MINNEAPOLIS — In the 1990s through mid-2000s, Denny Hecker jetted around the country almost daily on one of 14 private planes he owned over those years, commanding an interconnected maze of businesses that grew to include 236 closely held private companies.
The wealth-flaunting mogul from modest means piled up millions in revenue each month and borrowed millions more from willing lenders as his empire of auto dealerships, auto leasing companies and related businesses, and an insatiable appetite for success, grew ever larger.
A few years later, he was earning 12 cents an hour teaching a business class in prison. The students were his fellow convicts. And the flying he did was from one federal penitentiary to another while shackled to the floor of one of the U.S. Marshals' ancient "Con Air" planes.
Hecker, now 66, pleaded guilty in 2010 to conspiracy and bankruptcy fraud and was sentenced in 2011 to 10 years in prison for defrauding Chrysler Financial and other lenders out of more than $80 million in loans and $13 million in losses by falsifying loan documents.
But now, the onetime Minneapolis-based tycoon -- whose over-the-top lifestyle and spectacular fall in the wake of the Great Recession shattered lives and left him with a mountain of debt -- is free and is talking.
In an exclusive interview with Automotive News last week, conducted in the conference room of a borrowed office here, this former poster boy for a life of excess insists that seven years of incarceration, a heart attack and a cancer scare have left him a changed man — albeit one who still knows how to make a buck.
Hecker, paroled to a halfway house here in March, has written a book that will come out in September and has launched a business, D.E.H. Consulting. But even if his new ventures take off, he insists he is done with what he calls the "roller coaster" of his former lifestyle.
Still dapper and still a charmer, this former titan is today relaxed, easygoing and, he says, contented. And he has a few messages for dealers who might, as he did, mistake a run of good fortune for invincibility:
Luck runs out.
Circumstances change quickly.
And your comfortable world can turn into a hellscape in an instant.
"Car dealers have big egos; it just goes with their success," Hecker said. "And sometimes, you know, you start feeding that ego, and there's no end to it. It's an addiction."
Hecker started out as a 19-year-old salesman at a Minneapolis Dodge dealership in June 1971, still living in his parents' 800-square-foot house. He had scrubbed out of college and a failed bid to sell pots and pans. Hecker's father owned a dry-cleaning business, but the young man fell in love with the car business.
In his first month, Hecker says, he sold 13 or 14 cars. Within three months, the store's owner made him a manager. He moved to another Dodge dealership nearby three years later, taking over as used-car manager and firing the entire sales team when the staffers resisted his ideas.
Through most of the 1970s, Hecker worked in Minneapolis Chrysler or Dodge dealerships. In 1978, he took over as dealer principal at the struggling Central Chrysler dealership in suburban Roseville, Minn., which he had joined as used-car manager. With Hecker at the helm, the dealership closed.
Hecker says closing Central Chrysler was "my biggest break in life." While at the dealership, Hecker met Walter Bush — former owner of the Minnesota North Stars professional hockey team — who recruited Hecker and sent him to a friend, Ralph Thomas, who was looking for someone to run the Minneapolis Auto Auction.
"I didn't know anything about auctions," Hecker said. "I knew a lot about cars, and I had been to a million auctions."
The job, however, wasn't enough. Hecker wanted an ownership stake.
"It was a pretty gutsy move for a guy with 10 cents in his pocket," he said.
But it worked. Hecker, partnered with Bush, grew the auction from 10,000 vehicles per year to 40,000 and eventually sold the business to General Electric, after buying a Dodge dealership and a Nissan dealership in Florida and starting a company called Walden Leasing.
Walden Leasing, and a larger similar company, Rosedale Leasing, operated as a middleman, buying vehicles from manufacturers and leasing them to the rental car industry. The venture started small, with just 200 cars that the company would own cradle to grave. But the business model of holding the paper on thousands of cars would turn out to be one of the keys to Hecker's unraveling.
"By the time the Great Recession started, we had something like 35,000 cars under lease," he said. "The leasing company was really the generator of the empire."
His realm eventually stretched across the country, encompassing dealerships, leasing companies, vehicle auctions and other related and unrelated businesses. Running it meant flying almost every day, first on commercial aircraft and later on what would become a fleet of private planes.
Hecker was a kingpin in Minneapolis, the hub of his empire. His dealerships had been there. His planes were parked in hangars next to the fleet of corporate jets kept by retailing giant Target. As his wealth and influence grew, he says, he became addicted to negotiating deals.
"A long-term investment for me was a year," he said. "If I was an investor, there better be a clear exit strategy for me because my attention span would just go away. I had always looked for opportunities and bought other people's problems, buying something that was broken. When the guy is just about out of breath and ready to be put in the ground and is ready to sell, that's when I raised my hand and said, 'I'm your guy.' "
The pace took its toll on Hecker's home life — he has been divorced five times. While he was a federal prisoner, he married and subsequently divorced his girlfriend at the time he was arrested. Yet, no matter how many deals Hecker did, it was never enough.
"I don't think that for an eight- or nine-year run there wasn't anything that I wanted that I couldn't get," he said. Nor were there any limits on how he would spend money, or so it seemed. But if Hecker chewed through life and business in the 1990s and early 2000s, the world bit back hard beginning in 2008.
He kept piling up debt and owed money everywhere. Still, he had no trouble getting new loans for whatever new deal he wanted to make, whatever trinket he bought on a whim.
Take, for example, his 5-acre compound in Crosslake, Minn., with its 11,880-square-foot split-log cabin, five guesthouses, five docks and 18 garage stalls.
