A man who ended up with $1.5 million in funds from a bankrupt title insurance company has surrendered his law and CPA licenses Robert Bailey Smith IV, who paid pay the funds, drew no jail time in the case, but agreed to surrender his credentials.Smith was an adviser in the LandAmerica Financial Group bankruptcy case because of his involvement in a scheme in which Richmond attorney Bruce Matson, bankruptcy trustee, emptied $3.2 million from the wind-down account for LandAmerica. Smith received $1.5 million from that account.
Matson is serving a 44-month sentence in federal prison to which he was sentenced in November. He pleaded guilty to obstructing an investigation into the handling of the funds. Smith faces no further legal action.
Local press coverage said Matson had been praised for the amounts he had recovered for creditors. But the case was reopened and a new trustee appointed after it was discovered money ended up in personal accounts of Matson, Smith and their wives. The money had been initially set aside to help Matson with expenses in the case and Matson told a judge the money had been accounted for
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, accessing the funds multiple times. He also manipulated the budget for the post-bankruptcy wind-down period so he could divert residual funds to himself and others after the case closed when he would no longer be subject to scrutiny. He disguised the amounts needed for-wind down and setup up language to pretend he had authority to pay bonuses from the funds
