 PM EST2013-11-08 23:12:53 GMT
    LeDuff: Darkness Rules. And then on a corner of a street called Crusade, a case of what should be considered normal becomes the extraordinary:a streetlight gets repaired. And the curtains get pulled back from the iron door.
    LeDuff: Darkness Rules. And then on a corner of a street called Crusade, a case of what should be considered normal becomes the extraordinary: a streetlight gets repaired. And the curtains get pulled back from the iron door.
Powered by WorldNow
Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices