Inside the FBI probe of former Supreme Court Justice Diane Hathaway
1:01 AM, Jun 21, 2013
4:33 PM, Jun 21, 2013
(WXYZ) - In a rare interview, the FBI Detroit Special Agent in Charge Robert Foley is talking about his office's probe into former Supreme Court Justice Diane Hathaway's bank fraud, an investigation, he says, that was sparked by our 7 Action News report.
Foley said his agents started investigating Hathaway within days of our 7 Action News report. She was never interviewed by agents, but they spent months gathering bank and mortgage records though subpoenas. Foley said Hathaway's scheme was easy to spot.
"It was pretty clear at the very early stages of the information that we had a viable investigation," he said. "When you're dealing with criminal activity and criminals themselves, there's a certain degree of hubris that comes with the thought that perhaps they're not going to be the ones to get caught. The manner in which she conducted her criminal activity is somewhat typical when someone's committing a bank fraud. I don't think you could call categorize it as very sophisticated. It was above average."
Her scheme involved hiding a slew of homes in her three stepchildren's names. Foley said his office considered charging them, but said there wasn't enough proof that they were in on the scheme.
But what about her husband? He's also a career lawyer, signed the same documents as Hathaway, and seemed to be just as involved.
Foley said, "It did seem like that, however, providing a standard of proof to a jury is an entirely different matter. And we never got to the level of beyond a reasonable doubt that in fact was the case."
As structured as Hathaway's scheme was, Foley said the real irony is that it was totally unnecessary. The justice's bank told the feds that, despite her assets, they would have still approved Hathaway's short sale, only requiring her to bring $90,000 to the table.
"My hope is after serving her time in prison, and during that time period, she has time to reflect on what she did, and come to regret that decision…as I'm sure she's starting to do," said Foley.
Last month, a judge recommended that Hathaway spend her year-long sentence at a minimum-security facility known as "Camp Cupcake."