Former Baseball Player Lenny Dykstra Indicted by Federal Grand Jury in Bankruptcy Fraud Case

LOS ANGELES—Lenny Dykstra, an All-Star outfielder who played for the New York Mets and Philadelphia Phillies, was indicted today by a federal grand jury that accused him of bankruptcy fraud for allegedly selling items from his $18 million mansion in Ventura County.

Lenny Kyle Dykstra, 48, who was known by the nickname “Nails” and is currently residing in Murietta, California, was named in a 13-count indictment returned this afternoon.

The indictment accused Dykstra of one count of bankruptcy fraud, one count of 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 the Bankruptcy Court.

The indictment is the result of conduct Dykstra allegedly engaged in after filing a bankruptcy case on July 7, 2009. The indictment alleges that after filing the bankruptcy protection, Dykstra looted his Sherwood Estates mansion, lied about who stripped the mansion, and denied receiving money for having sold items that were owned by the Bankruptcy Estate.

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.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.

All of the charges in the indictment carry a statutory maximum penalty of five years in federal prison, except for obstruction of justice, which carries a potential sentence of up to 20 years in prison. Therefore, if he is convicted of all 13 counts in the indictment, Dykstra would face a maximum possible penalty of 80 years in 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.

“The bankruptcy-related conduct charged in the indictment constitutes an egregious abuse of the bankruptcy system and will not be tolerated,” stated Peter C. Anderson, U.S. Trustee for Region 16. The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.

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
Release No. 11-064