Lawyers for Bruce Matson asked Monday for a 37-month prison sentence for the former chief legal officer at now defunct law firm LeClairRyan, who pleaded guilty in July to obstructing a federal probe, Reuters reported. Federal prosecutors for the Eastern District of Virginia in Richmond, where Matson is set to be sentenced Nov. 22, requested 46 months in prison and a $250,000 fine in a separate filing on Monday. Prosecutors said Matson that misappropriated more than $4 million between 2015 and 2019, while he served as liquidation trustee for title insurance company LandAmerica Financial Group. Matson concealed his misconduct from the U.S. Trustee's office, which investigated the matter, they said. The maximum sentence Matson faces is five years in prison, a $250,000 fine and a maximum supervised release term of three years. In arguing for a shorter sentence, Matson's attorneys said that he experienced a “tremendous fall from grace,” and was a respected bankruptcy attorney for more than three decades. They also referenced his cooperation with the court and voluntary surrender of his law license. He agreed to disbarment in November 2020.
The chapter 7 trustee overseeing the dissolution of New York real estate law firm Kossoff PLLC asked a bankruptcy judge Tuesday to hold its founder in civil contempt and order him incarcerated if he continues defying court orders to cooperate, Reuters reported. The trustee, Al Togut, also asked the judge in a separate motion Tuesday to compel the Manhattan district attorney's office to turn over certain grand jury materials relating to its investigation of firm founder Mitchell Kossoff. The filings underline Togut's mounting frustrations managing the estate of the Kossoff firm, which was forced into bankruptcy in May after creditors claimed it misappropriated more than $8 million from its escrow accounts. Kossoff's refusal to comply with multiple court orders to produce records has "dramatically increased the administrative expense of this estate, which prejudices the interests of the victims of Kossoff’s fraudulent activity," Togut wrote to U.S. Bankruptcy Judge David Jones.
