Records: Arbitrator in high-profile SAPD, BCSO discipline cases intended to defraud creditors during past bankruptcy

SAN ANTONIO – An arbitrator who has decided several high-profile San Antonio and Bexar County first responder discipline cases in recent years is under scrutiny after federal courts ruled he intended to defraud creditors during a previous bankruptcy filing, KSAT Investigates has confirmed.

An attorney for fired Bexar County Sheriff’s Lieutenant Roxanne Mathai said the county failed to provide an impartial and objective arbitrator by allowing Thomas Cipolla to oversee Mathai’s August 2021 arbitration hearing.

Cipolla, an Austin-based attorney, was picked at the time from the county’s pool of approved arbitrators who are called upon in contested discipline cases.

Mathai’s attorney told KSAT Cipolla shouldn’t have been on that approved list due to the personal financial issues in his background.

Federal court records from the Austin Division of the Western District of Texas show Cipolla attempted to claim a condominium he owned on South Padre Island was exempt from his creditors during a 2009 personal bankruptcy.

At the time Cipolla filed for Chapter 7 bankruptcy in May 2009 he had more than $314,000 in unsecured debt, federal records show.

The attorney had $17.67 spread across three bank accounts as well as a fourth bank account that was overdrawn at the time of his bankruptcy filing, records show.

The condo in question was purchased in early 2000 by Cipolla, who borrowed against a home he owned in St. Louis, Missouri.

Although Cipolla contended the condo’s $76,000 in equity was exempt from his creditors under Texas law, multiple federal courts saw the situation differently, since the property was purchased with funds borrowed against the Missouri property.

After a trustee in Cipolla’s bankruptcy case objected, the bankruptcy court ruled against Cipolla, stating that as a licensed attorney, he must have known the bankruptcy implications of both states’ homestead exemptions, court records show.

Cipolla repeatedly appealed the decision, causing the case to be reviewed at several levels of the federal court system multiple times, records show.

Although a senior state district judge, also based in Austin, ruled it was unfair to assume Cipolla had knowledge of bankruptcy and homestead laws, the judge concluded that Cipolla acted “with the intent to hinder, delay, or defraud a creditor,” records show.

After Cipolla appealed to the United States Court of Appeals for the Fifth Circuit, the panel in late 2013 affirmed that there was “sufficient circumstantial evidence supporting the bankruptcy court’s ultimate order that Cipolla acted with intent to defraud.”

“Mr. Cipolla engaged in a pattern of profligate spending. He was up to his eyeballs in debt and I think the courts looked at some of his filings and found that he was motivated by a desire to defraud creditors and avoid some of the consequences of his financial irresponsibility,” said Mathai’s attorney, Mark Anthony Sanchez.

Sanchez provided the court with a thorough timeline of Cipolla’s bankruptcy history in a filing submitted earlier this year in Mathai’s federal civil rights lawsuit.

Attorney Mark Anthony Sanchez walks into federal court earlier this month. (KSAT)

The retaliatory discharge suit, filed in December against BCSO and Sheriff Javier Salazar, seeks to get Mathai reinstated to the agency.

“The lingering questions that I see: was Mr. Cipolla making a decision based on an objective review of the record, or was he motivated by greed or desperation to rule for the county in order to maintain his standing as an arbitrator and receive additional appointments?” asked Sanchez.

Cipolla, who spoke to KSAT via telephone for this story, asked that he not be quoted directly.

He said he certainly had no intent to try and hide the asset from his creditors and although he disagreed with the courts’ decisions on the matter, he was running out of appeals.

Cipolla confirmed he wound up having to sell the condo to help satisfy his debts.

He said his past financial issues absolutely do not impact his ability to be an impartial third-party arbitrator.

KSAT found no evidence that Cipolla was implicated in any professional misconduct or subject to any professional discipline in connection with his 2009 bankruptcy case.

What it could mean for Mathai?

Mathai was dismissed from BCSO in May 2021, months after pictures and videos she posted to social media showed her outside the United States Capitol during the deadly January 6 insurrection.

