California Developer Kenneth Mattson Charged in $46M Ponzi Scheme

Kenneth Mattson, a 63-year-old real estate developer from Sonoma, California, has been arrested and indicted on multiple federal charges for allegedly orchestrating a Ponzi scheme that defrauded approximately 200 investors out of $46 million over 17 years.

Allegations of Fraudulent Investment Scheme

Mattson, president of LeFever Mattson, is accused of soliciting investments from individuals, many of whom were retirees or nearing retirement, under the pretense of investing in legitimate real estate partnerships. However, prosecutors allege that these investors were "off-books" and never gained ownership in the partnerships. Instead, Mattson allegedly used new investor funds to pay returns to earlier investors, a hallmark of a Ponzi scheme.

"Instead of delivering the investment returns he promised, Mr. Mattson is charged with cheating these investors out of their hard-earned money and, in many cases, out of their life savings," said Acting United States Attorney Patrick D. Robbins.

Charges and Legal Proceedings

The federal indictment includes seven counts of wire fraud, one count of money laundering, and one count of obstruction of justice. If convicted, Mattson faces up to 20 years in prison for each count of wire fraud and obstruction of justice, and up to 10 years for the money laundering count.

Mattson was arrested by FBI agents in a Napa parking lot and made his initial court appearance in San Francisco, where he pleaded not guilty. Prosecutors have requested that he remain in custody, citing concerns about his access to hidden assets and potential flight risk.

SEC Civil Complaint

In addition to criminal charges, the Securities and Exchange Commission (SEC) has filed a civil complaint against Mattson and his company, KS Mattson Partners LP. The SEC alleges that Mattson sold fake ownership interests in real estate investment partnerships and used investor funds for personal expenses and to make Ponzi-like payments. The complaint also accuses Mattson of providing false tax documents to investors and misappropriating funds from self-directed IRAs.

Community Impact and Response

Many of Mattson's alleged victims were members of his church community, whom he convinced to invest their savings in his real estate ventures. The scheme's collapse has left numerous investors facing significant financial losses. Local residents had raised concerns about Mattson's business practices for years, leading to increased scrutiny and eventual legal action.

Ongoing Investigations

The FBI and SEC continue to investigate the full extent of Mattson's alleged fraudulent activities. Authorities have encouraged anyone who believes they may have been a victim to come forward. The case underscores the importance of due diligence and regulatory oversight in investment opportunities.