Tag Archives: bankruptcy fraud

Former Major League Baseball Player Lenny Dykstra Sentenced to Prison for Bankruptcy Fraud

Updating a previous story, former Major League Baseball All-Star Lenny Dykstra was sentenced to six and a half months in prison last week after he was convicted of bankruptcy fraud. According to the Associated Press, U.S. District Judge Dean Pregerson weighed Dykstra’s “battle with drugs and alcohol versus the crimes he committed and opted to give the ex-big leaguer a lenient prison term.” Dykstra was also ordered to pay $200,000 in restitution. Dykstra pleaded guilty to bankruptcy fraud, concealment of assets and money laundering earlier this year after prosecutors found out that he was trying to sell baseball memorabilia without approval during his Chapter 11 bankruptcy case. After his filing, Dykstra hid, sold or destroyed at least $200,000 worth of items without permission, the AP reported. “I don’t think I’m a bad person,” said Dykstra, 49, in court. “I made some bad decisions.” During his bankruptcy filing, Dykstra claimed to…
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Bankruptcy Fraud Can Lead to Prison Time

On Monday, we discussed the case of pop star Toni Braxton, who is accused of fraudulently transferring money to her estranged husband in order to avoid paying back creditors in her bankruptcy case. Bankruptcy fraud is a crime that can be punishable with prison sentences. Last week, a 51-year-old Kennedy J. Hyde, of New York, received a 27-month prison sentence after a jury found him guilty of concealing $50,000 from the court through an Ohio bank. When you file for bankruptcy, it is important to be as upfront about your assets as possible. Trustees and creditors can question your disclosures; in Hyde’s case, the FBI was investigating his claim. As we have said before, honesty is the best policy when it comes to bankruptcy proceedings, whether you are filing Chapter 7 or Chapter 13. Trustees have ways of detecting any dishonest information that may be included in a filing, as…
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Lawyer Facing Bankruptcy Fraud Charges for Alleged Dishonesty

Continuing on our discussion about the importance of honesty during bankruptcy, we focus on the case of Charlotte real estate lawyer Victoria Sprouse, who is facing charges related to bankruptcy fraud. Sprouse’s case has caught national attention, as a judge recently denied bail. The judge told Sprouse she participated in, “breathtaking acts of deception by a trained lawyer.” Sprouse allegedly hid accounts following her bankruptcy filing by using the names of two other people to conceal assets. Any decent bankruptcy lawyer will tell you that honesty and full disclosure are the incredibly important to any bankruptcy case. When you sign a bankruptcy petition, you do so under the penalty of perjury. If you file for bankruptcy, regardless of whether it’s Chapter 7 or Chapter 13, you need to be as honest as possible with your attorney and answer all questions truthfully. An attorney can only fill out a petition using…
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