Although Mathai never went inside the Capitol building and was not formally accused of criminal wrongdoing by any law enforcement agency, she was terminated for conduct unbecoming an officer and for failing to report crimes.

Cipolla was later chosen to oversee Mathai’s two-day arbitration hearing in August 2021.

Then-BCSO Lt. Roxanne Mathai made several social media posts showing her outside the U.S. Capitol building on January 6, 2021. (KSAT)

Months later, in December 2021, Cipolla upheld Mathai’s termination, noting that Mathai should have known she was observing illegal activity and had violated BCSO rules by not reporting what she had seen that day.

Sanchez filed suit in federal court on behalf of Mathai a year later.

Mathai is requesting back pay, reinstatement to BCSO and “equitable relief,” Sanchez said.

Mathai’s union attorney, Morris Munoz, provided a signed declaration for the court in March.

In it, Munoz stated that he would have objected to Cipolla being appointed arbitrator in Mathai’s discipline case if he had known about Cipolla’s past financial issues.

Munoz said Cipolla should have disclosed his prior bankruptcy and that federal courts found he intended to deceive creditors.

“That’s a pretty serious situation that he caused for himself,” Munoz told KSAT, after a court hearing in Mathai’s case earlier this month.

KSAT found no evidence that approved arbitrators are required to make these sorts of disclosures.

Munoz referred additional questions from KSAT to the American Arbitration Association (AAA), which supplies the city of San Antonio and Bexar County with the pool of possible arbitrators for contested discipline cases.

Officials with AAA did not respond to multiple calls and emails seeking comment for this story.

Cipolla told KSAT via telephone he is scheduled to hear arbitration cases in Bexar County on future dates.

Larry Roberson, chief of the Bexar County District Attorney’s Office Civil Division, confirmed Cipolla was preliminarily named as the arbitrator in some upcoming cases.

“However, we are reviewing this issue to determine whether it is appropriate since the arbitrator in question is not on the current list of approved arbitrators under the new Collective Bargaining Agreement,” Roberson said via email, referring to the CBA between the county and the Deputy Sheriff’s Association of Bexar County that went into effect in February 2022.

The county was unable to provide a list of past discipline cases in which Cipolla served as the arbitrator.

The federal judge overseeing Mathai’s suit said in court earlier this month that Sanchez would have to reach a high bar to successfully get records detailing Cipolla’s past financial issues entered as evidence.

The judge on May 15 denied a motion from Bexar County to dismiss Mathai’s suit, federal court records show.

Cipolla, notably, was the arbitrator for the case of a San Antonio fire captain who was returned to duty six years after he was terminated amid allegations he worked a second job while collecting line-of-duty injury benefits.

Cipolla, in March 2018, ruled that even though SAFD Captain Thomas Caldwell violated a department rule pertaining to engaging in outside employment while on injured leave, his actions warranted a 15-day suspension instead of a termination.

Cipolla’s ruling, also called an “award,” was challenged by city officials and Caldwell’s possible reinstatement dragged on for years longer.

Caldwell was reinstated to SAFD in 2021.

In June 2020, Cipolla ruled that one of the indefinite suspensions of a San Antonio police officer Matthew Luckhurst should remain in place, effectively ending the troubled officer’s SAPD career.

Luckhurst, who once admitted to giving a feces sandwich to a homeless man, received a second indefinite suspension after internal affairs investigators said he defecated in a bike patrol toilet and then spread a brown substance on the seat, giving the appearance that it had fecal matter on it.

Former SAPD officer Matthew Luckhurst during his arbitration hearing in early 2020. (KSAT)

In upholding the termination, Cipolla called the prank “blatantly offensive, revolting, disgusting, and demeaning.”

Arbitrators typically oversee two to four days of testimony in contested discipline cases, and then after receiving written briefs from each side will issue an award that contains a ruling on the case.

Cipolla was paid $4,200 for overseeing one of his previous cases here, records viewed by KSAT show.