Former New York Mets star Lenny Dykstra filed bankruptcy in July 2009 after not being able to pay back loans totaling more than $20 million. Recently Dykstra was charged with grand theft and bankruptcy fraud.
According to a statement by prosecutors, Dykstra, a former baseball outfielder, was taken into custody at his Encino home. The charge related to fraud Dykstra allegedly committed during bankruptcy proceedings. According to a news article, he allegedly sold items from a Ventura County mansion he owned: “The federal charges stem from a bankruptcy case that Dykstra filed on July 7, 2009.” A criminal case filed in U.S. District Court alleged Dykstra removed, destroyed and sold property that was part of the bankruptcy estate without the permission of the bankruptcy trustee.
According to prosecutors, “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.” He was arrested by the Forgery Section of the Los Angeles Police Department Commercial Crimes Division.
Filing bankruptcy could have been his way out of financial trouble if he had a good bankruptcy attorney by his side who would have advised him not to sell assets without the permission of a bankruptcy trustee while a bankruptcy case was pending.
People may grow attached to their material items, but in bankruptcy, a person’s assets are no longer his/her own. When unpaid bills pile up on the kitchen counter and debt seems insurmountable, filing for Chapter 7 or Chapter 13 bankruptcy can be the solution. However, be aware that everything a person does with assets is publicly watched.
In May 2011, Dykstra was sentenced to house arrest after the fraud indictment. Under the plea agreement, Dykstra was allowed to leave the house for work, going to church, and mandatory drug-testing. Following a June 10, 2011 hearing for drug possession and grand theft auto, Dykstra was in jail due an inability to post the $500,000 bail. On October 19, 2011 Dykstra pleaded no contest to three grand theft auto charges and one count of filing a false financial report. He awaits sentencing on January 20, 2012
Contact an experienced New York bankruptcy attorney for counseling on bankruptcy proceedings.