Jailed Denny Hecker could be moved to a halfway house as early as next week

Imprisoned Minnesota auto mogul Denny Hecker could be released to a residential halfway house as early as July 4, but a friend said Hecker believes the actual date will be in October.

The colorful Hecker — who once was a household name in the Twin Cities, starring in commercials for his many dealerships — is serving a 10-year sentence in Illinois for defrauding auto lenders and the U.S. Bankruptcy Court.

His official release date from prison is July 4, 2018. However, federal rules state that some prisoners may be released to a residential re-entry center (RRC) — or halfway house — 12 months before their formal release date.

"But this possibility does not mean an inmate definitely will be placed in an RRC," said Justin Long, spokesman for the Federal Bureau of Prisons in an e-mail. "Inmates who are not placed in an RRC or home confinement [will be released] from a correctional institution on their release date."

Hecker, 65, is currently in the Federal Correctional Institution in Pekin, Ill.

Long declined to discuss Hecker's case, leaving unclear how Hecker's release will be handled.

Hecker's onetime boss and longtime friend, Ralph Thomas, 74, said he spoke to Hecker by phone Monday.

"He doesn't know anything" about a July date, Thomas said. "The first date he knows about is Oct. 7. He said that is what he was told. He is headed back to Minneapolis, and he is going into a halfway house on Oct. 7."

Thomas said Hecker is in good spirits.

"He had the best attitude of anybody you met in your life," he said. "After sitting there for eight years, you would think that he would be depressed. But he's not. He's good."

Hecker was a self-made and larger-than-life salesman who grew used to lavish living.

Starting in the 1970s, the Minneapolis high school graduate started selling cars in Roseville. Over decades, he built a $6.8 billion auto empire that included 26 dealerships, fleet-leasing operations and the national Advantage Rent A Car chain.

Statewide, Hecker was well-known as a boastful, competitive dealmaker with a habit of generous gifts and hyper-promotion. Hecker did his own TV and radio commercials and plastered his face and auto ads on hundreds of metro buses and billboards across the Twin Cities.

Hecker was convicted of forging loan documents that netted $80 million and failing to report money and assets to the bankruptcy court. After he was imprisoned in 2010, his cars, houses and property were seized and sold.

"Denny has no money. He's broke," Thomas said.

Hecker started his prison term in Duluth. But he broke the rules inside prison, including abusing phone privileges, former Hecker attorneys have said. Although prison officials would not comment on any of the transfers, he was moved to nine prisons in five years after the infractions.

Hecker's last prison transfer was in November 2015. In March 2016, the bureau reduced Hecker's prison term by one year, saying he would be released in 2018, instead of 2019. Long, the spokesman, declined to say why the sentence changed.

William Mauzy, Hecker's attorney, did not return calls for comment.

But Hecker's former attorney, Brian Toder, said the sentence may have been shortened because Hecker voluntarily completed an intensive 500-hour Residential Drug Abuse Program (RDAP) for inmates. Hecker previously testified in court that he had a problem with alcohol.

"If you take that RDAP program, you can get up to a year off of your sentence," Toder said. You can get additional time off for being a nonviolent offender, he added.

Inmates released to re-entry centers are supervised, receive employment and financial counseling, and are allowed to leave the premises only for work, according to prison rules.

Asked about employment opportunities, Toder said he doesn't expect Hecker will have difficulty landing a job.

"There are a lot of people who may not want to buy a used car from Denny, but there are a lot of dealers who would pay good money for him to act as a consultant because Denny really knew the ins and outs of selling. I have a lot of confidence that Denny will do well when he gets out," Toder said, while acknowledging that Hecker would largely be starting over again.

In addition to having his assets confiscated and sold, Hecker's bankruptcy petition was rejected by the court. That means he still has about $100 million in debt. The amount he owes is what is left following the forced liquidation of Hecker's Medina home and his Crosslake vacation house, plus dealerships and other residential and commercial properties around the country, according to bankruptcy court records.

Hecker's vast auto dealings took decades to build but unwound with the Great Recession. That's when lenders of Hecker Automotive froze credit, applied stricter underwriting rules and ultimately demanded that business loans be immediately repaid in full. Hecker filed for bankruptcy in June 2009, reporting $767 million of debt and $18.5 million in assets.

The bankruptcy trustee, however, soon found evidence that Hecker was dining at fancy restaurants, getting pool service and illegally tapping into secret insurance funds, loaded cash cards and bank loans that were not reported to the bankruptcy court. Auto lenders such as Chrysler Financial, Ford Motor and U.S. Bank sued Hecker for fraud or defaulting on loans.

Hecker pleaded guilty in September 2010 to two counts of fraud and conspiracy for hiding assets from the bankruptcy court and for altering auto-loan documents in 2007 and 2008. The schemes ultimately defrauded Chrysler Financial and other lenders of more than $80 million in loans and $13 million in losses.

Dee DePass • 612-673-7725