Hecker Hits the Road - Again

Denny Hecker was a Twin Cities car dealer who lived too high, lied too much, and got over-extended. His various enterprises came crashing down around him during Great Recession. It was a perfect storm of self-imposed calamity, compounded by the bad economy.

The perfect storm included bankruptcy and criminal fraud charges, as well as a drunken driving arrest. To engage in a rather bad pun, the wheels fell off for the former auto magnate who once tried to buy the Minnesota Vikings.

And yet even as his businesses ran on fumes and finally expired, Hecker kept digging himself into a bigger hole. This self-sabotage included attempts by Hecker and his newest girlfriend / wife to mislead the bankruptcy court about the extent of Hecker’s assets.

Prison usually provides a reality check for people as self-indulgently willful as Denny Hecker. And that is indeed happening. This week the Star Tribune reported on the dose of “diesel therapy” Hecker is receiving, courtesy of the U.S. Bureau of Prisons.

The bureau is relocating Hecker to a different prison, this time in Pennsylvania. It’s the fourth time Hecker has been moved since he started serving his 10-year sentence in February.

Outside the walls, Hecker broke rules with impunity. The consequences come quicker, it seems, for rule violations inside, such as disregarding limits on phone calls.

Minnesota: Land of 10,000 Ponzi Schemes?

For years, Minnesota styled itself as the Land of 10,000 Lakes. Not surprisingly, there were numerous humorous variations, such as Land of 10,000 Potholes or 10,000 Mosquitoes. But there really are a multitidue of lakes, and the slogan still signifies the abundance of water in this state.

Do we also have an abundance of financial crime? Eric Wieffering, an astute financial columnist for the Star Tribune, wrote a piece last month exploring the notion that Minnesota has become the Land of 10,000 Ponzi Schemes.

The names that came up, as Wieffering briefly summarized a dozen or so high-profile cases, started of course with Tom Petters and Denny Hecker, both of whom are now serving lengthy prison terms. But the list also includes Trevor Cook, Charles E. Hays, Kalin Dao and many others.

Is there really more fraud in Minnesota than elsewhere in the country, or does it just seem that way? Hank Shea, who led the U.S. attorney’s financial crime unit for many years, thinks not. In his view, the level of fraud in Minnesota doesn’t differ markedly from mo0st other places.

In fact, Wieffering concludes, our relatively clean image is what led out-of-state interests to set up companies called St, Paul Venture Fund, Minnesota Venture Capital, Inc., and Real Estate of Minnesota, Inc. Those companies are now facing civil charges brought by federal securities regulators. But the companies have to do with Minnesota in name only.

Socrates, Martha Stewart, and the Definiton of Right Conduct

Plato composed The Republic nearly 2500 years ago. Yet the questions about right conduct that it raises are as timely as today's headlines and Twitter feeds.

In the first section of the dialog, Socrates takes aim at the ethical inadequacy of conventional views of justice. The first of these to be explored is the notion that justice consists in telling the truth and paying one's debts.

Socrates finds much lacking in this view. But even the minimal conception of justice it expresses is at odds with major trends in an American landscape littered with failed Ponzi schemes and a compendium of ethical lapses.

To catalog the scope of the contemporary problem, financial journalist James Stewart has published a book called Tangled Webs: How False Statements Are Undermining America: From Martha Stewart to Bernie Madoff.

Socrates, one suspects, might have found a way to talk Martha Stewart out of her plans for insider trading. He would surely have also been impervious to the pecuniary lures of Madoff's investment fraud.

Counting the Beans While Rome Burns

For tweve years, dating back to 1997, the Secuties and Exchange Commission strongly suspected that a billionare businssman named R. Allen Stanford was operating a Ponzi scheme. But the SEC did not bring fraud charges until February 2009,

How could this be?

In April 2010, the inspector general of the SEC attempted an answer. It was not due to "any improper professional, social or financial relationship on the part of any former or current SEC employee," according to the IG's report. This finding came despite evidence that a SEC enforcement official who helped block full-scale investigations of Stanford's activites later served as his legal counsel.

The inspector general did find, however, that "institutional influence" was a factor in the repeated decisions not to investigate Stanford more thoroughly. "Institutional influence" is the IG's shorthand phrase for a stats-obessed metrics mentality that prevailed within the Forth Worth office of the SEC for over a decade. Senior agency officials believed they were being judged by their managers on the sheer number of cases they brought, and therefore discouraged the enforcement staff from pursuing challenging cases. Stanford's case wasn't a "quick hit," so time after time it got shelved - until the changing of the guards to the Obama administration.

