Former Attorney Bruce H. Matson Pleads Guilty to Obstructing Investigation of Bankruptcy Embezzlement -LandAmerica Case

prerequisite disclosure and caveat…

To be clear none of this gives me satisfaction - Bruce was known as a preeminent legal expert. He spent decades fighting the good fight. Mentoring thousands of new attorneys. Encouraging legal support staff, telling them that we are the reasons attorneys look good. When Bruce entered a room he commanded that room. In the beltway legal community Bruce H Maston was a legal superstar. And fondly thought of as a legal Titian. I struggled if it was a good idea for me to write about his stunning fall from grace. I should also disclose that one of my former bosses is now a Federal Bankruptcy Judge.

I spent the weekend trying to rationalize if I had the prerequisite compartmentalization skills. Meaning I asked myself could I set aside any personal tones or biased opinions. I called my former boss and had a discussion weighing the pros and cons. Perhaps I needed to be reminded of why I’ve stayed in this industry. Perhaps I needed my touch stone to help guide my way.

In the end I came to the conclusion that I could, or at least I would try. You should know that it is with profound sadness and deep disappointment that we should talk about Defendant Bruce H. Maston - Thus the July 22, 2021 DOJ-OPA press release that he plead guilty

Bruce H Maston biography;

…buckle up and pour yourself a nice tall glass of sweet tea because I’m about to take you on a super fun ride. For the record I had to edit this article no less than 4 times because I felt I wasn’t sticking to the facts. Bruce H Maston biography reads in part; ..a graduate of the College of William & Mary (B.A. - History/English) and of the Marshall-Wythe School of Law, College of William & Mary (J.D.). Bruce has been selected as a "Leader in the Law" for Virginia and was annually included in the "Best Lawyers in America." HIKER Bruce - trail name "RTK" - hiked the 2,200-mile Appalachian Trail in 2018, a thru-hike year known for a severe March in the south, an unusually wet time through the mid-Atlantic, and an unseasonably warm summer in New England. RTK's hike was memorialized on a podcast, YouTube channel, and website - all under the name "Returning to Katahdin." 

Defendant Matson’s actual hike on the Appalachian Trail (of which he raised over $36K) he has an entire YouTube Channel - he also has the profile R.T.K on several hiking websites

• https://hikingradionetwork.com/returning-to-katahdin/ which has 44+ podcast -archived back up archive

• Published eight book, see his Amazon Author Profile

• The Virginia Bar officially disbarred Bruce H Maston in November 2020 (read pages 2 & 3)

July 23, 2021 - Former Richmond Attorney Pleads Guilty to Obstructing Investigation of Bankruptcy Embezzlement…

The DOJ-OPA press release reads in part - pay attention to the “and others” that’s going to be important especially when you read Maston’s plea agreement

Bruce H. Matson -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 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… 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.

…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.

Relevant Court Filings EDVA Case No: 3:21-cr-00079-JAG-1

..for the umpteenth time EDVA has four Courthouses; Norfolk, Newport News, Richmond and Alexandria —I don’t know why this is so hard to understand. Furthering the Bankruptcy Courts “co-locate” in the aforementioned federal courthouses. Again I don’t know why this is so hard to comprehend… for the purposes of this article I’m only going to focus on the following three documents; Criminal Information, Plea Agreement and Statement of Facts…

• July 14, 2021 CRIMINAL INFORMATION as to Bruce H. Matson (1) count(s) 1 See EDVA-ECF

• July 22, 2021 - 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.  See EDVA-ECF

• July 22, 2021 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. See EDVA-ECF 

• July 22, 2021 - ORDER Setting Conditions of Release as to Bruce H. Matson. Signed by Magistrate Judge Mark R. Colombell on 7/22/21. See EDVA-ECF - or see Scribd Link

• July 22, 2021 - PLEA AGREEMENT (see EDVA-ECF) as to Bruce H. Matson and Statement of Facts (see EDVA-ECF) as to Bruce H. Matson 

Maston Criminal Information

Ironically Maston’s Criminal Information (see EDVA-ECF) was filed one day after the new Trustee filed their Report

In or about November 2008, LFG filed for Chapter 11 bankruptcy protection in the U.S.Bankruptcy Court for the Eastern District of Virginia, Richmond Division CaseNo.08- 35994-KRH

Count One: August 25, 2019,and on or about November 25, 2019, within the Eastern District of Virginia and elsewhere, the defendant,BRUCE H.MATSON, did corruptly influence, obstruct and impede,and endeavor to influence,obstruct and impede, the due and proper administration ofthe law under which a pending proceeding was being had before an agency of the United States, that is the United States Trustee Program.

