In a statement released today, car finance company GMAC adamantly denies claims it acted improperly in its dealings with embattled auto dealer Denny Hecker.
"The suggestions that GMAC has acted inappropriately are baseless, irresponsible and willfully defamatory, as an attempt to deflect attention from ongoing legal issues consuming Mr. Hecker and his attorneys," GMAC said.
The statement comes a day after attorneys for Hecker announced that they plan to file suit against GMAC, the company that used to loan money to Hecker's customers. Hecker's attorneys expect that either they or a sheriff will serve the summons on Monday, as GMAC's attorney was out of the office today.
Hecker's attorneys have vowed to fight allegations that the prominent dealer defrauded hundreds of customers. They say the auto loan company is responsible for hundreds of complaints that have touched off a criminal investigation of Hecker's business.
GMAC said Hecker's dealerships collected and owed the taxes and fees in the deals being investigated by the state. The auto loan company denied that it took over operations of the 26 dealerships Hecker once owned around the state.
Instead, company officials said that GMAC sent staff only to ensure that the terms and conditions of loan agreements were being met.
GMAC also alleges that it had detailed discussions with Hecker and William Mohrman, his attorney, regarding the unpaid sales tax, title and license fees. GMAC said it provided detailed accounting of the vehicle transactions, and sent checks to each dealership for the costs associated with those transactions.
“The suggestions that GMAC has acted inappropriately are baseless, irresponsible and willfully defamatory.”Statement from GMAC
The auto loan company claims to have documentation confirming that the checks were received and cashed by three dealerships.
Marsh Halberg, another attorney representing Hecker, said other finance companies, such as Toyota and Hyundai Financial and US Bank, are cooperating with Hecker's dealers as they go through bankruptcy.
"It didn't have to be this way. I gave you three examples of three separate lenders that chose to work with the Denny Hecker organization in a positive way, so that the little guy in the middle wouldn't get squeezed by this problem. GMAC has chosen not to do that," said Halberg.
Halberg demanded that GMAC account for its finances and pay damages to Hecker dealerships.
The anticipated court action followed a day of charges and counter-charges involving Hecker's once-sprawling auto empire. The Minnesota State Patrol has launched a criminal investigation into dozens of consumer complaints of fraud involving sales at some of Hecker's dealerships.
Customers had been unable to obtain clear titles, or get license plates or tabs for their new cars, because state fees hadn't been paid.
The complaints are being made by customers in 15 counties across Minnesota who have either purchased or traded in a vehicle at one of Denny Hecker's dealerships during the past several months, according to Col. Mark Dunaski, chief of the Minnesota State Patrol.
"Based on the nature of the complaints we've received so far, we have reason to believe motor vehicle fraud may have occurred," Dunaski told reporters at a Wednesday news conference. "The number and severity of citizen complaints prompted us to take action, with the goal of resolving the problems both for consumers and the state of Minnesota."
The state investigation is looking at complaints from consumers who purchased a vehicle, paid the 6.5 percent sales tax, title and license registration fees to the dealer, but never received their title or license plates.
Officials are also investigating complaints from consumers who traded in their vehicles, and were later informed by their lender that the lien on the vehicle had not been paid off.
Dunaski explained that Minnesota requires auto dealers to remit the sales tax on vehicle sales and other fees to the state, and to remove liens on vehicles they take in trade. Failure to do either is a felony, he said.
Dunaski said it was far too early to estimate how much tax money was not paid to the state.
He added that Hecker has not been charged and does not face imminent arrest.
The Minnesota State Patrol is asking anyone who had problems with a Hecker car purchase to call its toll-free hotline at 800-593-5000.
(The Associated Press contributed to this report.)