Authorities raid Hecker offices, homes

Law enforcement agencies raided Denny Hecker's homes and businesses Wednesday as customer complaints mount against the embattled car dealer.

The state is investigating allegations that he failed to pay state taxes, pay license fees or issue car titles after shoppers bought new vehicles. There are also complaints that his dealerships in Inver Grove Heights and Stillwater failed to pay off the loans on customer trade-ins, leaving some buyers with two car payments.

Andy Skoogman, spokesman for the Minnesota State Patrol, which is leading the investigation, said the state received 200 complaints Wednesday from Hecker customers after the state issued a consumer hotline number (800-593-5000) early in the day. Hecker car customers in 15 counties are still waiting for titles, license plates, or for the liens on their traded-in vehicles to be satisfied, state officials said.

State and federal agents raided six Hecker locations Wednesday: his corporate headquarters in St. Louis Park, dealerships in Inver Grove Heights and Stillwater, and three homes -- two in Medina and one in Crosslake, Minn.

Bill Mohrman, corporate counsel for some of Hecker's dealerships, said, "We were absolutely floored" by the raids.

Mohrman blamed the GMAC financing company, and not Hecker dealerships, for apparently failing to pay the 6.5 percent state sales tax and failing to pay off loans on cars that were traded in.

A GMAC spokesman denies the lender's involvement.

Hecker filed for personal bankruptcy on June 4, claiming he owes up to 1,000 creditors up to $1 billion.

The businessman has been adamant that his financial troubles spiraled out of control after Chrysler Financial froze his credit line in the fall, prompting other financiers to freeze bank accounts and demand that loans be repaid.

Frozen accounts

According to Mohrman, in March, GMAC, as the lead secured creditor, took control "of the keys" and received all the proceeds from car sales, including money that was supposed to go to the state.

When complaints from consumers started coming in, Hecker's attorneys contacted GMAC's lawyers and the attorney general's office, saying that GMAC was obligated to make these payments to the state, and Hecker's people assumed they were, according to Mohrman.

GMAC firmly denied any role in not paying the state. The lender repossessed its inventory in March, but assessed all of Hecker's recent car sales and wrote Hecker Automotive a check for "thousands of dollars" so that it could pay the state taxes and license registration fees, GMAC spokeswoman Mike Stoller said. "We have fulfilled all our obligations."

In a statement, GMAC said it is not a party to trade-in transactions, so "the dealer, not GMAC, has the responsibility to satisfy all liens."

'Shook and concerned'

Hecker criminal defense attorney Marsh Halberg said Hecker was in the St. Louis Park offices meeting with civil and bankruptcy lawyers when agents came in and "froze everything." He said Hecker was "shook and concerned," though the atmosphere remained cordial as Hecker and his staff provided agents with computer passwords and even markers as they combed through paperwork and computer files.

Halberg said that Hecker and his civil attorneys are considering suing GMAC as early as this week for failing to pay the state and issue titles and fees. "He disputes" GMAC's account of what took place and said that Hecker Automotive made every effort to work with GMAC to make sure the state and consumers "were made whole," Halberg said.

State Patrol Col. Mark Dunaski said Wednesday complaints first came in about six to seven months ago, adding that it's premature to estimate how much money the alleged fraud involves.

Dick Daniels of Coon Rapids told the Star Tribune that his son and daughter-in-law are still owed a title for the 2006 Cadillac they bought from Hecker's Stillwater Cadillac dealership at the end of April for $15,000. Daniels went with the couple to check on the car and was told the vehicle's title would follow in 10 days.

But Hecker closed the dealership seven days later, leaving GMAC to repossess the inventory and customers like the Daniels waiting for vehicle titles. They are still waiting and angry.

Daniels said his family has requested a duplicate title from the state, but might take the matter to court if not resolved.

Dunaski said there is no reason to believe Hecker's arrest is imminent and that he is free to travel anywhere, even out of the country.

Agents from the Drug Enforcement Agency office in Minneapolis were asked to assist the State Patrol in the search of Hecker's offices because there were not enough troopers available, a DEA spokesman said Wednesday. "There's no DEA drug angle to this," he said.