SEC Charges Ex-CEO With Operating $46M Ponzi-Like Scheme Targeting Retirees
The U.S. Securities and Exchange Commission charged San Francisco Bay Area resident Kenneth Mattson, the former chief executive officer and chief financial officer of real estate investment business LeFever Mattson, with defrauding approximately 200 investors of at least $46 million by selling them fake interests in real estate investment limited partnerships. Many of these investors were retired seniors Mattson met through his church community.
According to the SEC’s complaint, Citrus Heights, Calif.-based LeFever Mattson managed legitimate limited partnerships that invested in residential and commercial real estate, and that were owned by a set of real investors. From approximately 2007 to April 2024, Mattson allegedly offered and sold fake ownership interests in these limited partnerships to defrauded investors.
Mattson took deceptive steps to hide his fraudulent scheme from people associated with LeFever Mattson, including by using a personal post office box to receive documents from investors, receiving investor funds and sending purported distributions from a bank account in the name of LeFever Mattson that only Mattson could fully access, and instructing his personal assistant not to discuss the defrauded investors with anyone else at LeFever Mattson.
According to the complaint, the fake sales were not reflected in the legitimate records of ownership, and investors who purchased the fake interests never became actual limited partners or received ownership rights. Instead, Mattson allegedly commingled new investor funds with personal and business funds and used the commingled funds to make Ponzi-like payments, gave defrauded investors false tax records, and misappropriated investor funds to pay for personal expenses and real estate transactions and expenses related to his personal partnership, KS Mattson Partners LP.
The complaint further alleges that Mattson solicited investors to transfer funds from their individual retirement accounts to so-called self-directed IRAs, enabling them to invest in the purported limited partnership interests Mattson offered and sold, Divi Divi LP. These purported sales were not recorded in LeFever Mattson’s books and records, and these investors did not become actual limited partners.
LeFever Mattson discovered Mattson’s misconduct in late 2023. In around April 2024, following an internal investigation, Mattson resigned from his positions as CEO and CFO, although he remains a significant owner of the company. Later, in September 2024 and October 2024, LeFever Mattson and all of its affiliated limited partnerships filed for Chapter 11 bankruptcy protection.
“As our complaint alleges, Mattson lied to hundreds of individual investors, many of whom were retirees investing their hard-earned savings, and did not actually sell them the ownership interests that he promised,” said Sam Waldon, acting director of the SEC’s Division of Enforcement. “The SEC is firmly committed to pursuing those who prey on retail investors and retirees, such as the individuals we allege that Mattson targeted.”
The SEC’s complaint, filed in the U.S. District Court for the Northern District of California, charges Mattson with violating the antifraud and registration provisions of the federal securities laws. The SEC, demanding a trial by jury, is seeking permanent injunctions, including a conduct-based injunction, disgorgement with prejudgment interest, civil penalties, and an officer and director bar. The complaint also names KS Mattson Partners LP as a relief defendant and seeks disgorgement of its ill-gotten gains with prejudgment interest.
In a parallel action, the U.S. Attorney’s Office for the Northern District of California today announced criminal charges against Mattson.
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