(In violation of Title 18, United States Code, Section 1505)

Maston Plea Agreement

As you’ll note the penalty for 18 U.S.C. §1505 carries a maximum penalty of five years in prison, a $250,000 fine and a period of supervised probation … see EDVA-ECF for Defendant Maston’s Plea Agreement or you can access via this Scribd Link

I now refer you to pages 3 and 4 of Maston’s Plea Agreement (see EDVA-ECF) you’ll note the “offense level” and the various reductions the parties agreed to herein… and trust me - wait until you read page 6 of his Plea Agreement

USA v Maston Plea Agreement

As Plea Agreements go, they tend to be pretty boilerplate but there are various subsections one should always read. For Example: level of offense, downward departure of level, but I’d like to draw your attention to page 6 - Payment of Taxes and Filing of Tax Returns. Read what I highlighted closely… see the “to disclose grand jury materials to the Internal Revenue Service” —well remember how I said pay attention to “and others” - if you followed the LandAmerica Bankruptcy in late 2019 some of the bankruptcy parties sounded the alarm that millions of dollars was “otherwise unaccounted for…”

USA v Maston Plea Agreement

Do you see the yellow box? Well back in 2020 Maston was under a huge amount of scrutiny because as previously mentioned (in 2019) some of the parties in the LandAmerica bankruptcy pulled the fire alarm and unequivocally stated millions of dollars were unaccounted for. That yellow box coupled with the level reduction in offense, that tells me Maston must have given the Government some valuable information. As I’ve previously explained the USSC has sentencing guidelines, Maston was/is looking at five years in prison but if you read the plea agreement carefully - my educated guess is his attorneys negotiated a sweet deal with the Government and he will likely be sentenced to 0 to 14 months, see USSC 2016 Chart

Maston’s Statement of Facts “and others”

If someone tells you, via highlights and text to pay attention —conventional wisdom says, well maybe you should, especially if said person pays for the filings and then uploads them. For Example Statement of Facts (see EDVA-ECF) as to Bruce H. Matson 

USA v Maston Statement of Facts

I now refer you to page 2 of the Statement of Facts, specifically paragraphs 3 and 8 because “and others” —another reason you should read the Statement of Facts is it typically gives you a much more detailed accounting of the corrupt acts and you can then formulate the crimes the Defendant committed. But like I said Matson’s Defense Attorney negotiated one helluva sweet deal for their client.

Moving on to page 3 - here the Government provides details on how Maston siphoned off millions of dollars ¹ and how he deceptively carried out the scheme to unjustly enrich himself. All while circumventing the various “bankruptcy controls” in place to prevent such an egregious breach of trust and breach of fiduciary duty…

I mean the level of detail in the Statement of Facts is kind of bonkers, and yet I can’t help but wonder why did he do it? What made Maston think it was a good idea to open up a fraudulent bank account, instruct Individual A to wire transfer funds to the fraudulent account. Of which Maston was the sole signatory of and he later changed the address (of the fraudulent account) to his home address.

Setting aside the post-petition discharge, it is normal that the Court appointed Bankruptcy Trustee to remain —but the firm fixed price here in excess of $500K seems highly suspect but the 11:45 hour drafted language was actually placed in the letter which was sent to the bankruptcy court less than a day later. Wow. Just. Wow…I don’t know what else to say

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.

I mean it’s just pages and pages of Matson’s fraudulent scheme to unjustly enrich himself “and others”…again the total lack of sophistication here it is almost like Matson wanted to be caught. But it is still astounding how flagrant Matson and his un indictment co-conspirator (specific Individual A) comported themselves.

USA v Maston Statement of Facts

Oh but wait - there’s more- in February of 2018 - the Government proffered new facts Defendant Matson created a new account under the name of Maston Consulting LTD, see VA SCC Certified Copy of Articles of Incorporation - Matson then opened a separate (fraudulent account at South State Bank..

Defendant Matson not only unlawfully siphoned money and abuse the trust vested in him as the Court Appointed Bankruptcy Trustee - but he repeatedly ran the funds through the fraudulently opened Matson Consulting LTD. I went ahead and acquired the Certified Virginia State Corporation Commission filings, found here

As mentioned in the July 22, 2021 DOJ-OPA Press Release, during the pendency of the wide ranging Federal Investigation -it was discovered that Defendant Matson had embezzled funds from Forefront Capital - I now refer you to page 10 of the Statement of Facts (see EDVA-ECF)

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.

Repeat after me - “…and others”

hiya Individual A I see we meet once again because setting aside Individual A pops up over and over in the Statement of Facts - and if you know how Court filings work -specifically how to cross reference them well it doesn’t take that long to figure out the Global Company and Individual A…

Defendant Bruce Matson and Individual A “Rob Smith” ongoing Obstruction

It is one thing to try and explain where the money went but it becomes a whole new level of criminal intent when three years later the two (Defendant Bruce Matson and Individual A aka Rob Smith)

In an effort to continue both Bruce Matson and Rob Smith unjust enrichment, the Government proffers two letters from each of the aforementioned individuals which they filed in August 2019.

August 2019 Letters re: Forefront Capital and the bankruptcy of LandAmerica Financial Group…

• August 26, 2019 Letter filed by Robert B. Smith - see EDVA-ECF

• August 26, 2019 Letter filed by Bruce H. Matson. -see EDVA-ECF

And your prerequisite multimedia presentation because I’m aware of how many documents are in this article

Question- did you happen to find the Easter egg in the VA Bar affidavit?

Pity that you might have missed it - beyond Individual A is in fact Robert “Rob” Smith but Defendant Matson made an interesting disclosure in his VA Bar Affidavit …look at what I underlined…

Also nearly all the documents discussed in this article are uploaded to my Scribd Account so read them at your leisure or not…

1. The “global firm” that the Prosectors invoke in the Statement of Facts is Provititi https://www.protiviti.com/