September 8, 10

NEWS / Denny Hecker Pleads Guilty to Bankruptcy Fraud, Conspiracy to Commit Wire Fraud

Earlier today in federal court in Minneapolis, Dennis Earl Hecker, age 58, of Medina, pleaded guilty to crimes in connection with orchestrating a scheme to defraud financial lenders and others out of millions of dollars. Appearing before United States District Court Judge Joan N. Ericksen, Hecker pleaded guilty to one count of conspiracy to commit wire fraud and one count of bankruptcy fraud.

For many years, Hecker owned and operated numerous Minnesota auto dealerships and businesses that provided fleet vehicles to car rental companies. Those businesses operated under different corporate names but, collectively, were known as the “Hecker organization.”

In the plea agreement, Hecker admitted that from November of 2006 through June of 2009, he conspired with others to defraud Chrysler Financial Services and other commercial lenders from which he and the Hecker organization borrowed money for business operations. Specifically, in the fall of 2007, he conspired with Steve Leach and others to present fraudulent documents to Chrysler Financial in an effort to obtain $80 million in financing for the purchase of 5,000 vehicles from Hyundai Motor America. Among the documents submitted to Chrysler Financial was a letter from Hyundai Motor America that had been altered to benefit Hecker and the Hecker organization. The altered letter was transmitted via interstate wire transfer to Hecker himself, who then provided it to Chrysler Financial, knowing it was fraudulent.

Documents provided to Chrysler Financial also failed to specify the true nature and value of the collateral acquired by Hecker and the Hecker organization to secure the financing requested. Specifically, Hecker omitted details of the incentive payments he and the Hecker organization received from Hyundai Motor America, even though those payments totaled more than approximately $17.2 million and were material to the lender, Chrysler Financial. As a result of those false statements and misrepresentations, Chrysler Financial loaned Hecker and the Hecker organization more than $80 million and ultimately lost more than $10 million.

According to the plea agreement, Hecker also admittedly misled Chrysler Financial into financing Suzuki vehicles. Again, Hecker failed to inform the lender that the Hecker organization had received significant incentives from American Suzuki Motor Corporation. This particular fraud was accomplished by removing a material portion of each year’s Suzuki purchase contract before providing the contract to Chrysler Financial.

When Chrysler Financial learned about the missing addendum to the contract, it insisted on receiving the incentive money. Hecker agreed to turn it over but, instead, continued the fraud scheme by providing the altered Suzuki contract to other lenders, including U.S. Bank, in an effort to obtain financing from them. As a result of those actions, the other lenders suffered a collective financial loss of more than $10 million.

The purpose of the overall fraud scheme, at least in part, was to fund Hecker’s extravagant lifestyle. In an effort to maintain the fraud, Hecker carried out a cover-up and engaged in communications meant to lull creditors. In a further effort to avoid paying his debts, Hecker filed personal bankruptcy in June of 2009, seeking to discharge, among other amounts owed, the $10 million debt to Chrysler Financial.

After filing bankruptcy, however, Hecker admitted that he concealed assets from the bankruptcy trustee. For example, he transferred $33,057 into someone else’s bank account, over which he exercised control. In addition, he transferred approximately $80,000 to that same individual and arranged for that individual to deposit the money in his bank account, with instructions to return it to Hecker later.

For his crimes, Hecker faces a potential maximum penalty of 10 years in prison—five years on each of the two charges. Judge Ericksen will determine his sentence at a future hearing, yet to be scheduled.

Steve Leach is scheduled to go to trial in this matter on October 18, 2010.

This case is the result of an investigation by the Minnesota State Patrol, the Internal Revenue Service-Criminal Investigation Division, and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorneys Nicole A. Engisch, Nancy E. Brasel, and David M. Genrich.

http://minneapolis.fbi.gov/dojpressrel/pressrel10/mp090710.htm

Tags: form t, criminal investigation, document, corporation,