I'm not surprised to learn of utter imcompetence bordering on malfeasance during the George W. Bush years. What I'm struck by, rather, is that the inaction in the face of ongoing fraud began during the Clinton era. How does one account for this?

Jason Linkins has very good blow-by-blow account in The Huffington Post.

In terms of the underlying ideology, it surely has something to do with the often-toxic tide of Reaganism that continues to wash through American public life. If government is supposed to be the problem, not the solution, then one option is to "starve the best" - keep cutting the funding, yet still somehow expect the same services.

Having worked in state government in the late 90s and early 2000s, I remember quite well the building pressure to do more with less. Al Gore himself presided over the Reinventing Government initiative that was so popular back then. Small wonder, then, that major balls got dropped while bureaucratic managers counted the beans.

Denny Hecker Goes to Jail

Denny Hecker, the former Twin Cities auto mogul, is experiencing a perfect storm of legal needs. His businesses fell apart in the wake of the Great Recession, amid allegations of fraud concerning his dealings with lenders. His personal finances went Way South - resulting in bankrupcy proceedings. And his marital money matters took on the trappings of farce; last week, he faced lawsuits by his second ex-wife, for nonpayment of alimony, and soon-to-be ex-wife number four, for withholding key information and hiding assets.

Groucho Marx, Rodney Dangerfield, or any comedian worth his or her salt, take it away.

It's hard to find much empathy for someone who lived the high life for so long, and seems so unwilling to take responsibility for his actions. So it was perfectly understandable when Judge Jay Quam decided to give Hecker a taste of jail, to remind him of the importance of candor before the tribunal.

Four days in the Hennepin County workhouse left Hecker gasping for air. Sentenced to 90 days for civil contempt, after failing to comply with numerous court orders, Hecker was released after only 72 hours. The experience of jail for that long, he told the judge, was something "one would not want to experience in a lifetime."

If I were Judge Quam, I might recommend to Denny Hecker that he read Ted Conover's book Newjack, about working as a guard at Sing Sing prison in New York State. Connover recounts how, in the original prison building - built in 1826 by inmate labor and used until 1943 - two prisoners shared a 3 1/2 by 7-foot cell, at first with no central heating, open sewer channels, and little light.

Might Denny, by that standard, be a little pampered?

Precious

Imagine growing up in a living hell of abuse and victimization. Raped repeatedly by your father, resulting in two incestuous children. Verbally abused and physically assaulted by your mother, practically 24/7.

You live in poverty, an African American on welfare in Harlem in the 1980s. Because of the violence and neglect in your home, you are practically illiterate, and are also morbidly obese. When you find out you’re pregnant for a second time by your father, there are times you wish you were dead.

But somehow, deep within you, there is a deep capacity for survival and perseverance. You find a caring mentor, who helps you begin to build a new life, beyond abuse and degradation.

This is the story told in “Precious,” a film based on the novel “Push.”



I saw the film yesterday and was very much moved.

A Fugitive's Facebook Friending Folly

In Italy, it was the Facebook burglar - caught after accessing his profile from the computer of the house he was burglarizing.

In Cancun, it was the Facebook absconder - who met a similar fate: arrest.

Maxi Sopo is a 26-year-old man who came to the United States in 2003 from Cameroon. Settling in the Seattle area, he supported himself by selling roses in nightclubs.

Think about that occupation for a moment. Selling roses in nighclubs, presumably to couples immersed in romance. It was as if the Greek god Hermes were his patron saint.

The American dream, however, tends to want more and more. Mr. Sopo apparently moved on to bank fraud. According to federal prosecutors, he and an acquaintance falsely procured over $200,000 in loans from Seattle-area banks and credit unions. The AP account I read did not state exactly what the pitch was, but clearly Sopo was, as they say, "living the dream."

Unfortunately for Sopo, there's no free lunch, even in America. The U.S. attorney's office began investigating him, and he decided to head for Mexico in a rental car.

Did he choose to lie low, as any pragmatic, old-style fugitive would have done? No, he put up Facebook posts about his high life partying in Cancun - then "friended" a former Justice Department official.

The Secret Service contacted the "friend," pinpointed Sopo's whereabouts, and arrested him. When the AP picked up his story, he was in a Mexican jail, awaiting extradition to the U.S.

What was he thinking, when he logged in to Facebook?

A Legacy of Shame

Sticking a psychological label on someone based merely on media accounts is a dubious way of trying to get at the truth. This is the case even if the label is being pinned on the notorious and virulently vilified Bernard Madoff.

