Blog Entry

Dykstra arrested on charges of bankruptcy fraud

Posted on: April 15, 2011 4:23 pm
Edited on: April 15, 2011 5:10 pm
 
By Matt Snyder

Former Mets and Phillies star Lenny Dykstra was arrested Thursday night at his home in Encino, Calif. He has been charged by U.S. prosecutors with bankruptcy fraud, which is embezzling from a bankruptcy estate. If convicted, he'd face a sentence of five years, maximum, in federal prison.

He was actually arrested on a separate investigation -- for grand theft -- and remains jailed without bail. It is still unknown whether or not he's hired legal representation.

Dykstra, 48, was initially a very successful businessman upon retiring from baseball, notably in the stock market on Wall Street. Obviously, things have significantly changed in the past two to three years. Upon filing for bankruptcy in 2009, Dykstra said he owed over $31 million but only had about $50,000 in assets.

A statement from the prosecutor's office was issued via press release and added the following:
The federal charges stem from a bankruptcy case that Dykstra filed on July 7, 2009. The criminal case filed in United States District Court alleges that Dykstra removed, destroyed and sold property that was part of the bankruptcy estate without the permission of the bankruptcy trustee.

According to court documents, after Dykstra filed for bankruptcy, he sold many items belonging to the bankruptcy estate for cash, as well as destroying and hiding other items. An attorney hired by the bankruptcy trustee estimates that Dykstra stole and destroyed more than $400,000 worth of property in the estate, according to the criminal complaint.

When Dykstra filed for bankruptcy, he listed two residences – a mansion in Lake Sherwood Estates purchased from Janet and Wayne Gretzky that he estimated was worth $18.5 million, and a home in Westlake Village that he estimated was worth $5.4 million. As a result of the bankruptcy filing, the residences and Dykstra’s personal property became part of the bankruptcy estate that would be used to pay off creditors. Even though Dykstra was prohibited from liquidating any part of the estate, the investigation showed that:

About a month after filing for bankruptcy, Dykstra was paid cash at a Los Angeles consignment store for personal items, including a truckload of furnishings and fixtures that he had taken from the Lake Sherwood mansion; Dykstra admitted in a bankruptcy hearing to having arranged the sale of sports memorabilia and a dresser that were property of the bankruptcy estate; and Dykstra “ripped out” a $50,000 sink from his mansion and took granite from the mansion and installed it in an office he set up at the Camarillo airport after he had filed for bankruptcy protection.
Dykstra played 12 seasons in the majors, split between the Phillies and Mets. He was a three-time All-Star and finished second in MVP voting in 1993 -- he hit .305 with a .420 on-base percentage and scored 143 runs. He was 30, but unfortunately that was his last fully healthy season, as he only played a combined 186 games over the next three years before retiring.

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Category: MLB
Comments
hotmeuly
Since: Dec 2, 2011
Posted on: December 22, 2011 9:44 pm
This comment has been removed.

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Since: Dec 2, 2011
Posted on: December 10, 2011 8:59 am
 

Dykstra arrested on charges of bankruptcy fraud

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Since: May 2, 2007
Posted on: April 16, 2011 1:47 pm
 

Dykstra arrested on charges of bankruptcy fraud

Sounds all to familiar with other things going on in this country.  Glad he's just one man. 



Since: Aug 22, 2006
Posted on: April 16, 2011 11:00 am
 

Dykstra arrested on charges of bankruptcy fraud

I remember seeing a 60 Minutes story about Dykstra telling all about how he had become a self made multi-millionaire in the stock market after he retired from baseball, despite having no formal education or experience in finance.  He came across as a complete tool who thought he was some kind of financial savant.  The problem was he was doing the same thing everyone else was doing during the bull tech stock market and real estate bubbles of the late 90's and early 2000's.  And when those bubbles popped, so did his whole financial house of cards, like so many others.  Sorry Lenny, guess you weren't the next coming of J.P. Morgan after all.  But don't start breaking laws and stealing from people now that you've figured out you're no financial genius...



Since: Jul 24, 2009
Posted on: April 16, 2011 9:49 am
 

Dykstra arrested on charges of bankruptcy fraud

Why would one expect anything less from Dykstra.  He had no problem cheating while he was a player to earn a buck, so why would he have an issue cheating in real life to earn a buck.  Just another scumbag who deserved to be caught.



Since: Mar 3, 2008
Posted on: April 16, 2011 9:10 am
 

Dykstra arrested on charges of bankruptcy fraud

Last comment was a reply to Lumpoco's question:
Why is Dykstra in trouble for selling items that came from homes that he owns?



Since: Mar 3, 2008
Posted on: April 16, 2011 9:07 am
 

Dykstra arrested on charges of bankruptcy fraud

The reason he's in trouble for "selling items...he owns" is because of federal bankruptcy law. Once you've filed for bankruptcy, you are legally prevented from intentionally reducing the value of your estate. By selling off items, he was generating revenue for his own pocket that he was not reporting to the bankruptcy trustee. This is defrauding your creditors. In addition, the mansions, which apparently were going in to the estate for sale, are now presumably worth less since they've had sinks ripped out, etc. Basically, immediately when you file bankruptcy, you have an affirmative duty by law not to minimize the value of your estate that can be used to pay back your creditors. By filing, then selling a bunch of stuff, he was stealing money that was no longer his, and hiding it from the bankruptcy trustee and creditors. That's bankruptcy fraud, and it's a serious felony.



Since: Jun 26, 2009
Posted on: April 16, 2011 8:49 am
 

Dykstra arrested on charges of bankruptcy fraud




Since: Aug 13, 2009
Posted on: April 16, 2011 8:12 am
 

Dykstra arrested on charges of bankruptcy fraud

Ex-Met?.......  I know he was a Met, but more people recognize him as a Phillie, although he never won a ring there, but came close!  Either way, what  a joke of a situation Lenny put himslef in....people think they are above the law!



Since: Jan 16, 2008
Posted on: April 16, 2011 7:54 am
 

Dykstra arrested on charges of bankruptcy fraud

Just wondering (I'm an Independent), reckon Dykstra was a Republican?

How stupid of a comment is this?


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