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Bankrupt Dealer Denny Hecker Sentenced To 10 Years In Prison For Fraud

February 11, 2011
3 min to read


Federal Judge Joan Ericksen sentenced the former auto dealer today to 10 years in prison, the maximum allowed. He will also be required to pay $31 million in restitution.


Hecker, 58, pleaded guilty to the charges five months ago.

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The judge recommended Hecker be sent to a minimum security prison and be placed in a federal residential drug abuse treatment program during the last year of his sentence, which means he would be in prison for only nine years, reported Automotive News.


Hecker's lawyer, Bill Mauzy, said it will take six weeks for the Federal Bureau of Prisons to place Hecker in a prison. In the meantime, he will remain in jail in Minneapolis. Mauzy said Hecker will be credited for time served.


Hecker has been in jail since October after a judge said he was fed up with his failure to repay his public defender costs although he continued to make expensive purchases.


Mauzy said he expects Hecker to earn credits for “good behavior,” allowing him to be released after serving only seven years.


Ericksen denied Hecker's request for a three-week reprieve to return home to be with his family before his prison sentence.

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Hecker cried when he told the judge about his two children, ages 16 and 9, saying he wanted to tell them goodbye.


“I recognize this is a tremendous hardship on your children and I'm not happy about that,” said Ericksen. “I can't let you out. I can't let you out. I just can't.”


Hecker was indicted nearly a year ago for falsifying documents as part of a 2007 scheme that defrauded Chrysler Financial out of more than $80 million in loans. Hyundai, Suzuki, U.S. Bank and other lenders also were defrauded. Three thousand employees lost their jobs.


Hecker was once a ubiquitous face among auto dealers, owning a group of 26 dealerships with the majority in Minnesota. He also owned Rosedale Leasing Co., a large auto leasing company.


When he filed for bankruptcy in June 2009, Hecker's debt was listed at $767 million. Most of what he owed stemmed from personal guarantees on business loans.

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Some of Hecker's associates have been sentenced for their involvement in the scheme. Last week Steven Leach was sentenced to 27 months in prison. The former president of Rosedale Dodge was also ordered to pay $14.2 million in restitution, according to the St. Paul Pioneer Press.


Another Hecker employee, James Gustafson, escaped prison time earlier this month. Gustafson, who worked for Hecker since he was 16, helped his employer hide assets from Chrysler Financial and the bankruptcy court, the Pioneer Press reported.


Prosecutors are also recommending a 6-month prison term for Christi Rowan, Hecker's girlfriend, who attended the sentencing.


She and Hecker were sued by a bankruptcy trustee in September for allegedly hiding assets from the court by cashing out or borrowing against $124,353 in Prudential Life Insurance policies, according to the Minneapolis Star Tribune.


A date for her sentencing has not been set.

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In February 2010, a judge ruled that Hecker's $80 million debt to Chrysler Financial would not be forgiven. The lender withdrew its line of credit to Hecker in October 2008.


On Wednesday, a federal judge ordered Hecker's American Express gift cards to be liquidated and used to repay taxpayers for the cost of defending the former auto mogul.


The gift cards, worth $11,420.61, were once locked away in Hecker's lockbox, Minneapolis/Saint Paul TV station KSTP reported.


According to authorities, Hecker had sworn under oath that he didn't have the funds to pay for an attorney, and an attorney was appointed to represent Hecker at the public's expense.


Hecker was sentenced in the U.S. District Court in Minneapolis.

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