Madoff is the former investment guru who defrauded investors out of upwards of $50 billion in a decades-long ponzi scheme that collapsed in December. New York Magazine dubbed him “the monster mensch,” with a cover depicting him as a tricked-up Mephistopheles. Many victims lost their life savings and numerous charities were forced to shut down. At first, Madoff was allowed to remain on house arrest, but eventually he was jailed, and yesterday a federal judge sentenced him to 150 years in prison.

Last week, I attended an online CLE on civil commitment of the mentally ill in which one of presenters, a board-certified psychologist named Samuel Myers, glibly suggested that Madoff illustrated antisocial personality disorder. Dr. Myers was trying to show how the categories in the DSM-IV, the diagnostic and statistical manual used by mental health professionals, can help predict the level of someone’s risk of causing harm to self or others. Though he cautioned that the DSM-IV categories must be combined with clinical judgment, that didn’t stop him from tossing around the names of celebrities to illustrate various disorders, such as

● Winston Churchill for bipolar disorder
● Princess Diana for borderline personality
● General Patton for narcissism
● Bernard Madoff for antisocial personality

I can see how examples like these can be useful teaching tools, yet they can also easily give rise to red herrings. Bernard Madoff, for example, certainly was a con man and a pathological liar, looking people in the eye while robbing them blind. But if Madoff stands for antisocial personality disorder, how does one account for the fact that he confessed to his two sons (who eventually turned him in to prosecutors)?

Could the concept of “shame” shed some light on Madoff’s behavior? Surely it is suggestive that shame was a word Madoff used himself. In his remarks at sentencing, he spoke of the legacy of shame he had left to his family. Of course, as a confirmed liar, Madoff’s concern about shame might have been a sham — but who, ultimately, can know the human heart? My point is to beware not only of lies and the lying liars who tell them, but of glib labels that obscure thought, even if those labels come from the DSM-IV.

Trespass and the Homeless

Trespass is a venerable legal term, one of the building blocks of the common law. The definitions in Black’s Law Dictionary of the various types go on and on for pages, hinting at archaic hair-splitting now largely lost to time. Trespass on the case, trespass to chattels, and so on — with criminal trespass only one, comparatively compact, meaning among many.

Today, in America, it is the criminal meaning that prevails. Going on someone else’s property without permission is against the law and can be prosecuted as a criminal offense. In our mind’s eye, many of us still see the context for such an offense as, say, a hunter ignoring a “no trespassing” sign in order to hunt for deer or other game on private land.

Tonight’s PBS report from Miami on homeless people taking up residence in foreclosed homes showed the old concept of trespass bumping up against our complex contemporary reality. The NOW program followed Max Rameau, a community activist whose organization, Take Back the Land, seeks to match responsible homeless families (not by any means an oxymoron) with empty homes that are still livable.

This used to be called “squatting,” and it is still against the law. Rambeau’s response is that it is immoral to leave people on the street when society has failed to build enough affordable housing and the Great Recession relentlessly adds to the ranks of the homeless. Nationally, depending on how homelessness is measured, those numbers are expected to rise from roughly 3 million to roughly 4 million people who will be homeless at one time or another this year. How many of us would have thought, as recently as two years ago, that tent cities would spring up in America?

There is also a very particular back story in South Florida. In 2006, the Miami Herald broke the story about rampant fraud in the Miami-Dade public housing agency. The paper won a Pulitzer Prize for revealing that Oscar Rivero, a developer who had taken over $700,000 in public money to build 54 affordable housing units, had actually spent the money on a house for himself, complete with appliances, pool, and of course thorough termite inspection. The Herald’s investigation revealed numerous other instances of fraud in the agency — so many, indeed, that the federal Housing and Urban Development agency took control of it.

For me, this background complicates the moral calculus of whether the civil disobedience Rambeau’s group is engaging in is justified. Does it promote a culture of lawlessness that will further undermine neighborhoods, contributing to more crime and homelessness? In other words, is Rambeau an urban Rambo, taking the law into his own ends in a reckless manner, like Sylvester Stallone’s movie character?

Perhaps it would help to get down to cases. The NOW program highlighted a story about a single mother trying to get a Ph. D. while working a cleaning job. She moved into a foreclosed house with her children, only to return one day to find their belongings strewn about the property. After Rambeau organized a media event to confront the property management company, the woman and her family ended up staying for a few more months in the house. What difficult judgment calls situations like this must be for law enforcement and prosecutors, having to decide whether to use their discretion to seek trespassing charges against people looking for nothing more than a roof over their heads.