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Former ballplayer arrested for bankruptcy fraud

Former Major League Baseball player Lenny Dykstra has been arrested on allegations of bankruptcy fraud. After retiring from baseball, the former star outfielder went into business and sold a successful car wash for millions. He then launched a career as a stock analyst. The rise to the heights of the business world became embroiled with allegations of misdeeds. Dykstra filed for personal bankruptcy in 2009.

Prosecutors now allege that after Dykstra filed for bankruptcy, he destroyed and sold items involved in the bankruptcy estate. Prosecutors further allege that Dykstra testified in his bankruptcy hearing that he arranged for the sale of certain sports memorabilia and a dresser that belonged to the bankruptcy estate.

The current allegations claim that items in his mansion were also sold without the permission of the bankruptcy trustee. Prosecutors claim Dykstra tore a $50,000 sink and granite countertops from his mansion after he filed the bankruptcy petition. In all, prosecutors allege the former ballplayer sold or destroyed as much as $400,000 in property that was part of his bankruptcy case.

In his 2009 bankruptcy petition, Dykstra reportedly listed two houses. Both houses became a part of the bankruptcy estate that would be used to pay off creditors. Prosecutors claim that roughly a month after filing for bankruptcy Dykstra received cash from a consignment store in exchange for a truckload of furnishing and fixtures from one of his homes.

Law enforcement took the former ballplayer into custody Thursday night on separate allegations of fraud in the purchase of automobiles. No grand theft charge has yet been filed related to the automobiles. United States prosecutors filed the bankruptcy charges on Friday. Dykstra was being held on $500,000 bail. He could face up to five years in federal in prison if convicted of bankruptcy fraud.

Source: Los Angeles Daily News, "Encino resident Lenny Dykstra charged with bankruptcy crime," 15 Apr 2011

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