Lenny Dykstra Agrees to Plea Deal in Bankruptcy Fraud Case

(Source: By Richard Winton, Los Angeles Times) - LOS ANGELES — Former baseball star and self-styled financial guru Lenny Dykstra, already sentenced to three years in a California state prison for a car scam, has agreed to a plea deal on federal bankruptcy fraud charges after looting his mansion of valuables as he struggled to battle numerous creditors.

Dykstra, who helped the New York Mets win the 1986 World Series and later became a celebrity stock picker before his finances dissolved in chaos in 2009, has racked up a score of charges in recent years.

His fall from grace during the last two years has resulted in conviction for a car finance scam and a separate charge of lewd conduct with a deadly weapon.

On Tuesday, federal prosecutors in Los Angeles entered under seal a plea agreement with Dykstra in connection with his embezzlement from the bankruptcy estate case.

Thom Mrozek, a spokesman for the U.S. attorney’s office, said the filing is under seal and the office cannot discuss the contents until it is unsealed.

Christopher Dybwad, a federal public defender representing Dykstra, did not return a call to his office, and a staffer said he was unlikely to comment.

According to federal prosecutors, Dykstra sold sports memorabilia and items from his Ventura County, Calif., mansion, including a $50,000 sink, that were frozen as part of the bankruptcy case. Typically, a person in bankruptcy can’t touch assets that are part of the case so that they are available to repay creditors.

Nicknamed “Nails” by baseball fans for his raucous style on the diamond, Dykstra turned to bankruptcy court in July 2009 to try to save his lavishly furnished Sherwood Country Club estate, which he bought from hockey legend Wayne Gretzky for $18.5 million at the height of the last housing boom.

Despite those efforts and a protracted and ongoing court battle with court officials and numerous creditors, the home was sold in 2010 to the private equity firm Index Investors, one of Dykstra’s creditors.

An affidavit filed by FBI Special Agent Ty Thomas lays out how federal investigators allege the baseball legend “sold many items belonging to the bankruptcy estate” and “destroyed and hid other estate items, depriving the estate of a combined $400,000 of assets.”

Dykstra allegedly had dozens of items including chandeliers, mirrors, artwork, a stove and a grandfather clock delivered to a consignment store, Uniques in West Los Angeles. The owner of the store paid him cash for a U-Haul truckload of goods, according to the agent.

Despite warnings from a bankruptcy trustee’s attorney, Dykstra — moments after promising not to remove items from his Camarillo Airport office — shifted numerous valuable pieces into a truck, according to the affidavit. People who received some of the items from Dykstra listed them on Craigslist and eBay.

The baseball legend has already been sentenced to three years in state prison. He pleaded no contest to grand theft auto and filing a false financial statement in connection with a scheme a judge described as an effort to steal cars that showed “sophistication, planning.”

In January 2011, Dykstra, his accountant Robert Hymers, 27, and friend Christopher Gavanis, 30, tried to lease high-end automobiles from several area dealerships by allegedly providing fraudulent information and claiming credit through a phony business, prosecutors said.

Dykstra addressed the court. “Did I do something I’m not proud of? Yes,” Dykstra said. “Am I a criminal? No.”

He apologized to his family and told the judge he had voluntarily entered drug rehab. He did not, however, apologize to the victims.

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©2012 Los Angeles Times

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