Federal prosecutors charged a San Francisco real estate investment manager with executing a Ponzi scheme that cost investors at least $46M.
Kenneth Mattson was scheduled for his first hearing Friday at the Phillip Burton Federal Building in San Francisco.
Kenneth Mattson, the former CEO of LeFever Mattson, is charged with defrauding approximately 200 investors by selling fake ownership stakes into apartment properties that he partially owned. The scheme lasted from 2007 to 2024 before ultimately unraveling after he failed to find new investors.
“Mr. Mattson will now be held to account on charges of perpetrating a scheme that he kept afloat only by using new investors’ money to pay obligations to earlier investors — a classic Ponzi scheme,” acting U.S. Attorney Patrick Robbins said in a statement.
Bisnow was unable to reach Mattson for comment early Friday. The indictment was filed under seal on May 13 in the San Francisco Division of the U.S. District Court for the Northern District of California.
The U.S. Attorney’s Office announced the charges against Mattson, 63, on Thursday. In the nine-count indictment, prosecutors allege that Mattson spent more than a decade convincing investors to hand over cash to form limited investor partnerships with his firm for a piece of ownership in Mattson’s portfolio.
In just one of several alleged fraud schemes, Mattson allegedly raised $24M between 2019 and 2024 from at least 75 investors for a fund that was first established in 2002 and was meant to acquire and manage multifamily properties. At least $10M of that cash was not invested into any assets but instead used to pay other customer distributions and to cover fees, maintain minimum account balances and make other “off-book” payments, prosecutors allege.
“The scheme collapsed when Mattson was no longer able to raise new investor money to pay existing investors,” the indictment alleges.
He is charged with money laundering, obstruction of justice and seven counts of wire fraud, with penalties including 20 years in prison and millions of dollars in fines and fees. Mattson was scheduled to make his initial court appearance Friday morning in front of U.S. Magistrate Judge Alex G. Tse in San Francisco.
The obstruction charge stems from an allegation that Mattson deleted more than 10,000 files from his computer after learning that he was under investigation by the Securities and Exchange Commission.
Mattson owned all or part of roughly 50 properties in Northern California through LeFever Mattson, which declared bankruptcy earlier this year. The multifamily projects ranged from large apartment communities to 20-unit properties, according to the indictment and bankruptcy records.
Seven apartment buildings with a combined 279 units and a 23K SF retail plaza owned by LeFever Mattson were scheduled for auction in February, the Sacramento Business Journal reported. None of the defrauded investors ever had any ownership of any of the properties, prosecutors allege.
Separately, the SEC has charged Mattson with violating securities laws, and it is seeking to claw back funds and obtain permanent injunctions against Mattson to keep him from engaging in certain business.
“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,” Sam Waldon, acting director of the SEC’s division of enforcement, said in a statement. “The SEC is firmly committed to pursuing those who prey on retail investors and retirees.”
