Ex-Mich. justice pleads to bank fraud

ANN ARBOR, Mich. (AP) - A former Michigan Supreme Court justice has pleaded guilty to bank fraud in a scandal that ended her career on the state's highest court.

Democrat Diane Hathaway pleaded guilty Tuesday in Ann Arbor federal court and faces 1 1/2 years in prison under a deal with prosecutors. She resigned last week.

Prosecutors say Hathaway and her husband transferred a debt-free Florida home to a relative so that they'd qualify to short sell a Grosse Point Park home that carried a big mortgage. After they unloaded the Michigan property in a 2011 short sale, the Florida property was transferred back to them.

The government is also dropping efforts to seize that Florida home Hathaway. The disclosure was made as part of Hathaway's guilty plea to bank fraud. Prosecutors filed a lawsuit in November to seize the home.

U.S. Attorney Barbara McQuade says the bank's loss is estimated at $90,000. She says there's no need to seize and sell the house if Hathaway comes up with that amount.

Hathaway's husband wasn't charged.

In short sales, banks let distressed owners sell property for less than what's owed on it.