Disbarred Former Biglaw General Counsel Pleads Guilty

He faces up to five years in prison.

 

By Kathryn Rubino 

The Biglaw firm of LeClairRyan may be gone (the partners voted to dissolve the firm in 2019), but that doesn’t mean there’s nothing noteworthy going on with them. The firm’s former general counsel, Bruce Matson, was disbarred last year after allegations that he misappropriated $2.5 million in funds. And now he’s pleaded guilty to obstructing an investigation.

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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Disbarred Former Biglaw General Counsel Pleads Guilty 

 

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Disbarred former LeClairRyan attorney Bruce Matson charged in criminal case

 

Disbarred former LeClairRyan attorney Bruce Matson charged in criminal case

by Michael Schwartz 

Bruce Matson is a former LeClairRyan attorney who was disbarred last year. (BizSense file)

Bruce Matson, a veteran Richmond attorney who was disbarred last year for his mishandling of millions of dollars in a major bankruptcy case, has been charged criminally by federal prosecutors.

The U.S. Attorney’s Office on Thursday hit Matson with one count of obstruction of an official proceeding related to his work as the trustee overseeing the bankruptcy of collapsed Henrico-based title insurance giant LandAmerica while he was employed at law firm LeClairRyan.

The brief two-page filing states that Matson “did corruptly influence, obstruct and impede, and endeavor to influence, obstruct and impede, the due and proper administration of the law under which a pending proceeding was being had before an agency of the United States, that is the United States Trustee Program.”

The U.S. Trustee Program is a component of the Department of Justice.

Matson was charged via the criminal information process, which does not require a grand jury indictment and typically involves cooperation from the defendant. Matson was not arrested as part of the charges.

He remains free at least until his initial court appearance at 10:30 a.m. July 22 before Magistrate Judge Mark Colombell. That proceeding will include a detention hearing. He’ll then immediately go before Judge John Gibney for arraignment and a plea agreement hearing.

A summons issued in the case indicates that Matson intends to plead guilty.

Matson is represented in the criminal matter by McGuireWoods attorney Brandon Santos, who declined to comment.

The filing claims the alleged obstruction took place over the course of Aug. 25-Nov. 25, 2019, but no further detail of the offense is included.

The charge comes more than a year after it was brought to light in bankruptcy court that Matson wrongfully withdrew nearly $3 million from the LandAmerica wind-down account and deposited it into his personal bank accounts and that of an associate.

Matson, who spent much of his 40-year law career as a bankruptcy trustee, oversaw the complex LandAmerica case from the time of the Henrico-based title insurance giant’s collapse in 2008 until its seemingly successful conclusion in 2015.

But in August 2019, it was discovered that the wind-down fund had been emptied. Those funds were not to be disbursed until the wind-down period came to a close in 2021.

Matson eventually admitted to taking the money out of the trustee account and was removed as trustee from the LandAmerica case, despite his objections. He has since repaid the funds back to the estate and was also disbarred by the Virginia State Bar, effectively ending his career in law.

He also recently paid an additional $577,000 to the LandAmerica estate for reasons that were not explained in bankruptcy court filings.

The missing trust account funds were discovered by Protiviti, which works as a financial advisor on bankruptcy cases, including those of LandAmerica and, more recently, LeClairRyan.

The law firm for which Matson had worked for for many years fell into bankruptcy in September 2019. That case continues to play out, with the trustee going after many of the firm’s former attorneys, including Matson. The trustee recently won a bid to keep the terms of a settlement reached with Matson confidential, despite objections of one of the biggest creditors in the case.

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Disbarred former LeClairRyan attorney Bruce Matson charged in criminal case