Any chance Denny Hecker had for leniency likely evaporated on June 10, when he handed a bank teller a check from Prudential Insurance, the first step in a court-defying spree that burned through close to $200,000.
Denny Hecker strolled into 21st Century Bank one day last June to open an account. It would be a particularly costly transaction.
By secretly depositing a $30,000 insurance refund, the former car king raised the suspicion of bankers, incurred the wrath of a bankruptcy trustee and swelled the ire of prosecutors who were eager to throw him in jail.
Hecker, among the most widely known businessmen in the Twin Cities, is scheduled to be sentenced Friday for the fraud charges he pleaded guilty to in September. Any chance he had for leniency likely evaporated on June 10, when he handed the 21st Century teller a check from Prudential Insurance, the first step in a court-defying spree that burned through close to $200,000 in a few months on everything from country club memberships to pool repairs.
By the time he was found out, Hecker had exhausted the bulk of his remaining money, and all of his credibility with the court.
Hecker opened his account that day under the name JDS Family Holdings LLC. He used his attorney's address, not his own. The CEO of 21st Century Bank in Blaine wasn't on hand that day to review the deposit or the man behind it.
But Hecker's legal woes and guilty plea were known to the bank's owners. They knew Hecker had long cried poverty, that he had obtained a public defender after saying he was broke and that he owed $767 million after filing for bankruptcy in 2009. Much didn't seem right about his sudden windfall.
Four days after the account was opened, Sarah Nelson, senior vice president of the bank, wrote Hecker: "Unfortunately due to discrepancies in the information you provided as well as concerns for legal scrutiny of the account in the future, we will be closing the account."
She apologized to him for the inconvenience but made it clear: "We choose not to accept your business."
The $30,000 deposit would be returned, but only after the hold on Hecker's check cleared, Nelson wrote.
A cranky Hecker demanded his money. He'd already dashed off a string of checks -- $1,275 to the Wayzata Country Club on June 10. A $1,215 dirt bike for his son that same day. Two days later, $4,500 to the Lafayette Club. A $5,000 Harley the day after that. Hecker needed his $30,000 now.
Thomas Dolphin, CEO of 21st Century Bank, responded to Hecker's attorney June 17. The message? Back off. "The more you try to get us to release the funds early, the more suspicious of the transaction we become," Dolphin wrote.
To Hecker's relief, the hold on his Prudential check cleared the next day. He showed up at 21st Century Bank in Loretto on June 18, signed some forms and was handed three stacks of cash -- $10,000 each. Unbeknownst to Hecker, the bank filed a suspicious activity report with regulators.
Coincidently on June 18, Prudential honored additional secret loan requests Hecker had made earlier that month, giving him four checks totaling $124,354.
Banished from the traditional banking system, Hecker hurried into Your Exchange, a check-cashing service, and cashed all the checks.
A trove of cash and cards
He pre-loaded $10,733 on a Mastercard "Cash Pass'' card at a Your Exchange store, gave girlfriend Christi Rowan $23,000 in cash cards and Western Union money orders, and paid numerous bills. A strongbox in his Medina home held his new trove of cash and cards.
Drawing on that stash, Hecker feasted at pricey restaurants. He paid Breck School tuition bills for his kids and Rowan's children. Suddenly, the fridge was full again and the lights in his house were turned back on. He shelled out $2,600 spiffing up the lawn and landscaping at his Medina home; $950 on pool repairs, $7,400 on dental work.
The stress of having his power turned off and his personal property sold at auction seemed a memory. Invigorated, Hecker tried but failed to get several of the fraud charges against him dropped. Still, he looked healthier, seemed calmer.
It wouldn't last.
On July 14, a judge dissolved Hecker's interest in a dealership service contract that was supposed to pay him $1 million. Another blow came that afternoon -- prosecutors filed new criminal charges against him.
The man accustomed to running his own show faced 26 conspiracy, bankruptcy and wire fraud charges, as well as new allegations that he hid at least $10,000 in gift cards from the bankruptcy court and altered loan documents in a scheme that defrauded lenders out of millions.
Maintaining his innocence, Hecker set up a war room inside his defense attorney's office.
Meanwhile, Randy Seaver, the bankruptcy trustee in charge of liquidating Hecker's estate, received a tip: Hecker had money. Lots of it. Word was he'd opened a big account at 21st Century Bank. Then another tip: Hecker was spotted cashing checks at Your Exchange. Other calls followed.
