Former Minnesota auto mogul Denny Hecker faces eight additional counts of wire fraud and new bankruptcy fraud charges in an alleged multi-million dollar scheme to defraud lenders, according to a new indictment returned Tuesday by a federal grand jury.
The new charges accuse Hecker, 57, of concealing assets in his bankruptcy case, which began before federal authorities presented evidence leading to criminal charges.
According to the new indictment, Hecker allegedly failed to disclose all of his assets in bankruptcy court, including that he owned a Land Rover, several expensive watches and golf memberships, among other assets.
The new indictment also outlines an additional fraud scheme involving Suzuki Motor.
Receiver Randall Seaver is in charge of gathering Hecker's assets to help pay back the hundreds of millions of dollars Hecker owes creditors. In court filings, Seaver accused Hecker of lying and concealing assets. The judge on the case has said it's clear Hecker has "just lied" during the bankruptcy, trying to hide assets that should be available to satisfy creditors.
There's no total on the value of the assets the government charges Hecker transferred to other people or otherwise concealed, but the assets seem to be worth a at least few million dollars. That's when you count real estate, including a home on Cross Lake, up in Crow Wing County. Assessor records indicate it's worth about $1.4 million.
The previous indictment had charged Hecker and alleged co-conspirator Steven Leach with money laundering, wire fraud and conspiracy to commit wire fraud.
Hecker and Leach have both pleaded not guilty to those charges, which accuse them of giving Chrysler Financial fraudulent documents to obtain $80 million in financing. The money was for the purchase of 5,000 vehicles from Hyundai Motor America.
Chrysler Financial allegedly lost more than $10 million in the deal.
In the new indictment, Hecker and Leach are accused of a similar scheme involving a deal with Suzuki Motor. Hecker and Leach allegedly altered contracts with Suzuki Motor in order to obtain about $100 million in fleet lease financing from Chrysler Financial and other lenders for more than 3,000 Suzuki vehicles.
According to the indictment, Hecker and Leach were then able to get millions of dollars worth of incentive payments and vehicles from Suzuki, which they leased to rental car companies. But the documents sent to the lenders indicated they were paying full dealer invoice price.
Later, after one of Hecker's employees inadvertently sent information about the incentives to Chrysler Financial, the lender demanded payment for the incentives.
Hecker's defense attorneys recently asked a judge to be removed from the case. Hecker claims he does not have the money to pay the attorneys, because the bulk of his assets are tied up in his bankruptcy and divorce proceedings. A judge has scheduled a hearing on this issue for Monday, March 15.
Court filings also indicate the U.S. Attorney's office has sought or executed several search and seizure warrants involving Hecker's former father-in-law, William Prohofsky.
Prohofsky committed suicide last week after he was accused of helping Hecker hide money from creditors. The 71-year-old Prohofsky was the stepfather of Hecker's ex-wife Tamitha.
The warrants cover the car Prohofsky was in when he shot himself, as well as some safe deposits boxes apparently controlled by Prohofsky.