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Case Number: 3:21-cr-79
Judge: John A. Gibney, Jr.
Court: United States District Court for the Eastern District of Virginia (Henrico County)
Plaintiff's Attorney: United States Attorney’s Office
Description: Richmond, Virginia criminal defense lawyer represented Defendant charged with obstructing an official proceeding in connection with his attempts to thwart 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 LandAmerica Financial Group (LFG). A federal investigation into those allegations uncovered multiple instances of Matson’s embezzlement from the LFG 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,” 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.”
Additionally, Matson manipulated the budget for LFG’s post-bankruptcy wind-down period so that he could divert residual funds to himself and others after the close of the LFG bankruptcy, when he would no longer be subject to scrutiny by LFG creditors and the Bankruptcy Court. 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. In order to access these residual funds, Matson also inserted language into the budget the night before it was filed with the Bankruptcy Court. This language seemingly gave Matson the authority to pay discretionary bonuses using residual funds. Matson knew the last-minute language included in the budget contradicted other court filings, but he instructed other trust professionals not to amend the filings, including the proposed Final Decree ultimately endorsed by the Bankruptcy Court in December 2015. As a result of this 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.
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 Matson served as receiver and debtor-designee. In total, between 2015 and 2019, Matson wrongfully obtained more than $4 million in bankruptcy-related assets.
Matson is scheduled to be sentenced on November 22. He faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
“The investigation into Mr. Matson's conduct as a bankruptcy trustee resulted in authorities uncovering a separate, unrelated incident. His plea today, for obstruction, is an admittance of responsibility,” said Stanley M. Meador, Special Agent in Charge of the FBI’s Richmond Field Office. “This plea is also a reflection of the investigative team's hard work and partnership between the FBI, the U.S. Postal Inspection Service, and the United States Attorney's Office, Eastern District of Virginia.”
“This guilty plea highlights the joint efforts of the U.S. Postal Inspection Service, our law enforcement partners, and the U.S. Attorney’s office to prosecute those who seek to exploit and embezzle by misleading the government,” said U.S. Postal Inspector in Charge for the Washington Division Daniel Adame. “The mission of the U.S. Postal Inspection Service is to protect consumers by ensuring the nation's mail system is not used in furtherance of criminal activity, which safeguards our customers’ trust in the United States Postal Service.”
Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; Stanley M. Meador, Special Agent in Charge of the FBI’s Richmond Field Office; and Daniel A. Adame, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement after U.S. District Judge John A. Gibney, Jr. accepted the plea. The U.S. Trustee Program provided significant assistance in this case.
Assistant U.S. Attorneys Katherine Lee Martin and Kevin S. Elliker are prosecuting the case.
Outcome: 07/22/2021 8 Minute Entry for proceedings held before Magistrate Judge Mark R. Colombell: Initial Appearance and Bond Hearing as to Bruce H. Matson held on 7/22/2021; Court reminded counsel of prosecutorial obligations as required under Rule 5(f); Court summarized charges; Deft advised of rights; Deft retained counsel who was present; Govt not seeking detention; Deft released on bond with conditions; Deft to appear before United States District Judge John A. Gibney immediately following this hearing for a plea agreement hearing in this matter. (FTR.)(jsau, ) (Entered: 07/22/2021)
07/22/2021 9 ORDER as to Bruce H. Matson. his matter comes before the Court on its own initiative. In accord with the Due Process Protections Act and Rule 5(f) of the Federal Rules of Criminal Procedure, this Court CONFIRMS the United States obligation to disclose to the defendant all exculpatory evidence, that is, evidence that favors the defendant or casts doubt on the United States case, as required by Brady v. Maryland, 373 U.S. 83 (1963) and its progeny, and hereby ORDERS the United States to do so. Failure to disclose exculpatory evidence in a timely manner may result in serious consequences, including, but not limited to, exclusion of evidence, adverse jury instructions, dismissal of charges, contempt proceedings, disciplinary action, or sanctions by the Court. Having given counsel the oral admonition required by the Due Process Protection Act, this Order serves as the reminder of prosecutorial obligation and duties in accordance with Rule 5(f) and the Eastern District of Virginia Standing Order concerning the same. Signed by Magistrate Judge Mark R. Colombell on 7/22/21. (jsau, ) (Entered: 07/22/2021)
07/22/2021 10 ORDER Setting Conditions of Release as to Bruce H. Matson. Signed by Magistrate Judge Mark R. Colombell on 7/22/21. (jsau, ) (Entered: 07/22/2021)
07/22/2021 11 Minute Entry for proceedings held before District Judge John A. Gibney, Jr.:Plea Agreement Hearing as to Bruce H. Matson held on 7/22/2021; Plea entered by Bruce H. Matson (1) Guilty Count 1; Sentencing set for November 22 at 10:00 a.m.; Defendant continued on bond with additional bond conditions (Court Reporter G. Halasz, OCR.)(wtuc) (Entered: 07/22/2021)
07/22/2021 12 Pretrial Services Bond REPORT (Initial Pretrial Services Bond Report) (SEALED - government and defense counsel) as to Bruce H. Matson. (taylor, sheree) (Entered: 07/22/2021)
07/22/2021 13 WAIVER OF INDICTMENT by Bruce H. Matson (wtuc) (Entered: 07/22/2021)
07/22/2021 14 PLEA AGREEMENT as to Bruce H. Matson (wtuc) (Entered: 07/22/2021)
07/22/2021 15 Statement of Facts as to Bruce H. Matson (wtuc) (Entered: 07/22/2021)
07/22/2021 16 Order for sentencing guidelines as to Bruce H. Matson. Sentencing set for 11/22/2021 at 10:00 AM in Richmond Courtroom 6000 before District Judge John A. Gibney, Jr. Signed by District Judge John A. Gibney, Jr. on 7/22/21. (wtuc) (Entered: 07/22/2021)