"I built a new house, and it was a big house, and so, rather than applying for a mortgage, our controller put the bid out to U.S. Bank, Wells Fargo, Chase, saying, 'Look we're looking for your best deal, and whoever gives us the best deal probably gets more business accounts, and if you're not the winner, you're probably going to lose some," Hecker said.
"People say it doesn't matter who you are. Yes, it does."
Until 2008, he had no problem getting credit. Then suddenly, everyone had a problem getting credit. Hecker was dangerously over-leveraged, with no "dry powder" to respond to a collapsing economy aimed directly at every corner of the auto industry.
"When the financial crisis of 2008 hit, the empire I had, and the cost of money ... took a lot of turns. One company that I had taken on, as a project, was Advantage Rent a Car," he said. "It was [supposed] to be a flip."
"We made a deal, and I took their problem over, and it was always meant to be sold," he said. Chrysler Financial financed the deal.
But Advantage was a weak player in a crowded market. And when business travel stopped as companies downsized, the car rental business fell off a cliff.
"I think I lost $2 [million] or $3 million a month for a year of my own money," Hecker said. "I couldn't get rid of it. It burned up lots of money."
A dispute with Chrysler arose over the Advantage transaction and other credit lines from the company. With that and "other issues," Hecker says he began to feel the stress.
"I developed a habit with prescription drugs," he said. "I was maybe doing 10 or 15 Vicodin a day. I had developed a drinking problem. I had never drank in my life, but the pressure was so great, just trying to wake up every day and try to hold things together."
During his rise, Hecker had signed personally for almost all of his loans, and they were coming due.
"I didn't get hit just with Advantage," he said. "The whole group slowed down; retail sales slowed down."
All his effort went to "putting out fires" across his empire while ignoring pieces that were working better.
It was a huge mistake.
Chrysler and its captive finance arm, Chrysler Financial, accused Hecker of submitting fraudulent loan documents, making it even harder for him to obtain credit. On Nov. 21, 2008, facing huge losses, Hecker closed six of his dealerships in Minnesota and sold three others. By the end of the following September, he had sold his last remaining dealership.
"It was painful, and it was painful for the people that worked for me, and they were some great people," Hecker said.
The climate of the times didn't help Hecker.
In Minnesota, businessman Tom Petters had just been convicted of running a $3.65 billion fraud, which landed him a 50-year sentence. And in New York, the Bernie Madoff case was coming to a head. Both were Ponzi schemes. To the public, and perhaps even to prosecutors, Hecker's over-leveraged business looked like just one more in a string of collapsed Ponzi schemes.
"We never really explained that we had business issues," Hecker said. "And then some of the problems were mine; I just made bad choices, bad decisions, and at the time, I had no direction other than using your own intuition, [trying to] get through this day or whatever. So I made short-term decisions that were bad long-term results."
His situation continued to deteriorate until, Hecker says, he was advised by counsel to file for personal bankruptcy, which he did in June 2009. That was supposed to make his problems with Chrysler go away, he says. Only they did not.
"Nobody explained to me that, by personal bankruptcy, it gave them the keys to the safe for everything I have," he said. "So within five days of filing bankruptcy, they did a federal raid of my home and businesses. And from there on, I was stripped day by day of pretty much everything I had for even normal living."
In 2009 and 2010, amid the worst economic conditions since the 1930s, Hecker's years of ostentatious, profligate spending didn't win him sympathy in the court of public opinion. Every turn of his case played on local TV and in the papers.
His personal possessions were auctioned off — his watches alone brought $294,500 — to settle massive debts. His credibility lay in tatters. His former business associates were dragged in to see whether they had participated. Ex-wives also were embroiled in legal controversies, and a former in-law who allegedly had helped him hide funds died by suicide.
Federal authorities initially charged Hecker with 25 felonies in February and March 2010 that threatened to put him away for life. As the trial date neared, Hecker agreed to plead guilty to two felonies and admitted to the circumstances surrounding the others. Under a plea agreement, he was sentenced in 2011 to 10 years in federal prison.
During the seven years he served, Hecker was transferred frequently between penitentiaries. He kept a low profile and made few friends with fellow inmates. He taught business classes.
"You just learned to accept some of the things," he said. "We watched people get murdered, suicides, heart attacks. ... It was a way of life that, things just happened and that's the way they went."
But life behind bars made him a better person, Hecker says.
"It was a life-changing experience, one that I never planned on," he said. "It's a chapter in my life that I will never forget. But it helped me a lot."
For one thing, he interacted with people a lot closer on the socioeconomic scale to his own roots, a world away from his life as a high-flying CEO who owned a life-size statue of Elvis and had eight cars in the garage.
But there were costs. Hecker's daughter with his fourth wife was 8 years old when he was locked up. She's now 16. His son, who had been 15 when he entered prison, developed a "chemical problem" while he was away, and Hecker was powerless to help. Even though he is now free to see them each night, the pain of what he missed in their lives draws a tear.
Yet, prison reset his life.
"I'm blessed. I mean I've been really given the opportunity to re-emerge as a better person, smarter," he said, "and didn't really lose some of the skills I had before. Today, I have no drama in my life; I have nobody breathing down my neck, [asking] 'What's going to happen next?' "
Since his release to the halfway house, Hecker says, he has found joy and contentment in simple freedom; in doing things his pre-prison self never would have considered. He has bought secondhand shirts and loved the experience. He enjoys going to Costco.
"Right now, my life would be happy just playing golf, and doing some speaking engagements, skiing once in a while, enjoying the day and taking care of myself physically and mentally," Hecker said. He planned to play his first round of golf since his arrest this last weekend.
"So the roller coaster? I mean, it's kind of like I'm beyond the need for the rush and just enjoy the ride."