Former MLB Star Lenny Dykstra Charged in Bankruptcy Fraud Case That Alleges Sale of Items from Mansion

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Former MLB Star Lenny Dykstra Charged in Bankruptcy Fraud Case That Alleges Sale of Items from Mansion

LOS ANGELES-Lenny Dykstra, who played outfield for the New York Mets and Philadelphia Phillies baseball clubs and later gained notoriety as a stock picker, has been charged with bankruptcy fraud for allegedly selling items from his $18 million mansion in Ventura County.

Lenny Kyle Dykstra, 48, who is currently residing in Encino, was named in a one-count criminal complaint filed Wednesday that accuses Dykstra of one count of embezzling from a bankruptcy estate.

The federal criminal case against Dykstra was announced today after he was taken into custody last night at his residence by local authorities on unrelated charges.

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.

A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.

The charge of bankruptcy fraud carries a statutory maximum sentence of five years in federal prison.

Dykstra's bankruptcy case is still pending in United States Bankruptcy Court in Woodland Hills.

The investigation in the bankruptcy fraud case was conducted by the Federal Bureau of Investigation and IRS - Criminal Investigation. The United States Trustee for the Central District of California (Region 16) provided substantial assistance during the investigation.

CONTACT:
Assistant United States Attorney Evan Davis
Major Frauds Section
(213) 894-4850

Assistant United States Attorney Aaron May
Major Frauds Section
(213) 894-0363

Courtesy Federal Bureau of Investigation

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David Saks



Time&Temp Memphis

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Rainmaker
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Mel Ahrens, MBA, Kelly Right Real Estate
Kelly Right Real Estate - Hood River, OR
Customized Choices for your Real Estate Needs

His "Nails" personsa is not serving him well.  He has certainly fallen on hard times, from his own poor choices if you believe the media accounts.

Mel

Apr 15, 2011 01:13 PM #1
Rainer
1,756,848
Conrad Allen
Re/Max Professional Associates - Webster, MA
Webster, Ma, Realtor

Hi David - Desperate people do desperate and stupid things.  I guess poor money management led to these problems.

Apr 15, 2011 01:13 PM #2
Rainmaker
637,272
Maria Morton
Chartwell Kansas City Realty - Kansas City, MO
Kansas City Real Estate 816-560-3758

It might have been better for him to have sold some items and established a primary residence which he could afford prior to filing for bankruptcy. People under stress often behave without thinking. I'm sorry that he had no one to help him find a better way.

Apr 15, 2011 01:22 PM #3
Rainmaker
2,758,832
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

David - Sometimes, people under financial distress can not think accurately to handle personal finance.

Apr 15, 2011 05:01 PM #4
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