Former CEO Accused of $46 Million Ponzi-Like Investment Scheme

The U.S. Securities and Exchange Commission (SEC) has filed charges against Kenneth Mattson, former CEO of real estate investment firm LeFever Mattson, alleging he orchestrated a fraudulent scheme that duped approximately 200 investors, many of them retired senior citizens, out of at least $46 million. 

According to the complaint, LeFever Mattson managed legitimate limited partnerships that invested in residential and commercial real estate. However, from 2007 to April 2024, Mattson allegedly sold fake ownership interests in these partnerships to investors. The fraudulent sales were never documented in legitimate records, meaning victims never gained actual ownership or partnership rights.

Instead, Mattson allegedly commingled new investor funds with his personal and business funds, using the money to make Ponzi-like payments to earlier investors, falsify tax documents, and finance personal expenses, real estate transactions, and expenses connected to his personal partnership, KS Mattson Partners LP.

The SEC complaint further alleges that Mattson encouraged victims to transfer funds from their individual retirement accounts (IRAs) into so-called self-directed IRAs, enabling them to invest in the purported limited partnership interests. These purported sales, however, were never recorded in LeFever Mattson’s official books, and investors did not become actual limited partners.

The lawsuit, filed in the U.S. District Court for the Northern District of California, is pursuing 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.