Fallen auto executive Denny Hecker pleaded not guilty Thursday afternoon to federal charges that he defrauded Chrysler Financial Corp. to the tune of $80 million, including $10 million that Chrysler never recovered.

In a somber courthouse plaza news conference following his plea, Hecker said in a soft voice, "For many months I have had to sit and listen and read comments and allegations and rumors that are just untrue. This has been very painful and time-consuming for my family and myself. Today's indictment is the start of the full story, which will be told in the courtroom."

Asked how he was feeling, Hecker quipped, "I feel great. I've just been indicted."

Bail was set at $25,000 and Hecker was ordered to surrender his passport and obtain court approval before making any out-of-state trips. At the request of federal prosecutors, Hecker also was given a curfew and ordered to wear an electronic device to monitor his location.

U.S. Magistrate Judge Franklin Noel also ordered Hecker to continue his mental health counseling. It was unclear how long Hecker has been undergoing that therapy.

Dressed in a charcoal gray business suit, Hecker appeared calm as he made his first court appearance in connection with the indictment.

Hecker, 57, was flanked by defense attorneys Marsh Halberg and Bill Mauzy and girlfriend Christi Rowan as he entered the federal courthouse in Minneapolis.

Co-defendant and former Hecker executive Steven Leach, 54, also made his first appearance with Hecker and also pleaded not guilty.

The two are charged with one count of conspiracy and five counts of wire fraud. Hecker also faces one count of money laundering.

Following their pleas, Hecker and Leach were booked, fingerprinted, photographed and ordered to fill out bond forms before being released.

Mauzy told reporters that the government was simply copying allegations brought against Hecker by Chrysler Financial, his longtime financing partner.

The "only way" to understand the charges the government has made against Hecker is to understand the 25-year relationship Hecker had with Chrysler Financial and its predecessors, he said. Mauzy noted that Hecker sold more than 50,000 cars and was a leading car salesman for Chrysler Financial until the downturn in the economy put Chrysler "in desperate straits."

Mauzy claimed that Chrysler Financial then looked to reclaim some of its losses by going after Hecker, whom he described as "the person who owed them the most amount of money in the United States." Chrysler Financial "sought a way out of their contractual relationship with Hecker... and saw a way to renege on their obligation to extend credit. And the way they did it was to come up with a business dispute" centered on the collateral of one of Hecker's loans.

Mauzy went on to say that Chrysler Financial called all of Hecker's loans due, a move followed by other bankers and one that ultimately led to the "collapse" of Hecker's auto businesses, which spanned 26 dealerships, Advantage Rent-A-Car, and several large fleet and leasing operations.

Officials from Chrysler Financial declined to comment, citing the ongoing litigation. In a September lawsuit the company accused Hecker of altering a letter from Hyundai Motor company in 2007 to say that it was willing to sell Hecker 4,855 vehicles that it would repurchase if Hecker could not sell them. The original letter said Hyundai would sell Hecker just 605 vehicles with the repurchase guarantee, the complaint said.

Wednesday's federal indictment accused Hecker and Leach of ordering the alterations and using the letter to defraud Chrysler Financial into lending Hecker $80 million.

Hecker was additionally charged with money laundering for allegedly steering $500,000 in business funds from his company bank account to his personal bank account at Wells Fargo.

The indictment also alleges that Hecker used the fraudulently obtained loan to fund an extravagant lifestyle; that he failed to turn over customer's tax, title and license fees to the state, and that he kept vehicle sales proceeds instead of turning them over to his lenders.

If convicted, both men face up to 20 years of prison for each count of wire fraud. Hecker faces up to 10 years in prison if convicted on the money-laundering charges.

The criminal case that begins this week came about after months of investigation by the FBI, the IRS and the Minnesota State Patrol.

Dee DePass • 612-673-7725