A federal grand jury has been convened in Minneapolis to consider whether bankrupt Minnesota dealer and auto entrepreneur Denny Hecker should face criminal charges.
Jeanne Cooney, a spokeswoman for the U.S. attorney's office in Minneapolis, would not confirm or deny the existence of the grand jury. But a person familiar with the investigation says the panel exists.
The source says the grand jury is looking into several allegations, primarily those in a lawsuit brought by Chrysler Financial in July. The lender accuses Hecker, 57, of fraud, forgery and embezzlement.
In the lawsuit, Chrysler Financial alleged that Hecker obtained a $65 million loan from the finance company in 2007 by presenting a forged document from Hyundai Motor America. Hyundai refuses to comment.
Chrysler Financial also alleges that starting in the fall of 2008, Hecker embezzled $67.9 million by selling vehicles financed by the lender without paying Chrysler Financial when the vehicles were sold.
The source also says U.S. attorneys are looking at a 2003 deal in which Hecker bought 1,100 daily rental program cars from Mitsubishi worth $8,000 to $17,800 apiece for just $1,216 per vehicle in paperwork fees, plus $15.8 million in advertising credits. Mitsubishi sources have said the credits were virtually worthless.
"We're looking at pretty much everything," the source says.
Hecker has also been sued by Ford Motor Co., Hyundai and several banks and individuals.
Hecker attorney Bill Mohrman could not be reached.
Chrysler Financial had been Hecker's primary lender for about 20 years, but the captive cut off his credit lines in November 2008. In January 2009, Chrysler Financial sued the dealer for $550 million in unpaid loans.
When the lender eliminated his credit, Hecker had 17 dealerships with multiple franchises in Minnesota and California. He also owned fleet and leasing businesses and Advantage Rent A Car, of San Antonio.
Now, Hecker is out of the auto business. His spokesman, Paul Omodt, confirms that Hecker recently sold his last dealership, a Toyota store in suburban Minneapolis. His fleet and leasing businesses are closed. In April, Hertz purchased those assets in U.S. Bankruptcy Court for $30.3 million.