Judge hands down 10-year term to fallen auto mogul, saying "you do not get a break." Hecker also was ordered to pay $31.36 million in restitution.
Denny Hecker's three-year saga of greed, financial ruin and fraud ended when a federal judge sentenced him Friday to the maximum 10-year prison term for scamming auto lenders and the U.S. Bankruptcy Court out of millions of dollars. He also must pay $31.36 million in restitution to victims.
Hecker, once the boisterous and ubiquitous spokesman for his auto empire, appeared strikingly thin as he apologized for his crimes in a high, weak voice before a packed Minneapolis courtroom.
"I didn't intentionally lie to anyone," said Hecker, who wore a light gray suit, white shirt and light blue tie. Voice shaking, he stabilized himself on the podium: "Everywhere I turned I was made out to be a giant villain. I have a heart. My ego is long gone. ... I apologize and I'm sorry."
Hecker pleaded guilty in September to two counts of fraud and conspiracy for repeatedly hiding assets from the bankruptcy court and for altering loan documents in 2007 and 2008. The schemes ultimately defrauded Chrysler Financial and other lenders out of more than $80 million in loans and $13 million in losses. Hecker, 58, still owes Chrysler Financial about $250 million in defaulted loans.
"The actions you've taken are not consistent with someone who can be trusted, and you have not been as truthful as you could have been in the court system," U.S. District Judge Joan Ericksen told Hecker as she imposed her sentence. "Therefore, you do not get a break. You're going to get the full 10 years, which is appropriate and necessary. Behaving like a scoundrel is not tolerated in the court system."
Defense attorney William Mauzy, who had asked that his client serve only eight years in prison, attempted to portray Hecker as a vilified business man who took a wrong turn, but who also accepted responsibility for his actions. "You haven't received a very flattering portrayal of Mr. Hecker," he told the judge. "If this were a NASCAR race you would have only seen the crashes, not the rest of the race.
"People say he's just another Tom Petters," Mauzy said, referring to the former Wayzata businessman who was sentenced last year to 50 years in prison for running a decade-long, multibillion-dollar Ponzi scheme. "Mr. Hecker is no Tom Petters. Mr. Petters' business was built on fraud from the start. Mr. Hecker built a business and became a success."
But Randy Seaver, the trustee handling Hecker's bankruptcy cases, offered a far more unflattering description of the defendant, calling him "the most dishonest debtor I've ever seen." He hoped Hecker's sentence would act as a deterrent to others who looked to scam the bankruptcy system.
Lead prosecutor Nicole Engisch told Judge Ericksen that Hecker eventually "realized he needed to be more forthcoming, but it was a little too late." Engisch described Hecker as a man who chose time and again to "ignore the rule of law where it benefitted him and, when caught, to lie and manipulate the truth in desperate efforts to cover up his crimes."
Tears and handshakes
The 10-year sentence prompted tears from Hecker's girlfriend, older sister and other relatives who were on hand to lend support. But it also prompted congratulatory handshakes and back slaps from officials of Chrysler Financial, the bankruptcy trustee, victimized business associates and the 14-member "team" of U.S. prosecutors, IRS and FBI agents, and Minnesota State Patrol officers who worked hard to put Hecker away.
Some victims came from out of town to watch Hecker have his day in court.
Mauzy asked that Hecker serve his time at the federal prison in Duluth and requested Hecker be allowed to participate in a drug and alcohol rehabilitation program for prisoners, a move that would reduce his sentence by nearly a year.
At first, the rehab request was met with skepticism. Hecker had told probation officers that he had never been drunk in his life. "Was that a lie?" asked a frustrated Judge Ericksen.
"My father was a bad alcoholic," Hecker said, adding that he followed that same path, often drinking a quarter bottle of vodka a day. "The prescription drugs go back to November 2008."
Mauzy noted that even the government had come to recognize that Hecker had a prescription drug problem. When the prosecutor agreed, Ericksen agreed to recommend treatment.
The judge also agreed to recommend he be imprisoned "in or near'' Minnesota. But which prison will eventually be decided by the U.S. Bureau of Prisons. With good behavior, time already served and credit for a prisoner drug rehabilitation program, Hecker might spend only seven years in prison, his attorney said.
No temporary release
But Hecker's request for a brief release from custody was flatly rejected. Hecker had asked the judge if he could be released from jail to spend three weeks with his family before reporting to prison.
"I've paid a price. I'm not a flight risk. I have my family," he said. Ericksen said no.
If not three weeks, then 24 hours, the former auto dealer pleaded, choking back tears.
Again, Ericksen refused.
"I can't imagine what could happen to you if you were out. I'm not willing to take that risk," the judge said. "The actions you took are not consistent with someone who can be trusted.''
Hecker raided his children's trust fund and insurance policies, converted cash into gift cards to hide them from the bankruptcy trustee, funneled money to his girlfriend and failed to disclose pricey country club memberships, Engisch outlined in papers filed with the court. Hecker also failed to repay the court for his public defense costs despite secretly and illegally cashing out more than $154,000 in insurance policies and going on a wild spending spree last summer.
At the end of Friday's hearing, two U.S. marshals handcuffed the gaunt former auto giant and slowly led him from the courtroom. Hecker looked haunted as he starred hard toward the back of the court room, at the faces of girlfriend, Christi Rowan, and adult daughters Kelly and Holly. He is likely to remain in the Sherburne County jail, where he has been since October, for about six more weeks before being transferred to a federal prison.
Hecker's prison sentence brings to a close career that started with a self-made Minneapolis high school graduate building an auto empire that included 26 dealerships, several fleet leasing operations, the national Advantage Rent-A-Car chain and about $6.8 billion in annual revenues.
The tale ended with bankruptcy, lawsuits, divorce and three federal indictments that targeted Hecker's highly overleveraged business, forgeries, fraud, ill gotten loans, and lavish spending that rivaled that of any movie star. While he will spend up to 10 years in prison, he will be in debt for the rest of his life. Once released from prison, he must pay $500 a month into a victims restitutions fund.
Still, it is unlikely that any of Hecker's 200 plus creditors will be made whole.
Megan Nicolai, a University of Minnesota journalism student on assignment for the Star Tribune, contributed to this report. Dee DePass • 612-673-7725• email@example.com David Phelps • 612-673-7269 • firstname.lastname@example.org