Bankruptcy is a serious business and requires complete and accurate disclosure of all assets and liabilities when filing papers withe the court. No one right now knows that more than Lenny Dykstra, the former Phillies outfielder who pled guilty on July 13th to bankruptcy fraud, concealment of assets and money laundering. He could face 20 years in prison, and up to $750,000 in fines.
What Did He Do?
Dykstra filed for bankruptcy three years ago, claiming he owed more than $31 million and had only $50,000 in assets. However, at the same time, he was selling assets to raise money without telling the bankruptcy court or the trustee. More specifically, he:
- said he put an oven, sconces and chandeliers into a storage unit, but actually sold the items for $8,500.
- hid baseball gloves, balls, bats and other memorabilia from the bankruptcy court and creditors and sold them last year for about $15,000.
Why It Is a Bad Idea
People who lie on a bankruptcy petition can face serious consequences, including jail and the loss of their bankruptcy discharge. Anyone who thinks that it is no big deal to leave a few things out of a bankruptcy should consider what is happening to Dykstra. In an article today in the Gloucester County Times, U.S. Attorney Andre Birotte Jr., is quoted as saying:
“Mr. Dykstra’s days of playing games with the public and the legal system are over. These convictions should serve as a cautionary tale of a high-flying sports celebrity who tried to manipulate and exploit both his creditors and the bankruptcy laws.”
Criminal penalties are real for this type of behavior, and they are being actively enforced by the U.S. Attorneys. So whether you are a former baseball All Star, or a Real Housewife of New Jersey, the rules apply to you. So be honest and make your life better, rather than worse.