Criminal charges against disgraced auto mogul Denny Hecker and one of his former lieutenants are "imminent," according to a court filing Friday.
The revelation comes from a court filing made in Hecker's bankruptcy case on behalf of Steve Leach, who was president of Hecker's Roseville leasing operation until he resigned two years ago. His lawyer writes in the filing that the U.S. attorney's office has said that it will "likely soon indict" Hecker and Leach.
Hecker, who was reached by phone Friday night, said he was not aware of Leach's court filing. He declined to comment further.
Hecker's criminal defense attorney, Marsh Halberg, said it is premature to assume anything about an indictment.
"'Imminent' is a subjective term," Halberg said. "Is that tomorrow or six months from now or at all?"
According to the filing, Hecker and Leach are targets of a grand jury convened to investigate fraud allegations made by Chrysler Financial Services that Hecker forged a document to obtain financing for Rosedale Dodge's purchase of Hyundai vehicles.
In a lawsuit filed in July, Chrysler said, "Hecker personally presented to Chrysler Financial a forged, doctored document and made other misrepresentations to Chrysler Financial in order to obtain $65 million in loan advances."
Chrysler claimed that Hecker requested the money in November 2007, so that his Rosedale Dodge operation could purchase 4,855 vehicles from Hyundai Motor America. Chrysler alleged that Hecker submitted two offer letters supposedly from Hyundai, but that they were "forged" and "countersigned" by Hecker. Hyundai's original letter proposed a sale of 605 vehicles, not 4,855. Hecker has denied the allegation.
Still, in a recent deposition, Hecker's former executive assistant Cindy Bowser revealed that the grand jury was looking into "what role, if any, Leach may have played in the alleged fraud," Friday's court records said.
Leach resigned as president of Hecker's Rosedale leasing operation one month after the loan request.
Chrysler Financial Services revoked Hecker's line of credit last fall and won a civil judgment against him in April for $476.9 million, effectively flattening Hecker's empire that at one time included 26 auto dealerships, car rental operations stretched across the country and about $6.8 billion in annual sales. Hecker didn't contest the award, saying only at the time that it was "disappointing." He filed for bankruptcy June 4, claiming that he owed $767 million but had just $18.5 million in assets.
Hoping to focus on other area
Friday's filing in U.S. Bankruptcy Court in Minneapolis essentially asks for a delay in civil proceedings so that Leach can focus on the impending criminal charges. He's been subpoenaed to appear Dec. 11 in a civil case against Hecker, and will likely be sued in Dakota County Court by Chrysler Financial Services for at least $13 million, wrote Leach's attorney, Robert J. Hennessey of Lindquist & Vennum. Hennessey could not be reached for comment Friday night.
Leach's attorneys argue that Hecker is trying to use the civil case to "circumvent the criminal rules and gain an unfair advantage against his likely
Hecker's attorneys have agreed to delay Leach's deposition pending his motion to quash the subpoena. A hearing on that motion is scheduled for Dec. 16 before U.S. Bankruptcy Judge Robert Kressel in Minneapolis.
Hecker made essentially the same argument this fall to Kressel, asking the judge to delay eight civil lawsuits because Hecker feared that he would soon face criminal charges. Hecker's attorney for that filing, Bill Skolnick, argued that Hecker could compromise his constitutional right against self-incrimination if forced to testify in civil court. The judge denied that request Oct. 22.
Halberg, Hecker's criminal defense attorney, said about the possibility of criminal charges: "We are certainly hopeful that Mr. Hecker is not indicted, but were that to happen, we will be in a position to respond accordingly."