Carlos Gonzalez, Star Tribune
Feds want Hecker jailed now
- Article by: DAN BROWNING and DAVID PHELPS
- Star Tribune staff writers
- September 3, 2010 - 6:57 AM
Denny Hecker may be heading back to the slammer.
The government filed a motion Thursday to revoke the bond of the former auto magnate. Prosecutors said Hecker has been making new attempts to hide assets -- including cashing and not disclosing more than $150,000 in checks -- while awaiting trial on federal fraud charges.
The new crimes occurred "as recently as July 2010," prosecutors wrote.
"While on release after being charged in this case with bankruptcy fraud and wire fraud, the defendant has committed multiple additional acts of bankruptcy fraud by secretly liquidating and concealing assets belonging to the bankruptcy estate," they said.
Hecker may have committed wire fraud "within the last few weeks," prosecutors said. They also assert that he defied court orders requiring him to report any changes in his income or assets after he pleaded poverty earlier this year and was given an attorney at public expense.
That attorney, Brian Toder, was taken aback by the government's allegations.
"I've got five things to say," Toder said late Thursday. "One, it doesn't look good for Denny. Two, he will remain out of custody until a hearing."
"Three, I learned a few things reading the government's motion, and I won't say anything more [about that]. Four, my experience is that the federal courts are not hesitant about locking someone up if a court order has been violated.
"And five, defending Mr. Hecker will be exponentially more difficult if he is incarcerated. Because of the mounds of data that we have to go through, it's easier to find things if he's there," Toder said.
Still driving a Cadillac
Hecker was jailed for three days this spring for failing to turn over financial information to a Hennepin County judge overseeing two of his alimony cases.
Only a week ago, Bankruptcy Judge Robert Kressel ordered Hecker to produce records that explain how he continued to drive a Cadillac Escalade, dine at the Oceanaire Seafood Room and Manny's Steakhouse, and maintain country club memberships long after declaring himself broke.
The government argued that the "risk factors" presented in an initial pretrial report, together with new information about Hecker's "blatant violations of federal law," demonstrate that he's a serious flight risk and presents a threat to the community if he remains free until the start of his trial on Oct. 18.
According to federal prosecutors, Hecker failed to disclose a $30,000 check that he received in early June from Prudential Life Insurance. The money was deposited into a new bank account that he opened under the name, "JDS Family Holdings LLC," according to the government. He allegedly wrote two checks on that account to "Auto Concepts" totaling $6,215, and checks to the Lafayette Club and Wayzata Country Club totaling $5,875.
Prosecutors noted that the checks to the country clubs were particularly suspicious because he concealed his memberships from bankruptcy trustee Randall Seaver and because he said he couldn't afford to pay for an attorney. The bank reversed the check charges June 18 and returned the $30,000 to Hecker, which he turned over only after Seaver learned of the payments in mid-July.
Prosecutors say that Hecker failed to disclose to Seaver at that time that he also had received four other checks from Prudential totaling $124,000. In the second half of June, the government says, Hecker cashed those checks at Your Exchange, a check-cashing business, paying $3,700 in fees.
Seaver found out about the money last month and demanded repayment. Hecker agreed, prosecutors say, tacitly conceding that the money belongs to the bankruptcy estate.
Leased Kia in St. Cloud
Finally, the prosecutors said that they learned this week that Hecker had leased a Kia Soul for $329.50 a month. He financed the lease from Kia of St. Cloud through New Dimension Advisors LLC, a consulting firm he created after his bankruptcy filing. The government contends New Dimension is nothing more than a mechanism for Hecker to move money and pay personal expenses.
Hecker told a representative at Kia of St. Cloud via phone that his consulting income ranges from $5,000 to $40,000 a month, and said to put down on the financing application that it averages $10,000 a month, the government said. Prosecutors say that constitutes probable cause to believe that Hecker committed wire fraud in obtaining the lease.
When U.S. Magistrate Judge Susan Nelson appointed Toder to represent Hecker in April, she said he must pay his legal expenses if money becomes available.
So if the income Hecker claimed on his Kia lease is real, prosecutors say, he violated the court's order requiring that he report any change in income and must repay the government for his legal expenses.
Hecker was already "a serious flight risk" when he was indicted in February, the prosecutors argue.
"The situation has worsened, particularly as trial in this matter looms only a few weeks away, based on the defendant's acts demonstrating his danger to the community through his ongoing fraud."
Dan Browning • 612-673-4493 David Phelps • 612-673-7269
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