Ken Mattson stands accused of a Ponzi scheme that bilked investor clients out of millions of dollars. If prosecutors are right, Mattson’s unrivaled rush on Sonoma real estate over the past decade helped drive that scheme.
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In the minds of many people recruited into real estate purchases by Ken Mattson, his investment business began as a legitimate enterprise several decades ago.
Now it has unraveled, with federal prosecutors accusing the Sonoma resident of “a classic Ponzi scheme,” pointing to evidence of criminal activity by Mattson stretching back at least 16 years.
The partnership at the heart of his real estate empire, LeFever Mattson Inc. — founded with his boyhood friend and longtime business partner, Tim LeFever, is in Chapter 11 bankruptcy. Both Mattson and LeFever have been pushed out of leadership positions.
And Mattson sits in federal custody in San Francisco, charged by a grand jury with a total of nine counts of wire fraud, money laundering and obstruction of justice. He waits for a hearing Wednesday on whether he’ll be allowed to post bail.
Federal prosecutors, in a 22-page indictment unsealed Thursday just after his arrest outside a Napa gym, traced Mattson’s alleged financial crimes back to at least 2009.
That’s a decade after the founding of LeFever Mattson, and a full six years before Ken Mattson began leading a push to gobble up real estate in and around the city of Sonoma — an unrivaled flurry of activity that accelerated over time and resulted in at least 120 purchases there.
Now many of his alleged victims, and people who have watched the odyssey closely, wonder how much of that frenzied acquisition was ever legitimate.
“Did people go into this with the intent of being fraudulent?” said former Sonoma County Supervisor Susan Gorin, who retired in January after representing the area for the past 12 years. “Or did they unintentionally slip into this with acts of desperation? I don’t know that. But the reality is, it happened. And many people have been left without resources.”
Investigators with the U.S. Department of Justice, IRS and U.S. Postal Service accuse Mattson of perpetrating a longstanding fraud that bilked his many clients out of tens of millions of dollars. And as the indictment makes clear, they believe it began before he and LeFever started buying in Sonoma.
“Beginning at a time unknown but no later than in or about May 2009 … MATTSON, knowingly and with the intent to defraud, participated in, devised, and intended to devise a scheme and artifice to defraud as to a material matter, and to obtain money and property by means of materially false and fraudulent pretenses, representations, half-truths, and promises, and by means of omission and concealment of material facts,” the document reads.
When LeFever Mattson purchased a house at 430 W. Napa St. in March 2015, they set in motion a buying spree that would reshape the landscape of property ownership in Sonoma Valley.
The area became ground zero of the LeFever Mattson empire, a California-based portfolio that ultimately boasted well over 200 properties worth an estimated $400 million.
And if federal prosecutors are right — if Ken Mattson recruited new investors to mask lagging rental income and pump enough cash into his accounts to pay off the investors he’d already made promises to, a cycle that proved unsustainable — it was the Sonoma real estate purchases driving the scheme.
‘Deed on, deed off’
Darryl and Jill Hayes made one of those purchases, or part of one, when they bought a 40% share of a house at 230 E. Napa St. nearly a decade ago.
“I think I was very curious about Sonoma,” said Darryl Hayes, a civil engineer who lives in Elk Grove. “To me, it was kind of a cute town. I had worked on some projects there, like the golf course. I remember thinking, ‘Why isn’t this Napa?’”
Mattson, who had been introduced to Hayes by a relative, laid out his vision for the city. He had purchased the Sonoma’s Best deli and was talking about developing a bike trail that ran along a railroad right-of-way. He told Hayes it was important to acquire a handful of key properties in order to develop clout with the City Council, and Mattson was doing it.
“I kind of bought into that,” Hayes said.
In the early weeks of 2021, Mattson came to Hayes with a request. He needed to refinance the loan on 230 E. Napa St., and he asked permission to temporarily remove Darryl and Jill from the grant deed to get a better rate, then immediately re-add them. Mattson took their names off the deed and secured a $1.5 million mortgage from Socotra Capital, a Sacramento-based hard money lender that financed most of Mattson’s Sonoma Valley purchases.