All-Star Baseball Player Charged with Bankruptcy Fraud
Lenny Dykstra, major league All-Star outfielder, was recently charged with bankruptcy fraud. The former Philly reportedly sold or hid hundreds of thousands of dollars worth of assets from an estate that was listed in his 2009 bankruptcy case.
Online, May 24, 2011 (Newswire.com) - Filing for bankruptcy is a very serious thing, and for those that don't take it seriously, even those in the public eye, the consequences can be very real. Recently, Lenny Dykstra, a three-time MLB All-Star outfielder who played for the Mets, Red Sox, and Phillies from 1985 to 1993, and now resides in Los Angeles, California has been charged with bankruptcy fraud, after an attorney hired by the trustee of his bankruptcy investigated his two Los Angeles homes.
Following his baseball career, Dykstra moved out to California and opened up a successful luxury car wash, and then began delving into financial advising, where he proceeded to do well until the housing market crashed and he, like millions of others, was helpless as his fortune disappeared out from under him.
As part of the terms of the bankruptcy, his $18.5 million Ventura County home, previously owned by Wayne Gretzky, and his $5.4 million Westlake Village home, along with his corresponding estate, were listed as assets. As the bankruptcy noted, Dykstra was prohibited from selling, destroying, or removing any part of the estate while he was in the process of repaying his creditors for his listed $24.6 million in assets and $37.1 million in debt. When he was arrested, police said that it was due to suspect fraudulent auto purchases.
When questioned in court, Dykstra admitted to selling sports memorabilia and furniture from the estate, and was also accused of removing a $50,000 custom sink, and selling it, along with other fixtures at a Los Angeles pawn shop.
When the trustee's attorney reported their findings, Dykstra was taken into custody for seven days and appeared before a judge on April 20th, where he was released on a $150,000 bond. He was ordered to surrender his passport and instructed to take part in an outpatient substance abuse program.
Dykstra's attorney, Mark Werksman called the ordeal a part of a vendetta by former caretakers and "a scorched-earth bankruptcy proceeding."
Bankruptcy is designed to help individuals find a way out of financial turmoil, but in cases like this, where individuals take advantage of the system, it does nothing but hurt them further, and instills unjust fear in the system. Often times, bankruptcy proceedings are simple and relatively painless, even when large estates are involved, but the larger the estate, the more red tape is attached to the proceedings.
Having an experienced bankruptcy attorney on your side can be a great asset and help make the process as smooth as possible, but while under the umbrella of bankruptcy, it is very important to remember that your assets are under a watchful eye, and it is wise to keep a low profile while you are getting your life back in order to avoid undue investigations into your affairs.