Former LeClairRyan attorney Matson found to have committed ‘multiple instances of embezzlement’

Disbarred attorney Bruce Matson, pictured in 2018, pleaded guilty on Thursday of obstructing an official proceeding. (BizSense file)

It turns out Bruce Matson dipped into the till of the LandAmerica Financial Group bankruptcy fund on more than one occasion.

The now-disbarred longtime Richmond attorney pleaded guilty on Thursday of obstructing an official proceeding, related to lies he told to federal officials as they were digging into how millions of dollars went missing from the LandAmerica estate on his watch as trustee and ended up in his personal bank accounts.

A statement of facts filed in conjunction with his guilty plea found that not only did Matson and at least one associate personally pocket around $3 million from the LandAmerica trust account in 2019, Matson also previously set up a fraudulent bank account to divert additional funds from the bankruptcy estate for his own use.

In addition to stealing money, it was also found that Matson inserted language into the LandAmerica wind-down budget the night before it was filed with the court in 2015 that made it easier for him to manipulate funds.

It was also discovered that Matson embezzled $23,000 in 2016 from the estate of Forefront Capital, a defunct futures broker for which he served as receiver.

The U.S. Attorney’s Office said it ultimately found “multiple instances of Matson’s embezzlement.”

“In total, between 2015 and 2019, Matson wrongfully obtained more than $4 million in bankruptcy-related assets,” the U.S. Attorney’s Office said in a prepared statement after Thursday’s proceedings.

Matson, 64, is now set for sentencing in federal court on Nov. 22, when he’ll face a maximum sentence of five years and a $250,000 fine.

His punishment ultimately will be up to U.S. District Court Judge John Gibney, who on Thursday gave Matson a taste of what to prepare for.

“It is very, very likely in this case you will go to jail for a while,” Gibney told Matson at Thursday’s hearing. “That’s sort of a big ‘if’ in your future.”

Despite reservations from Gibney, Matson was allowed to remain free on a personal recognizance bond until his sentencing date.

Terms of his bond include no travel outside of Virginia, other than to see one of his attorneys in Washington, D.C., as well as surrendering his passport and avoiding alcohol.

Gibney also added a provision that prevents Matson from engaging in any transactions of more than $10,000 while out on bond, based on his concern of ensuring that Matson doesn’t commit any additional financial crimes between now and his sentencing date.

“What we have here is a history that goes back to at least 2008 of Mr. Matson getting involved in transactions that to me are pretty complicated and result in other people’s money going to Mr. Matson,” Gibney said.

“I’m trying to figure out whether he ought to be held so he can’t continue to do this sort of thing. Here is a long history of malfeasance. If there are two fires, who knows if there might be four?” Gibney said, before ultimately allowing Matson’s bond.

Matson was flanked Thursday by his team of three attorneys: Richmond heavyweight Richard Cullen of McGuireWoods, Brandon Santos, also of McGuireWoods, and Danny Onorato, a former federal prosecutor-turned white collar criminal defense attorney from Schertler, Onorato, Mead & Sears in D.C.

“You have quite a troika of attorneys here today,” Gibney said to Matson. “They’re as good a set of lawyers as you can get.”

An email to Santos seeking comment Thursday afternoon was not returned.

Matson had served as the liquidating trustee for the LandAmerica case since 2008, when the once-mighty Henrico-based title insurance company collapsed. He shepherded the complex estate to what was touted as a seemingly successful conclusion in late 2015, recovering about 80 cents on the dollar for creditors out of nearly $600 million worth of claims.

“It was a big success that no one expected,” Matson said of the case in an interview in early 2016. “Right or wrong, it takes a while to wind these things down. No one complains about the time when you got the kind of results we got.”

Concluding the case included the creation of a $3 million wind-down fund that was put in place for six years for incidental costs, and leftover money from that fund was not supposed to be disbursed until this year.

Matson’s fall from grace began in August 2019, when it was discovered that the wind-down money had been removed from the trust account and split into personal accounts of Matson and his associate Robert Smith.

The missing money was found by financial adviser Protiviti during the course of the bankruptcy of LeClairRyan, the law firm for which Matson had worked for decades. Protiviti also worked on the LandAmerica case. Smith, who has not been charged, also previously worked for Protiviti.

Matson’s obstruction occurred during this time when questions began to be asked about the money. He gave various excuses at the time of why the money had been moved, before ultimately returning the funds to the LFG estate.

Nevertheless he was removed as the LFG trustee, despite his objections and desire to see the case through, and was ultimately disbarred after a more than 40-year career in law.

He was first charged in the criminal case last week via a criminal information process, which does not involve an arrest or indictment and typically occurs when a defendant agrees to cooperate with authorities.

Matson is being prosecuted by the U.S. Attorney’s Office for the Eastern District of Virginia, led by Raj Parekh. Assistant U.S. Attorneys Katherine Lee Martin and Kevin S. Elliker are handling the case.

Parekh, in a prepared statement after Thursday’s hearing, said: “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.”

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Deon hamner
Deon hamner
2 months ago

Not surprised… You steal once, it only gets easier and easier the more you do it…

kay christensen
kay christensen
2 months ago

In the Land America bankruptcy, he embezzled $4 million. If a deep dive is performed in all the other transactions he was involved- would likely surface similar behavior. The magnitude of his theft is outrageously brazen for him to be a novice.

Jackson Joyner
Jackson Joyner
2 months ago

I’m wondering why Robert Smith or the wives have not been charged. The money was found to be deposited into their accounts as well. Is it believable that a million, or hundreds of thousands of dollars, would appear in your account and you simply are not aware of the source? Certainly Matson had accomplices.

Matt Merica
Matt Merica
2 months ago

What a crook. It is staggering that he would think he could pocket several million dollars and walk away. Of course he had been stealing prior to the “big one”, but an act so brazen certainly deserves 5 years in the big house. Odds are 2-1 he even shows up for the sentencing….

Fred Squire
Fred Squire
2 months ago

100% he is paying his rock star legal team with stolen funds

Gail Davis
Gail Davis
2 months ago