A contrite former Richmond bankruptcy lawyer and trustee who misappropriated $4 million was sentenced Monday to three years and eight months in prison and fined $10,000 for obstructing an official proceeding.
Bruce H. Matson, 64, whose law license was revoked, pleaded guilty to the charge in July and has repaid all of the money. He was facing a maximum punishment of five years in prison, but federal sentencing guidelines called for a term of roughly three to four years.
The government asked U.S. District Judge John A. Gibney Jr. for a sentence at the high end of the guidelines, and Matson’s lawyers, citing his repayment of the money, his lack of a prior record and his health and family problems, sought a prison term at the low end.
“I can’t express how deeply sorry I am ... I’ve disappointed so many people, so many institutions,” Matson told Gibney shortly before he was sentenced. His wife and a daughter, at times in tears, testified Monday on Matson’s behalf.
Matson told the judge, “They have had two years of pain that no parent or spouse would ever want to see their family go through.”
Gibney noted he was moved by letters received on Matson’s behalf attesting to his praiseworthy professional and family life and his church and community work. Because of COVID-related seating restrictions, members of his church, his family and others watched the hearing from Gibney’s courtroom and three satellite courtrooms that displayed video and audio of the proceedings.
Matson’s good side aside, Gibney said the case was not just about a simple theft.
“It’s a theft done by an officer of the court while acting as an officer of the court,” he said.
“He stole $4 million,” Gibney said. The judge told Matson he was fortunate he had good lawyers who were able to win a plea deal with the government in which he was not subject to forfeiting another $4 million.
“People who steal need to take a lesson from this case,” the judge added.
Matson’s crime stemmed from his attempts to thwart an investigation into his fraud while a court-appointed trustee in the bankruptcy of the LandAmerica Financial Group. A federal investigation into those allegations uncovered instances of Matson’s embezzlement from the bankruptcy trust between 2015 and 2018, of roughly $800,000.
Matson also manipulated the budget of the post-bankruptcy wind-down so that he could divert funds to himself and others after the close of the LandAmerica bankruptcy, when he would no longer be subject to scrutiny by creditors and the bankruptcy court, and was able to siphon away more than $3.2 million for personal payments to himself and others.
The money, however, was put into accounts controlled by Matson and not spent, enabling Matson to return it, Brandon Michael Santos, one of Matson’s lawyers, told Gibney on Monday. On Monday and in court papers filed earlier, Matson’s lawyers cited the decline of his now-defunct former law firm, LeClairRyan; family pressures involving a sibling and her son; and other issues all pressuring Matson at the time of the misconduct.
In trying to explain why Matson took the money, Santos referred to a letter from a psychiatrist who said it was “a rainy-day fund and a security blanket given all the turmoil going on in his life.”
Gibney noted that Matson was a successful bankruptcy attorney who did not need to steal.
“It’s clear that what he did is not rational,” the judge said. “I must say this case is unique in my 11 years on the bench.”
Thomas A. Garnett, an assistant U.S. attorney prosecuting the case, asked Gibney to impose a 46-month prison term. “It was theft after theft,” Garnett said. And, added the prosecutor, “It was fraud for fraud’s sake by the end.”
The money was repaid, Garnett said, but the repayment was made in the context of his cover-up.
“He paid the money back because he got caught and he lied when he was doing it,” Garnett said.
Of the theft, Garnett said: “It’s sort of mind-boggling ... it is strange, judge. Unfortunately, it’s not entirely uncommon.”
Gibney turned down a request from Matson’s lawyers that he be allowed to turn himself in to begin serving his sentence at a later date, and Matson was ordered taken into custody at the conclusion of the hearing.