Hunting for more Hecker money

The trustee handling the Denny Hecker bankruptcy case was granted subpoena power Wednesday to help him track down about $154,000 worth of insurance policy proceeds that the fallen auto mogul may have hidden from the court.

The ruling by U.S. Bankruptcy Judge Robert Kressel will allow trustee attorney Matthew Burton to subpoena records from Prudential Insurance Co., TransAmerica Life and ReliaStar Life. The ruling also lets Burton get records from Pawn America, Payday America and Your Exchange check cashing services.

Trustee Randy Seaver and Burton have accused Hecker of obtaining at least five checks from Prudential insurance policies that he either cashed in or borrowed against. Hecker then allegedly used Pawn America, Payday America or Your Exchange to cash the insurance checks and buy prepaid credit cards.

The transactions netted Hecker at least $154,000 at a time when Hecker claimed to have no money and was appointed a public defender to defend him against criminal fraud charges filed earlier this year. Hecker filed for bankruptcy in June 2009 claiming $767 million in debt. He has since given up his fight in bankruptcy court, but according to court records still owes more than $200 million.

Seaver sued Hecker and his girlfriend, Christi Rowan, last week demanding they turn all insurance funds over to the court and list exactly how they obtained and spent the money. To date only $45,000 of the $154,000 in proceeds has been turned over to the court, said Seaver's attorney Matt Burton.

Burton said Hecker used the insurance money to pay the Benilde St. Margaret School tuition for Rowan's children. He also gave the court copies of several checks Hecker wrote, including checks written in June for a dirt bike for his son.

Kressel's ruling Wednesday allows Seaver to pry further to see if other insurance policies or funds were wrongly tapped or hidden from the court.

Allegations surrounding Hecker's tapping of insurance policies to fund an extravagant lifestyle first surfaced on Sept. 2 and ultimately led criminal prosecutors to demand that Hecker be immediately jailed for bankruptcy fraud. The situation prompted Hecker to strike a deal with prosecutors on Sept. 7. He pleaded guilty to one count of bankruptcy fraud and one count of conspiracy for defrauding Chrysler Financial out of more than $80 million.

Hecker now faces up to 10 years in prison. His co-defendant, Steven Leach, has maintained his not guilty plea and begins his criminal trial on Oct. 18.

Hecker's attorney Barbara May said Wednesday that the details over the insurance money that have become public over the last two weeks are not going to affect Hecker's plea agreement.

May said the lawsuit Seaver filed last week against Hecker and his request for subpoenas and depositions are just designed "to put Denny Hecker on the rack and turn those screws ... But even on the rack, I don't think there is anything more for Denny to give."

Last week, Hecker provided Seaver with a handwritten list detailing how he spent $154,000 in insurance monies.

Hecker also gave $8,000 of the money to Rowan, spent $2,700 at Manny's Steakhouse and paid $5,750 in rent for a Washington Avenue office in Minneapolis; another $5,000 went to pay for movers, May said.

He also spent about $15,000 on a "cash pass;" $2,800 on prescription drugs, $600 on "shrinks," $690 on parking violations and towing, $4,400 on a dentist and $1,000 on "nitro" treatments.

May noted that while prosecutors won't seek additional charges for Hecker's spending, Judge Kressel can still order Hecker to turn over all cash and to detail all his spending for the sake of the bankruptcy court.

Failure to do so could result in a contempt ruling by the judge, Burton noted.

Hecker once owned 26 auto dealerships, the Advantage Rent-A-Car company and several fleet and leasing firms, which combined once generated an estimated $6 billion in annual revenues. Hecker filed for bankruptcy in June 2009 after Chrysler Financial and other financing firms pulled his credit. Allegations arose soon after that Hecker had committed fraud.