"I received lots of calls about Mr. Hecker,'' Seaver said. "The involvement of the general public was good to see."
As a result of his bankruptcy filing, any money that came into Hecker's hands belonged to his creditors. Seaver told his attorney, Matt Burton, to follow the money.
Burton shot an e-mail to Hecker's bankruptcy attorney, Barbara May.
"We have heard from a reliable source that Mr. Hecker recently received a check on an insurance claim," Burton wrote on July 16.
May replied that she would "deal with it immediately." Eighteen minutes later, she had Hecker's version of events. The $30,000 check was for "a life insurance policy that lapsed'' six months prior to Hecker's June 2009 bankruptcy filing.
Still, "I will have the funds in my office this afternoon," she wrote Burton in an e-mail. "I am on top of it and the funds will be surrendered without complication."
But complications flourished. Hecker forked over $30,000 in cash. May deposited the money in Seaver's trust account. But Seaver wanted subpoenas now before more of the estate was squandered.
After receiving a subpoena, Dolphin, the CEO of 21st Century Bank, reluctantly gave Seaver copies of Hecker's Prudential check, account closure forms, and the bank's suspicious activity report.
Soon, Seaver realized just how broke Hecker wasn't.
On Aug. 27, the Your Exchange check cashing service sent Seaver the mother lode -- pages of records detailing the $124,000 in cashed Prudential checks and every location where Hecker used his Cash Pass cards or transferred money to Rowan.
"I was outraged," Seaver said. "He didn't let me know about the additional Prudential checks even after we found out about the initial $30,000."
Nicole Engisch, the lead prosecutor handling Hecker's criminal fraud case, wanted him in jail. On Sept. 2, she phoned Brian Toder, Hecker's court-appointed attorney. She filed a court motion to have Hecker jailed immediately.
Hecker "has committed multiple acts of bankruptcy fraud by secretly liquidating and concealing assets belonging to the bankruptcy estate," Engisch said. "He is in blatant violation of his release.''
Hecker was in Toder's office when Engisch called.
"I certainly informed Denny that ... we needed to talk very, very, very seriously" about changing his plea to guilty, Toder said. "Of course, he wanted to go to trial, and I wanted to go, too. But the realities are there was a risk if you didn't win."
His 58-year-old client faced up to 30 years in jail -- a "death sentence," in Toder's words. He ushered Hecker into the conference room, pulled down a large overhead screen and laid out the legal arguments against him. "It doesn't look good for Denny,'' Toder said later that day. "The federal courts are not hesitant about locking someone up if a court order has been violated."
Over Labor Day weekend, Toder and Hecker worked on his plea agreement, frequently negotiating with prosecutors by phone. By Sept. 7, Toder had "the best possible" agreement -- up to 10 years in prison for admitting two counts of fraud. The deal contained no penalty for the insurance shenanigans.
Five days later, a somber Hecker pleaded guilty. He was released to house arrest until his sentencing early this year.
One more bombshell
The Hecker drama might have ended there. But on Oct. 18, Hecker entered the courtroom of U.S. Chief District Judge Michael Davis for what was supposed to be a routine hearing. Hecker was ordered to take the stand and testify about his spending.
During questioning, prosecutor Engisch dropped a bombshell. She had known about the $154,000 in insurance money, but since pleading guilty, Hecker had liquidated a surprise $40,000 in cash from a 401(k) account, gotten $15,000 in a settlement, and $32,000 from the secret sale of a Toyota truck and a Cadillac.
Under oath, Hecker admitted that he had converted the cash into prepaid American Express cards. He never told the probation office. Only about $18,000 remained on the cards.
Her voice rising, Engisch asked Hecker: "When you were acquiring all this money, did it ever occur to you to repay the court? ... You had an order to reimburse the government!"
A clearly angered Judge Davis turned to Hecker. "I think you need to have a wake-up call that I mean business. ... maybe sitting in a jail cell will help," he said. "Mr. Hecker will be taken into custody now."
U.S. marshals led the stunned Hecker from the room. He was taken to the Sherburne County jail, where he waits today, still hoping that he might see a sentence of less than 10 years.
Dee DePass • 612-673-7725