Bankruptcy trustee Randy Seaver holds one a Rolex watch that belonged to Denny Hecker and that will be auctioned off. It's valued at $60,000.
Feed Loader, Star Tribune
Bankruptcy trustee Randy Seaver with some of the luxury watches and guns of Denny Hecker that will be auctioned off.
Feed Loader, Star Tribune
Denny Hecker's watches.
Feed Loader, Star Tribune
On the heels of Hecker
- Article by: DEE DePASS
- Star Tribune
- December 1, 2010 - 8:56 AM
The contest pitted a wild hare against a plodding tortoise.
Today the hare is in jail. And the tortoise? He's still wrapping up his work to unravel one of Minnesota's biggest bankruptcy frauds.
Randy Seaver, who describes himself as a "lowly bankruptcy trustee," is as quiet and unassuming as bankrupt auto dealer Denny Hecker is brash and defiant.
Hecker, 58, is perhaps best known in Minnesota for using his likeness to hawk autos and mortgages on TV, billboards and bus advertisements across Minnesota.
The serious-minded Seaver, 59, is an intensely private person who's quick to respond with a "no comment." But put him in a courtroom to depose a witness, and Seaver's hound-like determination proved more than a match for the evasive Hecker.
During a hearing in July 2009, Seaver fired question after question at Hecker: When did he buy jewelry and fur coats? When did he pay stock margin calls, buy or sell property? Why did he create 100 limited liability corporations? Did he squirrel away funds in offshore accounts? Seaver also demanded to know about fleet loan documents Hecker allegedly forged. Hecker's attorney refused to let his client answer.
With jaw clenched, Seaver vowed to take the matter to the U.S. Bankruptcy Court judge. From that day forward, Seaver, who is a methodical jogger, paced himself during a 17-month investigation and demystified the hide-the-assets game played by the gregarious auto pitchman.
"This guy never passes up a dime," said Barbara May. And she should know. May is Hecker's pro bono bankruptcy attorney.
Seaver grew up on a farm with 25 dairy cows, where the daily rhythm of chores instilled a discipline that would serve him well in years to come. The rail-thin Seaver was "used to a lot of hard work," he said during a rare interview at his bland Burnsville law office, where piles of stark-white boxes are marked "Hecker files."
On the farm "the primary recreation, at least for me, was hunting and fishing, which I suppose, in part, leads into what I do here. I always enjoy the chase. I always have," he said.
Seaver graduated from Michigan State University and the William Mitchell College of Law, then worked for attorneys in Edina and several bankruptcy trustees. He learned early in his law career that he had a fondness for sifting through records, cross-referencing facts and linking them with seemingly irrelevant data.
"His ability to parse through volumes of information and put puzzles together is quite amazing," said Matt Burton, who has been Seaver's right-arm attorney, pushing scores of motions and lawsuits through the courts in pursuit of Hecker assets.
Early in the case, Seaver's search through Hecker's homeowner's insurance policy revealed a wedding ring insured for $53,000 that was listed on his 127-page bankruptcy schedule as being worth just $24,000.
An invoice for $6,637 addressed from a storage complex led Seaver to a stash of Hecker possessions in Aspen, Colo.
By carefully examining photos taken by FBI investigators, Seaver located the Rolex watches Hecker had quietly stashed in North Dakota allegedly so jeweler friends could "appraise" them. And then there was the $154,000 from insurance policies Hecker had quietly cashed, after he pleaded poverty and was appointed a public defender at taxpayer expense.
Seaver's patience often tempered Burton's thirst for action. "Whereas I might just want to start the lawsuit, Randy would want to slow it down and get more information from other sources so he can make his case even stronger. I have learned that this a valuable strategy," Burton said.
Weapon of choice: Lawsuits
Seaver first sued Hecker for hiding assets one month after the auto dealer filed for bankruptcy. It would be the first of many. Seaver executed 14 lawsuits and countless subpoenas against Hecker, his girlfriend, his companies and 11 friends, employees, vendors, banks and dealerships in a determined search for assets.
Seaver's hunt was so pervasive that a frustrated Hecker once complained to a reporter that Seaver would "not be satisfied until I am homeless with a sign around my neck that says 'Will work for food.'"
Hecker's attorney Barbara May accused Seaver of being "overly aggressive," and racking up countless motions and subpoenas solely to pile up attorney's fees. It is a charge Seaver denies.
