At a press conference after the court hearing, U.S. prosecutors said that Hecker's attorney came to them on Friday asking to reach a plea deal. They worked out an agreement over the weekend.
“What this says is that the rules apply to everyone,” said Nicole Engisch, the lead prosecutor in the case. “And if you're going to use our bankruptcy system you have to play by the rules.”
Prosecutors had asked last week that Hecker be jailed for failing to abide by the conditions of his release that were set when he was indicted in February.
The deal calls for Hecker, 58, to be on house arrest until after Christmas, when he would report to federal prison, May said. Those details would need to be approved by U.S. District Court Judge Joan Ericksen. A date for his sentencing has not yet been scheduled.
Earlier today, one of his court-appointed lawyers, Barbara May, said, “Denny wants me to say that this is a business deal gone bad,” referring to the charges against him. “He feels bad that it got out of control and the business deal went sour.”
Once the owner of a network of auto dealerships and a large leasing company, Hecker filed for bankruptcy in June 2009, owing $767 million largely due to personal guarantees on business loans. The bankruptcy trustee handling his case quickly uncovered assets that Hecker had not reported.
Hecker chose not to fight those allegations in U.S. Bankruptcy Court and agreed that his debt would not be forgiven. He will be on the hook for any debt that remains after his assets are liquidated, a process that is expected to continue for at least another year.
Indictments handed down
He was indicted in February on criminal charges of wire fraud and conspiracy for allegedly forging documents to get better financing from Chrysler Financial to purchase cars for his leasing company. In March, a grand jury returned a new indictment against him, adding bankruptcy fraud charges and more wire fraud charges.
The former president of Hecker's leasing company, Steven J. Leach, of Burnsville, was also charged with wire fraud and conspiracy. He was scheduled to be tried with Hecker. Today's plea deal does not involve Leach. His attorney, Robert Sicoli, could not immediately be reached for comment.
The bankruptcy fraud charge that Hecker has agreed to plead guilty to alleges he transferred $33,057 by wire into a bank account for an unnamed person, but that Hecker exercised control over the account, and that he transferred $80,000 to the same unnamed person who then arranged to give that money back to Hecker later.
The allegations mirror ones made by bankruptcy trustee Randy Seaver in bankruptcy court filings earlier this year. Those documents indicated the money went to his former father-in-law Bill Prohofsky.
Prohofsky committed suicide in early March, just after the allegations surfaced that Hecker had given him the $80,000 and instructed him to pay some of Hecker's bills in the months after Hecker filed for bankruptcy.