LeDuff uncovers newly elected judge's property problems

LeDuff uncovers newly elected judge's property problems

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  • Grand jury investigating Justice Hathaway's property dealings

    Grand jury investigating Justice Hathaway's property dealings

    Wednesday, October 31 2012 8:21 PM EDT2012-11-01 00:21:19 GMT
    Diane Hathaway is the target of a federal grand jury.  The Michigan Supreme Court justice is house rich, but did her property dealings put her on the wrong side of the law?
    She's a real estate agent, who's also one of the state's top judges, and now she's the target of a federal grand jury.  Michigan Supreme Court Justice Diane Hathaway is house rich, but did her property dealings put her on the wrong side of the law?

By Charlie LeDuff
Fox 2 News Investigative Reporter


BIRMINGHAM, Mich. (WJBK) -- Remember we told you about Michigan Supreme Court Justice Diane Hathaway and her property shell game?  It involved four houses, her stepchildren, a mortgage on a Grosse Pointe house she didn't want to pay anymore and now a federal grand jury.

She's not the only Judge Hathaway who's got problems keeping her houses straight because now we've come to find that her daughter, Dana Hathaway, who was just elected to the Third Circuit Court, has her own issues with shuffling property and shorting the tax man.

Dana Hathaway move to Grosse Pointe Farms last year, which is in Wayne County and made her eligible to be a Wayne County Circuit Court judge.  But she's been claiming a house as her primary residence on Catalpa Drive in Birmingham for the last three years.  That makes the property taxes cheaper, but it's illegal because you have to live in the house that you claim as your primary residence, and as we just said, she lives in Grosse Pointe Farms.

As it turns out, back in 2010 when they bought that great, big, new house on Catalpa and moved into it and claimed it as their primary residence, they were also claiming another house as their primary residence, a second, smaller house that they were renting out.  You can't do that, but they did, and then they moved to Wayne County where almost any lawyer with the last name Hathaway can become a circuit court judge. Confused?  Me, too.  So I went to talk to Andy Arena, the former head of the Detroit FBI.

"Never worked for the IRS, but there's issues here, but honestly you're going to have issues with the state claiming the homestead exemption, so it could be a federal issue, but it's definitely going to be an issue with the State of Michigan," he said.  "There's certain cannons of ethics that the lawyers and judges and quite frankly when I was with the FBI, I mean, you're held to a little higher standard."

When my brother Frankie fell on hard times a few years ago, the bank took his house and he paid his property taxes.

"It's ridiculous is what it is.  I don't understand how the little man has to play by the rules, but a judge or somebody that is affluent does not," said Frankie Parker.

Judge Hathaway and her husband didn't want to talk to us on camera, but let me tell you a funny little story.  Last week when I went to Birmingham city hall to check the property tax records, they judge and her husband beat me there by four minutes.  And guess what they did?  They filed an affidavit that says, okay, you caught us.  The big house on Catalpa was never our primary residence even though we got a tax break for three years.  So now they owe tens of thousands of dollars to the Birmingham tax man and they owe the public an explanation because that's what judges do.

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