As required by law, Seaver reported his findings of Hecker's activities to the U.S. Trustees office and the U.S. Attorney's office. In January, just six months after Hecker filed for bankruptcy protection, Seaver laid out his case and recommended that the bankruptcy court not forgive a penny of the auto dealers's staggering debt.
In February, U.S. Bankruptcy Judge Robert Kressel ruled that Hecker had withheld documents and lied to the court. The judge refused to forgive $83 million of Hecker's debt to Chrysler Financial.
An enraged Hecker left the courtroom screaming and cursing as his attorney, Bill Mauzy, quickly ushered his client out of earshot.
"Randy certainly has this reputation for being incredibly thorough," said Judge Kressel in a recent interview. "He is living up to [that] reputation."
By March, Hecker had abandoned his entire bankruptcy petition, which leaves him on the hook to creditors for $260 million after a series of auctions, property foreclosures and vehicle repossessions. In September, Hecker pleaded guilty to criminal bankruptcy fraud. He faces up to 10 years in jail.
Assistant U.S. Attorney and lead prosecutor Nicole Engisch acknowledged that Seaver's work "played an important part in our decision to bring bankruptcy fraud charges. ... He never stopped. He was just tremendous."
Doug Kelley, the bankruptcy trustee in the Tom Petters Ponzi scheme case, agrees.
"I have watched Seaver and the lawyers he has chase down all the obstructions that have come up. He has just been a by-the-numbers, by-the-facts, ma'am, straight litigator," said Kelley, who noted that it's "a rare occurrence" for a prosecutor to take a bankruptcy trustee's case and envelop its charges into a criminal case.
Kelley said Seaver is in a unique position: "No one has thumbed his nose at the system like Hecker."
Since June 2009, Seaver's job has been to find and liquidate assets for hundreds of Hecker's creditors -- including Chrysler Financial, to which Hecker once owed $477 million.
The goal early on was to get the alternately defiant or foot-dragging Hecker to turn over documents, jewelry, e-mails and cash to the court. Now it's a matter of looking under more rocks.
To date, Seaver has recovered $3.8 million in assets from Hecker's estate, including $500,000 from property sold at auctions. He and his attorney have asked the court for permission to bill $1.08 million in combined legal fees and expenses. But Seaver's work is not done. Asset liquidations and disbursements to creditors won't finish for about a year.
Tip of the iceberg
In the past year, tips from Twin Cities residents have helped when Hecker would not.
In July, Seaver got a tip that the bankrupt Hecker had walked into a local bank and deposited a $30,000 Prudential life insurance check. Seaver immediately called Hecker attorney Barbara May and demanded the money be turned over to the bankruptcy estate. Hecker forked over a check for $30,000. The money, from a canceled policy, was property of Hecker's bankruptcy estate and creditors -- not Hecker's, Seaver insisted.
Then he petitioned the court to subpoena the bank and Prudential and learned that Hecker was using a check service called Your Exchange to cash his Prudential checks.
He learned the $30,000 was just the tip of the iceberg. Hecker had secretly cashed out or borrowed another $124,000 in insurance policies and proceeded to spend nearly every dime in 80 days on lavish living and repaying friends. He did not let the bankruptcy court or the criminal court know, as he was required to do.
"I was outraged," said Seaver, who sought an injunction barring Hecker and his girlfriend, Christi Rowan, from spending any more of the money. He also demanded a full accounting of where Hecker spent the money.
And that proved to be Hecker's undoing. Seaver's request led to a showdown at a hastily called hearing on Oct. 18 where Chief U.S. District Court Judge Michael Davis demanded answers.
During the hearing, prosecutor Engisch disclosed that Seaver had found another $55,000 in assets that Hecker had failed to turn over to the court.
When pressed by the judge, Hecker couldn't satisfactorily explain why the accounting on two of his own expense ledgers didn't match or why they omitted certain known spending sprees. Hecker also failed to explain to Davis' satisfaction why he paid thousands to send his kids to private school but couldn't repay the court for his public defense costs. Hecker claimed he never got instructions on how to repay the court.
Dissatisfied, Chief Judge Davis ordered Hecker to jail on Oct. 18.
"I mean business," Davis said. "I want to know where the money is."
As U.S. marshals led a shocked Hecker from the courtroom to jail, Seaver looked on expressionless before scooping up two large briefcases and leaving the courtroom without a word.
Dee DePass • 612-673-7725
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