Hecker Gets Max. Sentence of 10 Years
Fallen auto mogul Denny Hecker will spend 10 years behind bars-the maximum sentence under federal guidelines-for two fraud charges connected to his attempts to defraud Chrysler Financial Services, LLC, and other lenders of millions of dollars. Hecker was also ordered to pay $31.4 million in restitution.
Hecker pleaded guilty to the two charges in July-and prosecutors dropped 24 additional charges Hecker faced at the time.
“I know you've been through a lot,” U.S. District Judge Joan Erickson told Hecker Friday morning before a packed-full downtown Minneapolis courtroom. “To a great extent, this is by your own hand.” A sentence of less than 10 years would be insufficient for the crimes committed and send a message that “behaving like a scoundrel” is allowable, she said.
Before determining Hecker's sentence, two witnesses were called to the stand to help determine the validity of Hecker's recent claims that he has taken responsibility for his actions-and thus deserved leniency in his sentence. Those two witnesses-licensed private detective William Joseph O'Keefe and IRS special agent Brian Matthew Pitzen-gave opposing testimony about the income Hecker claimed when he tried to lease a vehicle from a Kia dealership in St. Cloud.
When given the opportunity to address the courtroom, Hecker apologized to the “judge, taxpayers, and government” for the money and time spent on his criminal case. He choked back tears as he talked about the effect the case had on his children.
Randall Seaver, the trustee overseeing Hecker's bankruptcy case, opted to take the stand when Erickson asked whether anyone wanted to speak on behalf of Hecker's victims. Seaver said that in addition to the losses incurred by victims, money was unnecessarily spent on Hecker's bankruptcy proceedings because of the fact that he didn't provide truthful information. He called Hecker “the most dishonest debtor I have ever seen.”
Erickson plans to recommend that Hecker serve his prison sentence in or near Minnesota so that he can be close to his children. His request to leave jail for three weeks prior to beginning his prison sentence was denied. He asked Friday if he could get a mere 24 hours, but Erickson denied that request as well.
Hecker's company-Denny Hecker Family Holdings-once claimed more than $7 billion in annual revenue and owned 26 auto dealerships.
The Hecker empire began to crumble during the economic downturn, and his dynasty of auto dealerships, a rental car company, and other ventures collapsed under the weight of more than $700 million in debt.
In July 2009, Hecker filed for Chapter 7 bankruptcy, and court documents indicate that he owed money to hundreds of creditors.
After that, allegations of misconduct began to surface, and in February 2010, Hecker was indicted on federal charges of conspiracy, fraud, and money laundering for running a multimillion-dollar scheme to defraud lenders.
Hecker was accused of falsifying documents to obtain $80 million in financing from Chrysler Financial to purchase Hyundai vehicles. The charges also alleged that Hecker filed for personal bankruptcy in 2009 to avoid paying off his lenders-and accused him of hiding personal assets from the court. Hecker pleaded not guilty to the charges in February 2010.
The federal government later revised its plan of attack in July by dropping some of the charges and adding others-resulting in 26 total counts, including 11 counts related to bankruptcy fraud. Hecker once again pleaded not guilty.
Less than a week later, Hecker pleaded guilty to one count of bankruptcy fraud and one related to conspiracy-and prosecutors in exchange dropped all of the other criminal charges.
Two of Hecker's co-defendants-James Gustafson and Steven Leach-have already been sentenced. Gustafson was sentenced last week to two years probation, 120 hours of community service, and a $1,000 fine. Earlier this week, Leach received a sentence of 27 months in prison and three years of supervised release. He was also ordered to pay $14.2 million in restitution.
Last week, Hecker's attorney filed documents requesting an eight-year prison sentence for Hecker-less than the maximum 10-year sentence that prosecutors requested. Those documents argued that Hecker has complied with the conditions of his plea agreement and accepted responsibility for his charges-and thus deserves a reduced sentence.
However, prosecutors said that Hecker deserves the 10-year maximum sentence for his crimes, adding that the high-profile case is a distinct one and a tough sentence will set an example.
Prosecutors also noted that even after Hecker pleaded guilty, the government filed wave after wave of documents accusing the former auto king of shifty moves in his bankruptcy case, including allegations that he and his girlfriend, Christi Rowan, collaborated to hide assets from the court.
In late October, a federal judge determined that Hecker had repeatedly violated court orders-and Hecker was sent to jail, where he has since remained while waiting to learn how many years he will spend in prison.