Hecker's next stop: prison cell

A key chapter in Denny Hecker's stratospheric crash from world-class car dealer to the butt of water cooler humor ended Tuesday when he pleaded guilty to two criminal charges connected to his rapid demise.

Gone will be the days of his Medina mansion. Hecker's next address will be with the U.S. Bureau of Prisons.

It was a subdued and contrite Hecker who pleaded guilty to fraud and conspiracy in federal court Tuesday under an agreement reached with prosecutors over the long Labor Day weekend.

Hecker -- who once owned 26 dealerships and served as the ubiquitous face of his operation -- wore a charcoal gray suit that matched his grim expression as he entered the courtroom. Girlfriend Christi Rowan, who became a government witness against Hecker, came to his side as he walked to the defense table and gave him a kiss on the cheek.

The offenses to which Hecker pleaded guilty each carry a maximum penalty of five years, meaning Hecker faces up to 10 years in prison. The actual sentence will be left to U.S. District Judge Joan Erickson.

Hecker was accused of hiding assets from the U.S. Bankruptcy Court and obtaining loans from Chrysler Financial and other lenders using false or incomplete information.

The agreement spares Hecker, 58, from trial and exposure to other charges in a 26-count indictment that carried 10- and 20-year maximum sentences. It also spares Hecker from being sent to jail for previously violating terms of his release while the case was in progress.

When asked before the hearing why he was changing his plea, he declined to comment.

After the 70-minute hearing, Hecker's court-appointed attorney, Brian Toder, described Hecker as "relieved" to have the criminal matter resolved.

"It's a Pyrrhic victory," Toder said of the dropped charges. "He's a good man who got into a situation and now he has to go to jail."

Hecker admits to schemes

Prosecutors said they were pleased with the end result.

In court, Hecker admitted to schemes to obtain financing from Chrysler Financial and other lenders. In one deal, he admitted arranging for false paperwork to be sent to Chrysler Financial indicating he had a guaranteed repurchase agreement with Hyundai for 5,000 vehicles when he didn't. In other deals over several years, he admitted he failed to tell lenders about incentive payments from Suzuki.

Altogether, the fraud cost lenders $20 million, Hecker admitted in the plea deal.

Hecker mostly answered "yes" or "correct" to a series of questions from Engisch about his crimes. When asked by the judge to explain further, he attributed the fraud to "an opportunity to obtain a large amount of [manufacturer] incentives to use until the vehicles were sold."

Hecker also admitted to transferring $33,000 to a bank account under his control but in the name of his former father-in-law to avoid having the money frozen after he filed for bankruptcy in June 2009.

Under the plea bargain, Hecker also could face fines of $250,000 on each of the two counts.

The guilty pleas bring an inglorious end to Hecker's run as a once-dominant auto dealer in Minnesota.

At the height of his business career, Hecker owned 26 dealerships and starred in his own television, newspaper and bus advertising.

But in the last year, his lavish, free-spending lifestyle became the source of controversy. He forfeited estates on Cross Lake in northern Minnesota and in Medina as a bankruptcy trustee gathered and liquidated assets to pay off lenders for what likely will be pennies on the dollar, given the $767 million in debt claimed by Hecker.

Hecker also had an ongoing headline-making dispute with an ex-wife, Tamitha, whom he accused of hiding money from him.

Hecker was first indicted in February, then reindicted in March and July. The charges centered on transactions with Chrysler Financial in which Hecker and co-defendant and former employee Steve Leach allegedly doctored financial documents to get loans.

Hecker and Leach were scheduled to go to trial before Erickson on Oct. 18. Robert Sicoli, Leach's attorney, said his client is prepared to go to trial on that date.

"We're glad Denny Hecker is taking responsibility for this because Denny Hecker did it," Sicoli said of the false financial transactions for which Hecker and Leach are charged. "Steve Leach was not involved. My client quit because of Denny Hecker's actions."