Former Minnesota auto mogul Denny Hecker has pleaded not guilty to federal fraud charges alleging he operated a multi-million dollar scheme to defraud lenders.
Hecker, 57, was released Thursday. A judge ordered that Hecker turn over his passport, submit to electronic monitoring, and continue with mental health therapy.
"For many months, I've had to sit and listen and read comments and allegations and rumors that are just untrue," Hecker said at a brief press conference with his attorneys after the hearing. "This has been very painful and time-consuming for my family and myself. Today's indictment is the start of the full story, which we told in the courtroom."
When asked how he was feeling, Hecker said, "I feel great," but added, "I've just been indicted."
Attorney Bill Mauzy said Chrysler Financial "looked at some documents" and "started claiming fraud" as a way to get out of contractual obligations and receive loan repayments from Hecker.
"It's like a stress triathalon," Mauzy said. "He's got bankruptcy ligitation. He's got a divorce, and he has criminal prosecution. The type of pressure from those three sources would lead a lesser man to quit and to surrender. Hecker is not going to do that. Denny's a fighter."
Hecker's co-defendant, former executive Steven Joseph Leach, also pleaded not guilty Thursday to similar charges and was released under conditions.
Hecker and Leach were indicted Wednesday on one count of conspiracy to commit wire fraud and five counts of wire fraud. Hecker is also charged with one count of money laundering.
Hecker was one of Minnesota's biggest car and truck dealers before his businesses collapsed and he ended up filing for bankruptcy in June.
The indictment doesn't contain any new revelations about Hecker. The allegations include ripping off Chrysler Financial and other lenders, hiding assets from the bankruptcy court, conspiring to defraud business partners and customers, not giving the state sales tax money, and title and license fees that customers paid to Hecker's dealerships.
But now Hecker has the U.S. Department of Justice after him. These are the first criminal charges against Hecker. The U.S. Attorney has decided he wants to nail Hecker in court and put him in jail, probably for the rest of his life.
If convicted, Hecker faces up to 20 years in prison for each count of conspiracy to commit wire fraud and 20 years on each count of wire fraud. Hecker also faces 10 years in prison if convicted of money laundering.
Prosecutors charge that Hecker and Leach gave fraudulent documents to Chrysler Financial to obtain $80 million in financing. The money was for the purchase of 5,000 vehicles from Hyundai Motor America.
Chrysler Financial allegedly lost over $10 million in the deal.
The U.S. Attorney's office charges Hecker and others covered up the fraud and Hecker filed for bankruptcy to avoid paying Chrysler and other lenders.
The indictment also states Hecker and fellow conspirators lied to or misled U.S. Bank and other lenders to obtain millions of dollars in loans. The feds allege Hecker and his underlings kept the money from vehicle sales instead of paying off lenders who were owed money on the vehicles.
Prosecutors also charged Hecker and others with keeping sales tax, title and license payments that should have been delivered to the State of Minnesota.
The U.S. Attorney's Office wouldn't comment on the indictment. A spokeswoman said the office won't have anything to say until the case has been resolved, either through a plea or trial.
When he filed for bankruptcy last year, Hecker reported assets of about $18.5 million and liabilities of about $770 million, but federal prosecutors charge Hecker has concealed wealth and is continuing to live what they say is an extravagant lifestyle.
(The Associated Press contributed to this report.)