Lenny Dykstra arrested, facing bankruptcy fraud charges [Updated]

U.S. prosecutors Friday charged famed baseball outfielder Lenny Dykstra with bankruptcy fraud.

According to a statement by prosecutors, Dykstra was taken into custody at his Encino home Thursday night. The charge relates to fraud Dykstra allegedly committed involving the sale of items from a Ventura County mansion he owned.

"The federal charges stem from a bankruptcy case that Dykstra filed on July 7, 2009," the statement said.  "The criminal case filed in U.S. District Court alleges that Dykstra removed, destroyed and sold property that was part of the bankruptcy estate without the permission of the bankruptcy trustee.

PHOTOS: Lenny Dykstra

According to prosecutors, "Dykstra admitted in a bankruptcy hearing to having arranged the sale of sports memorabilia and a dresser that were property of the bankruptcy estate; and Dykstra “ripped out” a $50,000 sink from his mansion and took granite from the mansion and installed it in an office he set up at the Camarillo airport after he had filed for bankruptcy protection."

[Updated at 1:14 p.m.: The Los Angeles Police Department Commercial Crimes Division arrested Dykstra in Encino at 8 p.m. Thursday on separate grand theft charges related to the purchase of vehicles.

He was arrested by the Forgery Section of the of LAPD Commercial Crimes Division. The LAPD made the arrest following an investigation. He was held on $500,000 bail.]

As his baseball career wound down, Dykstra gained success as a businessman, first with a luxury car wash in Corona that the ballplayer dubbed “the Taj Mahal” of car washes. He then expanded the business to other parts of Southern California and in 2007 sold it to investors.

Dykstra also took his head-first style to Wall Street after teaching himself financial analysis and striking up a friendship with CNBC “Mad Money” host Jim Cramer, who hired Dykstra to write a stock-picking column for his influential website, TheStreet.com.

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--Richard Winton and Alejandro Lazo 

Photo: Lenny Dykstra in July 2010. Credit: Katie Falkenberg/For The Times

Comments

[Appointment Setting]

I lost all respect for Jim Cramer when he told investors there was nothing wrong at Bear Stearns and to hold the stock.

"Bear Stearns is not in trouble!" ~Jim Cramer

[cover2]

Lenny a famed player ? He was a journeyman at best

[C.Pal]

Posted by: dianeNYC | April 15, 2011 at 05:51 PM wrote:

This is a crime by Dykstra against government laws. Period. I can't see what he did to any real person, can't understand all the dissing against him. He's a human being who fell on hard times, and made some bad decisions. Give him a break.
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Read the espn story. He shafted his own mother out of $23,000 to charter a jet instead of flying commercial. He welched on numerous debts to his brothers and many businesses (owned by real people). He did not just run afoul of a gevernment law. He is a scam artist who feels everyone should pay for his luxuries.

[Paralegal Los Angeles]

Financial adviser?

[Long Calls]

Jim cramer's an expert and he said lenny d was one of the best in the business! Lenny knows his stuff---his theory: buy long, deep in the money calls and make big money now! Lenny's newsletter should be available soon now that he's out on bail.