A federal grand jury Tuesday charged former auto mogul Denny Hecker and his former executive Steven Leach with additional crimes, including a second instance of fraudulently altering a document to obtain loans.
The indictment charged both men with eight additional counts of wire fraud. It also charged Hecker with 10 counts of bankruptcy fraud for concealing boats, cars, jewelry, club memberships, cash and other assets from the court.
In February, the grand jury accused the former auto executives of scheming to defraud Chrysler Financial and other lenders out of millions of dollars. As part of the scheme a Hecker employee allegedly altered a document to get loans to purchase Hyundai vehicles in 2007.
The latest charges allege that at Hecker's direction one of his employees fraudulently altered a contract to get loans for purchasing Suzuki vehicles in 2007 and 2008. One page of a document was intentionally omitted when it was e-mailed to lenders, misstating what the vehicles cost Hecker, the indictment alleged.
Hecker, who once was Minnesota's largest auto dealer, filed for personal bankruptcy June 4, claiming $767 million in debt and $18.5 million in assets. The new criminal charges alleged he concealed assets while continuing "to live an extravagant lifestyle."
A federal bankruptcy judge decided last month not to forgive Hecker's $82 million debt to Chrysler Financial because he lied about not having access to key documents needed in the discovery process. Hecker has denied wrongdoing.
The bankruptcy trustee also has petitioned the court not to forgive the rest of Hecker's debt because he allegedly hid assets from the court with the help of his girlfriend Christi Rowan, former employee James Gustafson, and his former in-law Bill Prohofsky, who died Thursday in an apparent suicide.
Prohofsky had held $81,557 of Hecker's money in his own Wells Fargo Bank account, and had admitted in the bankruptcy case that he paid Hecker's bills with it last year. The new indictment does not mention Prohofsky by name, but identifies an "Individual B" who assisted Hecker in fraudulently transferring and concealing money during his bankruptcy. The dates and dollar amounts of the deposits listed in the indictment match transactions involving Prohofsky that earlier were detailed in a lawsuit filed by the bankruptcy trustee against Prohofsky.
Prohofsky, who was the stepfather of Hecker's fourth wife, was found in a vacant remote parking lot in Medina last Wednesday with what police said was a self-inflicted gunshot wound to his head. He died Thursday.
Hecker's new legal problems come as his criminal defense attorneys, Marsh Halberg and Bill Mauzy, filed motions to withdraw from the case because Hecker can't pay them. On Tuesday, Bill Skolnick, who has represented Hecker in three different court cases, said he filed a motion with family court to withdraw as Hecker's counsel in the unpaid alimony case regarding Hecker's second wife, Sandra Hecker. He also cited money as the reason.
Skolnick also represents Denny Hecker in a divorce case with fourth wife, Tamitha, and in the bankruptcy. Skolnick said he doesn't know if he will continue to represent Hecker in the bankruptcy case.
In an interview last week Hecker said that he has no money to pay attorneys and that he will be requesting a public defender. U.S. Magistrate Judge Susan Nelson will consider the matter at a hearing Monday.
Dee DePass • 612-673-7725
