Saturday, May 25, 2013

Fraud and False Pretense: Lenny Dykstra Sentenced in Bankruptcy Case



In December of last year, Lenny Dykstra was sentenced for bankruptcy fraud and related crimes.  Specifically, he pleaded guilty to bankruptcy fraud, concealment of assets and money laundering.  He received a 6 1/2 month sentence.  The crux of the case was that Dykstra was busted from taking and selling things from his mansion while he was in bankruptcy.

The biggest thing I tell my Bucks County bankruptcy clients is that they must realize that everything they own comes under the purview of the bankruptcy court.  Specifically, you can't conceal assets, sell assets, or hide assets.  There are creditors who are owed.  A Trustee must determine if you have assets that can be liquidated (after your exemptions) and be paid to your creditors.  If you take those assets and liquidate them (or hide them) on your own, you are committing fraud.  In Dykstra's case, it was pretty egregious.  He tried to sell some memorabilia and furnishing from his home to, presumably, pay for his lifestyle.  You can't do that.

Thus, what I tell my Bucks County Chapter 13 clients and my Bucks County Chapter 7 clients is "when in doubt, wait and check."  You cannot take matters into your own hands and you cannot seek to liquidate assets while in bankruptcy.

1 comment:

  1. I didn't know before reading this blog post that if anyone take those assets and liquidate them (or hide them) on your own, you are committing fraud. You have shared quite useful information in this post. Many thanks for sharing this great post..

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