Former baseball player sentenced for bankruptcy fraud

Many of our Atlanta bankruptcy blog readers have probably heard the sad story of Lenny Dykstra, the World Series winning-baseball player that recently came into trouble with the law as a result of his alcohol and drug addiction and money troubles. Now, Dykstra has been sentenced to more than six months in prison for allegedly committing bankruptcy fraud. That sentence will be added to the nearly four-year sentence that has already been handed down for theft, assault and other criminal offenses.

Dykstra filed for Chapter 11 bankruptcy in 2009. Later that year, his case was converted to Chapter 7 liquidation. In his bankruptcy filing, Dykstra stated that he had nearly $40 million in debt from business deals gone wrong and personal financial issues.

Soon after his bankruptcy filing, Dykstra allegedly removed fixtures such as a stove and a granite sink from his mansion and sold them for a fraction of their worth. He was also accused of concealing or selling personal items and sports memorabilia that prosecutors say should have been included in his bankruptcy estate.

Earlier this year, Dykstra pleaded guilty to bankruptcy fraud, as well as the related federal charges of concealment of bankruptcy property and money laundering. In court, Dykstra’s criminal defense attorney told the judge that her client had become addicted to alcohol and drugs in recent years, and that his addiction was responsible for his string of criminal offenses.

Perhaps as a result of that testimony, the judge overseeing the cases issued a sentence at the low end of the prosecutors’ request, ordering Dykstra to serve six and one-half months in prison, in addition to the three years and nine months he is already serving for other criminal charges.

Source: Bloomberg Businessweek, “Ex-Met Lenny Dykstra Gets 6 1/2-Month Prison Sentence for Fraud,” Edvard Petterson, Dec. 4, 2012