Feature
DENNY HECKER
144
Artful Living
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Magazine of the North
Until 2008, Twin Cities mogul Tom Petters enjoyed the fruits of operating the third largest fraudulent hedge fund in the country’s history. Court documents put his 2007 worth at $1 billion. He owned luxury cars, yachts and three mansions in three states (including one in Wayzata worth $5.3 million). His esteemed Petters Group Worldwide had thousands of employees and owned 100-plus businesses, including Fingerhut, Polaroid and Sun Country Airlines. Petters was hailed a business genius, a symbol to all that a middle child of seven growing up in St. Cloud could reach the brass ring. He even propounded a long list of inspirational quotes, including “If a window of opportunity occurs, don’t pull down the shade.” But the shade came down abruptly following the defection of insider Deanna Coleman, Petter’s vice president of operations (and, briefly, his lover). A couple other execs agreed to cooperate with an investigation that involved Coleman wearing a wire while Petters talked of felonious activities. It soon came to light that, in true Ponzi fashion, as more lenders gave him money, he’d pay off earlier loans or roll them into new ones while carving out millions for himself and his coconspirators, including Coleman. Indicted in December 2008, Petters was ultimately found guilty of orchestrating a $3.65-billion Ponzi scheme. The charges included mail and wire fraud as well as conspiracy to commit money laundering. In April 2010, he was sentenced to 50 years in prison, the longest term ever ordered in a financial-fraud case in Minnesota history. Petters maintains his innocence to this day and continues to file petitions — thus far unsuccessfully — for a new trial and new judge. One of his inspirational quotes has the ring of irony: “There is no such thing,” he once wrote, “as a minor lapse of integrity.”
PHOTOGRAPHY PROVIDED BY SHERBURNE COUNTY JAIL AND J. VESPA/WIREIMAGE FOR FINGERPRINT COMMUNICATIONS
Once upon a time, Denny Hecker was a successful car dealer in the Twin Cities. In the nineties, he collected expensive watches, jetted around the country on a private plane, and owned vacation homes in Colorado, Minnesota and Mexico. But in 2008, things started to go south when authorities received complaints that his dealerships hadn’t been paying tax, title and licensing fees. An investigation soon unearthed larger scams. Beginning three years earlier, he and a couple associates had begun altering documents that defrauded commercial lenders out of tens of millions of dollars. By the end of 2009, the hole Hecker had dug himself was $767 million deep. He filed for bankruptcy, figuring if he could get that “gorilla,” as he put it, off his back, he could still live comfortably on $1 million a year in consulting fees and the sale of some of his businesses. But federal prosecutors had other ideas. In 2010, Hecker was charged with conspiracy to commit wire and bankruptcy fraud, earning the latter charge when he tried to conceal assets by transferring more than $110,000 to a friend who had instructions to hold it for him. Hecker eventually reached a plea deal, and in February 2011, he was ordered to pay $31 million in restitution and to serve 10 years in prison. At his sentencing, U.S. District Court Judge Joan Ericksen said, “The actions you’ve taken are not consistent with someone who can be trusted, and you have not been as truthful as you could have been in the court system. Therefore, you do not get a break. You’re going to get the full 10 years, which is appropriate and necessary. Behaving like a scoundrel is not tolerated in the court system.” For his part, Hecker maintained his innocence, blaming his problems on deals gone bad, an ill-advised bankruptcy and the poor advice of the people on whom he relied. His release date is slated for 2018, when he’ll be 66.
TOM PETTERS