Auto Tycoon Faces Bankruptcy Fraud Charges And Fails To Pay Attorneys

April 26th, 2010 by Reed Allmand

Former auto tycoon Denny Hecker is facing a slew of criminal charges and the possibility of losing his defense attorneys.  Hecker has been charged with 10 counts of bankruptcy fraud, eight counts of wire fraud and one count of money laundering.

The bankruptcy fraud charges accuse Hecker of failing to disclose numerous assets on his bankruptcy filings, and of fraudulently transferring or concealing assets from the court. The allegations echo those made by bankruptcy trustee Randall Seaver in January in a bankruptcy court lawsuit asking that none of Hecker’s debt be discharged.

Hecker filed for bankruptcy June 4, owing $767 million. The judge ruled last month that Hecker is on the hook for $83 million of his debt to Chrysler Financial because he lied to the court and did not obey court orders in the discovery process.

As if his bankruptcy fraud charges and other criminal charges were not enough, Hecker has also failed to pay his defense attorneys who are now requesting that they be allowed to step out of the case. Halberg and Bill Mauzy, both defense attorneys for Hecker, filed motions last week asking to withdraw from the criminal case.  The court filing indicated that while Hecker had several months to pay the attorneys’ retainer fee, Hecker has not able to do so “in large part to the unexpected, and indeed cataclysmic, impact of an $83 million non-dischargeable judgment against him in bankruptcy court.”

The Hecker case is another very public example of how bankruptcy fraud can not only destroy a debtor’s bankruptcy case; but rob them of their assets and freedom.  Hiding assets or attempting to manipulate the bankruptcy system is a lose-lose proposition.  Remember, working with a competent bankruptcy attorney you can protect most or all of your assets during bankruptcy.