The action was sought because Steven Leach can't pay restitution he owes.
The federal government will seize an Arizona home owned by Steven Leach, the former business partner and co-defendant of jailed auto dealer Denny Hecker, according to forfeiture documents filed Tuesday in U.S. District Court.
Leach, 57, was imprisoned in March 2011 and is serving a 27-month sentence for his part in helping Hecker defraud Chrysler Financial out of millions of dollars in ill-gotten auto loans.
He was ordered to pay $14.2 million in restitution. But according to a motion filed Tuesday by U.S. Attorney B. Todd Jones, Leach doesn't have the money. As a result, the government is going after a house he owns in Scottsdale, Ariz.
Property tax records from Maricopa County in Arizona show the house was assessed at $460,000 in 2009.
In his court filing, Jones said, "The proceeds of the fraud to which the defendant pled guilty cannot be located, have been transferred or sold, or have been placed beyond the jurisdiction of this court." He added that as a result, "an order forfeiting the Arizona property as substitute property is therefore warranted."
Because of the seizure of the Arizona home, the government will not go after the Burnsville house Leach has shared with his wife, Debra, and family, said Thomas B. Heffelfinger, attorney for Debra Leach.
Heffelfinger said that the Leaches owned the Arizona house for "many, many years" and that the house was not purchased with any fraudulent funds.
Leach, former president of Hecker's Rosedale Leasing operation, pleaded guilty in 2010 to ordering an office clerk to cut and paste false information into auto loan documents, which he then faxed to Hecker so Hecker could secure favorable loan terms from Chrysler Financial.
Leach insisted that he never benefited from the fraud and that the proceeds of the crime went to prop up Hecker's auto loan and leasing businesses.
"In Steve's case, he never got anything. He just got zero. But he did get stuck with a big restitution," Heffelfinger said.
In the last two months, Leach was transferred from a Yankton Federal Prison camp in South Dakota to a halfway house in the Twin Cities. He is scheduled to soon be released to his home in Burnsville, Heffelfinger said.
Once released, Leach faces three years of probation.
Hecker is currently serving his 10-year prison sentence for fraud in a federal prison camp in Pennsylvania.
Dee DePass • 612-673-7725