Skip to main content

Lenny Dykstra, former MLB All-Star, indicted for bankruptcy fraud

By Michael Martinez and Stan Wilson, CNN
STORY HIGHLIGHTS
  • Lenny Dykstra was a three-time major league All-Star outfielder
  • He played for the New York Mets and Philadelphia Phillies
  • He was indicted on 13 counts relating to bankruptcy fraud
  • He filed for bankruptcy in 2009

Los Angeles (CNN) -- Lenny Dykstra, a three-time major league All-Star outfielder who played for the New York Mets and Philadelphia Phillies, was indicted Friday for bankruptcy fraud for allegedly selling items from his $18 million mansion in Ventura County, a federal prosecutor said.

Lenny Kyle Dykstra, 48, of Murrieta, California, was charged with 13 counts: bankruptcy fraud, obstruction of justice, four counts of concealing property from the bankruptcy estate, three counts of embezzlement from the bankruptcy estate, and four counts of making false declarations to bankruptcy court, according to a statement from spokesman Thom Mrozek of the U.S. Attorney's office in Los Angeles.

Last month, Dykstra was arrested and charged with bankruptcy fraud, and he was released on $150,000 bond and ordered to seek outpatient substance abuse treatment.

The indictment is the result of conduct Dykstra allegedly engaged in after filing a bankruptcy case on July 7, 2009, Mrozek said.

If convicted on all charges, Dkystra could face up to 80 years in prison, Mrozek said.

After filing for bankruptcy protection, Dykstra allegedly "looted" his Sherwood Estates mansion in Thousand Oaks, California, lied about who stripped the mansion, and denied receiving money for having sold items that were owned by the bankruptcy estate, Mrozek said.

According to court documents, an attorney hired by the bankruptcy trustee estimates that Dykstra stole and destroyed more than $400,000 worth of property in the estate.

Among the property that Dykstra allegedly stole were silver- and gold-plated door knobs, gold fixtures, a grandfather clock, two desks, a chair, a Maitland-Smith dresser, chandeliers, electronic equipment, artwork, a stove and a framed piece of sports memorabilia about him, according to the indictment.

The former member of a New York Mets World Series champion team was arrested last month on what police said was suspicion of fraudulent auto purchases.

His attorney, Mark Werksman, characterized the case last month as "a scorched-earth bankruptcy proceeding" and blamed the auto-related accusations as a "vendetta" by former caretakers.

But the U.S. bankruptcy trustee for the central district of California, Peter C. Anderson, described the allegations in Dykstra's case as "egregious."

"The bankruptcy-related conduct charged in the indictment constitutes an egregious abuse of the bankruptcy system and will not be tolerated," Anderson said in a statement.

The 13-count indictment supersedes a criminal complaint filed last month, officials said.

In the bankruptcy filing, Dykstra listed assets of $24.6 million and overall debts of $37.1 million.

Among the assets he listed are two residences: a Ventura County mansion in Lake Sherwood Estates that he purchased from Janet and Wayne Gretzky, which 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, authorities alleged last month that he admitted in a bankruptcy hearing that he arranged the sale of sports memorabilia and furniture that were part of the estate.

Dykstra's professional baseball career began in 1985 when he was drafted by the New York Mets at the age of 22.

A year later, Dykstra hit a lead-off home run in Game 3 of the World Series at Boston's Fenway Park, after the Mets had lost the first two games. That spark rallied the Mets to a seven-game Series victory over the Boston Red Sox.

He was traded in 1989 to Philadelphia, where the rest of his career was marked by successes as well as injuries, brawls and allegations of steroid use that he has denied. He earned the nickname "Nails" for his tenacity and confrontations on the field.

By the time he retired, Dykstra had earned $36.5 million from major league baseball, according to the website baseball-reference.com.

After retirement, Dykstra moved to California and started a profitable luxury car wash that he called The Taj Mahal. He expanded the business throughout Southern California and in 2007 sold it to investors, according to bankruptcy filings.

As a self-taught financial analyst, Dykstra proclaimed himself a financial guru and began writing a stock-picking website column. His prominence soared as a sports celebrity, entrepreneur and popular guest on numerous financial news broadcasts.

In 2008, Dykstra began publishing the Players Club, a glossy financial advice magazine exclusively for pro athletes to help them with wealth management and investment banking.

His purchase of the palatial Gretzy estate in 2007 for $14 million occurred a few months before the mortgage market collapsed. By the time Dykstra filed for bankruptcy in July 2009, he had accumulated loans totaling $21 million, bankruptcy records show.

The bankruptcy case is still ongoing. Dykstra has listed his only income as a $5,700 monthly pension from Major League Baseball, records show.

Lawyers.com Lexis Nexis Logo

Law firm search