Former Minn. auto magnate Denny Hecker, former exec plead not guilty to federal fraud charges

Minn. auto mogul Hecker pleads not guilty to fraud

MINNEAPOLIS — Minnesota auto mogul Denny Hecker pleaded not guilty Thursday to charges he operated a scheme to defraud lenders of millions, and his attorney blamed the allegations on a business dispute with a major lender.

Hecker, 57, of Medina, was released under certain conditions. Among them, he’ll be under electronic monitoring and have a curfew. He also had to turn over his passport and continue mental health therapy.

“For many months I’ve had to sit and listen, and read comments and allegations and rumors that are just untrue,” Hecker said as he left U.S. District Court in Minneapolis. “Today’s indictment is the start of the full story, which will be told in the courtroom.”

Wednesday’s indictment charges Hecker and a former executive, Steven Joseph Leach, each with one count of conspiracy to commit wire fraud and five counts of wire fraud. Hecker is also charged with money laundering.

Leach, 54, of Burnsville, also pleaded not guilty Thursday and was released under similar conditions.

The indictment alleges the scheme was created in part to fund Hecker’s extravagant lifestyle.

Hecker was one of Minnesota’s largest auto dealers. As recently as 2008, he owned 26 dealerships as well as several other businesses.

The indictment alleges that in order to fund the businesses and buy vehicles, Hecker borrowed money from commercial lenders and used purchased vehicles as the primary collateral.

The indictment says in the fall of 2007, Hecker and Leach gave fraudulent documents to Chrysler Financial Services Americas to obtain $80 million in financing to purchase vehicles from Hyundai Motor America. Chrysler Financial issued the loan — and lost more than $10 million.

Hecker’s attorney, Bill Mauzy, said Hecker and Chrysler Financial had a successful business relationship for 25 years. But in 2008, Mauzy said, Chrysler Financial was having problems and tried to get out of its loans with Hecker.

He said Chrysler Financial came up with a “business dispute” related to collateral on a loan.

“Chrysler Financial looked at some documents, started claiming fraud, used this as a basis to get out of their contractual obligations and to demand an immediate repayment of all of the loans that the Hecker entities had,” he said.

He said other lenders then began calling in their loans.

“That led to Denny Hecker’s collapse,” Mauzy said.

Hecker filed for bankruptcy last June, claiming $787 million in debt and $18.5 million in assets.

Attorneys for Chrysler Financial did not immediately return phone calls or e-mails left after business hours Thursday.

When asked if documents were altered, Mauzy said the case would be tried in the courtroom.

“Denny’s a fighter. He’s going to fight these charges,” Mauzy said, adding he was confident that a jury would find Hecker not guilty.