Ex-Hecker employee sentenced to probation

Loyal to a fault.

That's how his defense attorney described James Gustafson, who began clearing snow off cars for auto dealer Denny Hecker when he was just 16 years old.

Gustafson, 49, was sentenced Thursday to 120 hours of community service, two years of probation and a $1,000 fine for his role in the Hecker fraud. He had faced nearly three years in prison.

He pleaded guilty last year to lying to the government, preparing a fake auto title for Hecker's 2004 Cadillac Escalade and ushering the phony paperwork through the state. For a time, the fraud helped Hecker hide assets from Chrysler Financial and the bankruptcy court.

"Toward the end, the [Hecker] entities became a toxic waste site and my client got contaminated by that and he did a bad thing," Gustafson's attorney Fred Bruno told the court.

Before the sentencing began, a flushed Gustafson blinked back tears and told a reporter, "We just got caught up, you know?"

Gustafson worked for Hecker 33 years, rising through the ranks from errand boy to a man making $150,000 a year as fleet manager of Hecker's Walden leasing business. Gustafson's mother described her son, who lives in Maple Grove, as a loyal former Boy Scout who used to play the trumpet. He appeared calm and sorrowful before the sentence was handed down by U.S. District Judge Joan Ericksen.

Bruno told the judge that his client deserved probation despite initially refusing to cooperate with investigators looking into the Hecker fraud. Bruno portrayed his client as being "loyal to a fault" to the only employer he ever had -- he simply did as he was told.

Bruno said his client won't cause society further trouble and noted that Gustafson is the "last employee standing" of any Hecker entity. He now works on behalf of U.S. Bank and has collected $2 million in outstanding debts and other assets belonging to Hecker's Walden lease firm, which the bank now owns.

In one case, Gustafson's digging unearthed a forgotten $18 million lease for Harley Davidson motorcycles with Eagle Rider in California, Bruno said. The discovery resulted in collections.

"He's a workhorse," Bruno said.

Prosecutor Nancy Brasel also recommended that Gustafson be sentenced to probation, not prison. She noted that, after an initial period in which Gustafson lied and tried to protect Hecker, he eventually "cooperated fully, extensively and effectively."

"In the real world, people are honest," Ericksen said while lecturing Gustafson about the need to be truthful in the future. She chastised him for the odd language he used in his written statement to the court about "the opportunity" for people "to conduct background checks" into his college education.

Bruno later explained to baffled observers that Gustafson was once asked by prosecutors if he had graduated from college and he wrongly answered that he had. In reality, Gustafson was allowed to attend his graduation ceremony at Augsburg College, but was actually two language credits shy of the requirements needed for a degree. He never returned to finish the course work, Bruno said.

More sentencings to come

Gustafson is the first of four Hecker co-defendants to have their day in court.

Hecker, 58, and Steven Leach, 55, a former senior executive with the Hecker organization, were indicted nearly a year ago for doctoring paperwork in a 2007 scheme that defrauded Chrysler Financial out of more than $80 million in loans. Both have entered guilty pleas and are scheduled to be sentenced next week.

Besides Hecker, Leach and Gustafson, Hecker's girlfriend, Christi Rowan, faces up to six months in jail for her role in helping Hecker obtain and hide a Range Rover from the bankruptcy court. She pleaded guilty to bank fraud and bankruptcy fraud and is expected to be sentenced sometime this month.

Of the four defendants, only Hecker is behind bars. Chief U.S. District Judge Michael Davis sent him to the Sherburne County jail in October after finding that he had lied to the court and failed to account for how he spent nearly $124,000 in ill-gotten insurance money last summer.