A U.S. bankruptcy trustee has sued jailed auto mogul Denny Hecker and the Minnesota Department of Commerce, claiming the state and other entities collected or issued thousands in unclaimed funds, including a nearly $35,000 check sent to him in prison.

Hecker, who is serving a 10-year federal sentence for defrauding auto lenders and the U.S. Bankruptcy Court, is due to be released from prison next year. Currently at the corrections institute in Pekin, Ill., he is eligible to be released to a halfway house, but has not yet been moved, according to Bureau of Prison records.

In his lawsuit Tuesday, the attorney for the bankruptcy trustee, Randy Seaver, filed an "adversary complaint" in U.S. Bankruptcy Court, saying that the Department of Commerce has collected several "unclaimed funds" that third-party businesses issued to either Hecker or to one of the dozens of limited-liability companies he owned. At one time, Hecker owned 26 new- and used-car dealerships and the Advantage Rent a Car chain in addition to his limited-liability companies.

Seaver's lawsuit said that the Department of Commerce is holding numerous "unclaimed" checks on behalf of Hecker that were issued by various entities to Hecker subsidiaries that went by names such as Jacob Holdings of CrossLake LLC; Walden Leasing; Jacob Holdings of Monticello LLC; Rosedale Dodge; Jacob Holdings of Texas LLC; Southview Chevrolet; and Jacob Holdings of County Rd. 36 LLC.

The complaint said that none of those checks should go to Hecker, but instead should be directed toward satisfying a 2011 court judgment against Hecker in the amount of nearly $295,000.

"While incarcerated, [Hecker] has received funds which could have been used to partially satisfy the judgment," the complaint said.

Seaver noted one case in August 2016, in which the city of Inver Grove Heights mailed a check for $34,469.28 to Hecker via a federal prison post office box for inmates. The check was made out to a Hecker-owned company called Jacob Holding of Highway 110 LLC. The complaint said that the company was one of Hecker's "many defunct corporate entities."

The Department of Justice eventually interceded and gave the check to the U.S. Bankruptcy Court for restitution processing. Seaver said he wants to make sure that all past and future payments to Hecker or his subsidiaries land in the hands of the bankruptcy court.

Commerce Department spokesman Ross Corson said the department is the repository for all unclaimed money that can't find its way to the person whose name is on the check. The department, he said, is required by law to collect and hold any unclaimed money that companies issue to Minnesota residents or businesses.

"It can be an uncashed payroll check, a refund, insurance payment or money from a forgotten bank account," Corson said. "If the [check issuing] business can't locate the person or business, after a certain period of time, the [check issuer] is required by law to turn those funds over to the state as unclaimed property and those funds are held in perpetuity for whomever the rightful owner might be."

A lawsuit has to be filed by the bankruptcy trustee's office in order to steer the funds to the bankruptcy court, Corson explained. "That is standard practice."

Seaver is asking the government to issue an order noting that any unclaimed funds for Hecker are the rightful property of the bankruptcy estate or subject to court judgment.

Hecker filed for bankruptcy protection in June 2009 claiming he had $767 million in debt and only $18 million in assets. Hecker, who continued to live large, was subsequently found to be hiding assets from the court and the FBI. He was ultimately denied bankruptcy protection, meaning he had to repay all $767 million in debts.

He was separately indicted and pleaded guilty in 2010 to fraud charges for altering loan documents and defrauding Chrysler Financial and other auto lenders out of millions of dollars. At the time, the court ordered Hecker to pay $31 million in restitution to victims.

Seaver and his attorneys spent years selling Hecker's holdings from homes to watches, cars, golf clubs, guns, snowmobiles and other recreational toys in an effort to recoup money for creditors. To date, the estate has collected more than $9 million for creditors, according to the bankruptcy court.