Lenny Dykstra Indicted for Bankruptcy Fraud

A federal bankruptcy fraud case against former New York Mets star Lenny Dykstra has the player formerly known as "Nails" in serious hot water.

Last Friday, a grand jury indicted Dykstra on charges of fraud and obstruction of justice. Dykstra was originally arrested by police on suspicion of grand theft, but has not been indicted on those charges, reports Reuters.

Dykstra declared bankruptcy in 2009 after some of his business ventures began to fail.

He then defrauded creditors by stealing and destroying some of his own possessions, including furnishings, artwork and sports memorabilia valued at $400,000 from his $18.5 million dollar Los Angeles mansion, according to the indictment. He is accused of hiding this from creditors and the bankruptcy court, reports Reuters.

Dykstra is facing a sentence of 80 years if he is convicted of all 13 counts in the indictment.

"Nails" is currently free on a $150,000 bond, according to Fox Sports. He had a well-regarded baseball career, and played for both the Mets and the Phillies. He was part of the 1986 Mets team that took the World Series.

After his sports career ended, he began to develop his own business ventures, and was noted for his stock-picking abilities, reports to Fox News. When his ventures began to fold, he filed for bankruptcy.

Mark Werksman, Dykstra's attorney, said the government was "using an indictment to punish a debtor" and that "when all the facts come out, we'll show that Mr. Dykstra acted in good faith and behaved properly," reports The Los Angeles Times.

If the facts in the indictment are true, Dykstra likely faces a tough court battle. While a bankruptcy proceeding stays creditors, it also requires you to list your assets and not sell them off yourself. Your listed assets are later used to help pay off the creditors for at least a portion of the debt you owe. After your assets are distributed to the various creditors, those debts are considered satisfied.

While Lenny Dykstra's star may have fallen, he still has some hope. His next court appearance is scheduled for May 16th, according to Reuters.

Related Resources:

• Ex-Mets star Lenny Dykstra indicted by grand jury (Reuters)
• Bankruptcy Basics (FindLaw)
• Former Baseball Great Lenny Dykstra Goes Bankrupt (FindLaw's Atlanta Bankruptcy Law News)
• Increase in Bankruptcy: It's at 5-Year High (FindLaw's Law and Daily Life)