RICHMOND, Va. (WRIC) — A former Richmond attorney pleaded guilty Thursday to obstructing an official proceeding in connection to his attempts to hinder a 2019 investigation into his own fraudulent conduct as a bankruptcy trustee.
According to court documents, Bruce H. Matson, 64, misled the U.S. Trustee’s Office in 2019 when he made false statements in response to allegations that he misappropriated funds as a court-appointed trustee in the bankruptcy of Glen Allen-based title insurance company LandAmerica Financial Group. Since disbarred, Matson was a longtime local bankruptcy attorney, formerly of LeClairRyan.
Prosecutors said that a federal investigation into such allegations uncovered multiple instances of Matson’s embezzlement from the LandAmerica Financial Group Trust between 2015 and 2018 totaling approximately $800,000 in misappropriated funds.
“Matson abused his position as an attorney, officer of the court, and bankruptcy trustee to enrich himself at the expense of the people whose very interest the court appointed him to protect,” Acting U.S. Attorney for the Eastern District of Virginia (EDVA) Raj Parekh said. “As part of our unwavering commitment to pursuing equal justice under the law, we will continue to root out the fraudulent conduct of those who violate the public’s trust and use their positions of power to conceal their crimes.”
According to the U.S. Attorney’s Office, Matson manipulated the budget for LandAmerica Financial Group’s post-bankruptcy wind-down period so that he could redirect residual funds to himself and others after the close of the company’s bankruptcy. In particular, Matson misrepresented the amount of money needed for the wind-down process and obscured the amount of money actually retained in trust accounts, according to a release.
Prosecutors said that the night before the budget for LandAmerica Financial Group’s post-bankruptcy wind-down period was filed with the Bankruptcy Court, Matson inserted language to give himself the authority to pay discretionary bonuses using residual funds. As a result of his conduct, Matson was able to siphon away more than $3.2 million for personal payments to himself and others, depleting the trust account more than two years before the end of the wind-down period.
According to a release, the federal investigation also uncovered an unrelated instance of Matson embezzling approximately $23,000 in 2016 from the estate of Forefront Capital, a defunct futures broker for which he served as receiver and debtor-designee. In total, between 2015 and 2019, Matson reportedly obtained more than $4 million in bankruptcy-related assets, which were not his to obtain.
The U.S. Attorney’s Office for the Eastern District of Virginia announced Thursday that Matson is scheduled to be sentenced on Nov. 22. He faces a maximum penalty of five years in prison.