A former chief legal officer of now-defunct law firm LeClairRyan was sentenced Monday to 44 months in prison and ordered to pay a $10,000 fine after pleading guilty in July to obstructing an embezzlement investigation into his own fraudulent conduct as a bankruptcy trustee, the Department of Justice announced.
Title insurance company LandAmerica Financial Group (LFG) filed for bankruptcy in 2008. Bruce Matson, who worked decades at LeClairRyan, including as chief legal officer during the firm’s later years, was the court-appointed trustee.
“A federal investigation … uncovered multiple instances of Matson’s embezzlement from the LFG Trust between 2015 and 2018, totaling approximately $800,000 in misappropriated funds,” the Justice Department stated. According to court documents, Matson misled the U.S. Trustee’s Office in 2019 when he made false statements in response to allegations about the misappropriated funds.
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,” the Justice Department said.
The investigation also uncovered an unrelated instance of Matson embezzling $23,000 in 2016 from the estate of defunct futures broker Forefront Capital, for which Matson served as receiver and debtor-designee. In total, between 2015 and 2019, Matson obtained more than $4 million in bankruptcy-related assets, according to the Justice Department.
Matson was disbarred in Virginia last year. LeClairRyan filed for bankruptcy in 2019.