Matson had previously served as trustee for the bankruptcy of LandAmerica Financial Group (LFG), and when the Chapter 11 closed in 2015, he was selected as the court-appointed trust fiduciary to oversee the wind-down. As part of those responsibilities, he was prohibited from making any distributions to himself until 2021, when the wind-down would be complete. Matson admitted to transferring $1 million to himself, $1.5 million to attorney Robert Smith, and an additional $341,000 to an escrow account in his name — described as “discretionary bonuses.”
Last week, Matson pleaded guilty to obstruction of an official proceeding for lying during the investigation into his misconduct as bankruptcy trustee. Prosecutors also say they uncovered a separate, unrelated instance of embezzlement during their investigation.
“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,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “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.”
It doesn’t look like he’ll get off with a mere slap on the wrist either:
U.S. District Judge John A. Gibney Jr. of the Eastern District of Virginia said during the plea hearing Thursday the misconduct alleged in the statement of facts shows “a long history of malfeasance,” according to the Richmond Times-Dispatch. Gibney warned Matson that “it is very, very likely in this case that you will go to jail for a while.”
Matson faces a maximum of five years in prison and will be sentenced on November 22nd.
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