Wheels of justice turn for 2 Denny Hecker employees

One former employee of fallen auto dealer Denny Hecker was found in contempt of court Wednesday, while another former associate asked that most of the criminal charges against him be dropped.

U.S. Bankruptcy Judge Robert Kressel found James Gustafson in contempt of court after he failed to comply with an April court order to turn over documents to the bankruptcy trustee in charge of liquidating Hecker's assets.

Gustafson, who is accused of helping Hecker hide assets from the court and raid his children's trust funds, must pay a $550 fine and appear in court in one week. All requested documents must be turned over by that time, or Gustafson will be taken into custody, Kressel told attorney Steve Meshbesher after a testy exchange. "I have had it up to here with months of delays," Kressel said.

In a separate matter, Steven Leach sought dismissal of nine of the 15 criminal charges alleging he helped Hecker to defraud auto lenders out of millions. He also asked that his trial be separate from Hecker's case, which is scheduled for trial in October.

His attorney, Robert Sicoli, said in a motion in U.S. District Court that Leach needs to sever ties with Hecker's criminal case to avoid confusing a jury. Sicoli also said the adverse publicity surrounding Hecker's turbulent bankruptcy, divorce and criminal cases would prejudice a jury. He submitted dozens of news reports as evidence.

Hecker and Leach were indicted in February and March on charges of defrauding Chrysler Financial and various banks out of millions of dollars by providing doctored, omitted or false collateral information on loan applications. Both have pleaded not guilty. Leach's motion papers sought dismissal of conspiracy and wire fraud charges.

A federal judge will consider motions in the criminal case at a hearing, possibly as soon as June 23.

In March, the government filed new charges against Hecker and Leach alleging they schemed to omit key loan documents used to secure $100 million worth of Suzuki vehicles between 2007 and 2008. The altered documents understated collateral and helped defraud Chrysler Financial, U.S. Bank, Carlton Financial and other lenders, the indictment said.

Leach was the president of Hecker's Rosedale Leasing operation and one of the highest lieutenants within the Hecker Automotive Group in St. Louis Park. The company once owned 26 new and used dealership and various lease and fleet operations, but crumbled after loans were called due in late 2008. Hecker filed for bankruptcy one year ago, but gave up his fight to have his debts forgiven.