Former Major League Baseball star and self-styled financial guru Lenny Dykstra has been charged with selling pieces of his former life as he struggled to battle numerous creditors in Bankruptcy Court.
Dykstra helped the New York Mets win the 1986 World Series and later became a celebrity stock picker and entrepreneur before his finances dissolved in the summer of 2009. Dykstra was charged with one count of embezzling from a bankruptcy estate, the Justice Department said Friday.
The former Mets and Phillies outfielder had been arrested on separate charges Thursday by the Los Angeles Police Department's commercial crimes division. Dykstra was picked up at a home in Encino at 8 p.m. Thursday on suspicion of buying vehicles through fraudulent means, police said. Dykstra, 48, was being held in lieu of $500,000 bail and could not be reached for comment.
According to federal prosecutors, Dykstra sold sports memorabilia and items from his Ventura County 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.
The criminal accusations are just the latest troubles for Dykstra, who was nicknamed "Nails" by baseball fans for his raucous style on the diamond. The Garden Grove native 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 $18.5million 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 last year to the private equity firm Index Investors, one of Dykstra's creditors.
"This is a guy who, like too many professional athletes, feels very entitled," said Randall Lane, who devoted a chapter to his financial dealings with Dykstra in his book about Wall Street excess, "The Zeroes: My Misadventures in the Decade Wall Street Went Insane."
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, on South Barrington Avenue 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.
One seller seeking to promote the sale of a desk from the Sherwood Estates home bragged that he had taken a picture of Dykstra "the day he purchased a lot of his furniture," including a custom-made desk.
According to the affidavit, Dykstra arranged through his employees to spirit away a dazzling array of antiques, big-screen TVs, artwork and collectible books from his residences.
The Gretzky mansion — a complex of more than 10,000 square feet with tennis courts, a pool, a guesthouse and striking views of the Sherwood Country Club — was the most valuable piece of Dykstra's estate and the crown jewel of his post-baseball business empire.
As his baseball career wound down, Dykstra gained success as a businessman first with a luxury carwash in Corona that he dubbed "the Taj Mahal" of carwashes. He 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, The Street.
With Cramer's seal of approval, Dykstra's prominence soared. He was profiled in a New Yorker article titled "Nails Never Fails: Baseball's most improbable post-career success story," and touted his stock picks on financial news shows.
Cramer declined to comment Friday.
In 2008, Dykstra began publishing the Players Club, a glossy financial advice magazine created for pro athletes and featuring sports luminaries such as Brett Favre and Tiger Woods on its covers. The venture folded as lawsuits from creditors and unpaid business associates began piling up.
Still, like those days on the diamond, Dykstra refused to go down without a fight, challenging his proceedings at nearly every juncture.
Last summer, he briefly moved back into the old Gretzky mansion and reclaimed it as his, throwing a party to celebrate, even though it was under the jurisdiction of Bankruptcy Court.
"Earn your keep," read the emailed party invitations he sent to friends and associates. "You are invited to join Lenny Dykstra and friends as he reclaims the house that Gretzky built!"