GROSSE POINTE PARK (WXYZ) - State Supreme Court Justice Diane Hathaway is under investigation by the FBI, according to law enforcement sources.
The probe comes as a result of a 7 Action News investigation into a dizzying property shuffle Hathaway made prior to her bank granting a short sale.
Hathaway's lawyer Steve Fishman said today by phone that he was unaware of any federal investigation.
Justice Hathaway had previously refused multiple requests for comment about the property transfers, and ultimately sped away in her car when approached by 7 Action News Investigator Ross Jones last May.
She may have a harder time dodging the feds' questions.
A short sale allows a homeowner to sell his or her property at a loss rather than go into a foreclosure. It can save the owner hundreds of thousands of dollars in mortgage payments, but he or she needs to prove a hardship to their bank, like a loss in income.
But prior to Hathaway’s short sale, she shuffled two homes out of her name: a Florida home valued at almost three-quarters of a million dollars went to her stepdaughter, and one in Grosse Pointe Park went to her stepson.
After the bank agreed to the short sale on Hathaway’s Lake St. Clair home, that Florida house went back into Hathaway’s name.
The home where the Justice currently lives was recently put into her name, but its first owner was Hathaway’s stepdaughter. According to records, she bought it for $195,000 cash around the same time Hathaway’s bank was mulling over the short sale that they ultimately approved. Hathaway won’t say whose cash was used to buy that home.
"It raises questions," said Howard Young, a Bingham Farms attorney who reviewed the timing of the property transfers without knowing they were Hathaway's.
"It just sounds like, listen I’m going to park these assets in your name for a while, there’ll be deeds recorded, you’ll own them for all intents and purposes but our deal is, because you’re my child…when the trouble passes, you’re going to transfer the property back to me," he said.
It’s not clear when the FBI's investigation began, but 7 Action News has learned that grand jury subpoenas have already been issued. Even though the feds are investigating, it does not mean that charges are imminent.
A call to Hathaway for comment was not returned.
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