SEC Charges Kenneth Mattson with $46 Million Real Estate Fraud Targeting Retirees
Washington D.C., May 22, 2025 — The Securities and Exchange Commission (SEC) has charged Kenneth Mattson, a San Francisco Bay Area resident and former CEO of LeFever Mattson, with orchestrating a massive $46 million fraud scheme. The SEC alleges that Mattson defrauded approximately 200 investors, many of whom were retired senior citizens from his church community, by selling fake interests in real estate investment limited partnerships. This article delves into the details of the SEC’s complaint, the fraudulent scheme, and the broader implications for investors, particularly retirees.
Understanding the Kenneth Mattson Fraud Case
The SEC’s complaint, filed in the U.S. District Court for the Northern District of California, outlines a sophisticated scheme that allegedly ran from 2007 to April 2024. Mattson, leveraging his position as CEO of LeFever Mattson, a firm that managed legitimate real estate limited partnerships, is accused of selling fictitious ownership interests to unsuspecting investors. These fake interests were not recorded in the company’s legitimate ownership records, leaving investors without actual ownership rights or partnership status.
How the Fraudulent Scheme Operated
Mattson allegedly targeted vulnerable investors. These were particularly retirees. He offered them opportunities to invest in what appeared to be secure real estate limited partnerships. The SEC claims that Mattson encouraged investors to transfer funds from their individual retirement accounts (IRAs). He guided them to self-directed IRAs. This change allowed them to invest in the purported partnership interests. However, these transactions were never documented in LeFever Mattson’s official books, and the investors never received legitimate ownership.
Instead, Mattson allegedly commingled investor funds with his personal and business accounts. He used these funds to:
- Make Ponzi-like payments to earlier investors, creating the illusion of returns.
- Issue false tax records to defrauded investors.
- Misappropriate funds for personal expenses, real estate transactions, and expenses tied to his personal partnership, KS Mattson Partners LP.
This misuse of funds not only deprived investors of their rightful ownership but also jeopardized their financial security, particularly for retirees relying on these investments for their retirement income.
The SEC’s Response and Legal Actions
The SEC has taken decisive action against Mattson, charging him with violating the antifraud and registration provisions of federal securities laws. The agency is seeking a range of remedies to address the harm caused by the alleged scheme.
Remedies Sought by the SEC
The SEC’s complaint requests the following:
- Permanent Injunctions: To prevent Mattson from engaging in similar fraudulent activities in the future, including a conduct-based injunction.
- Disgorgement with Prejudgment Interest: To recover the ill-gotten gains Mattson allegedly obtained through the scheme.
- Civil Penalties: To impose financial penalties for his violations.
- Officer and Director Bar: To prohibit Mattson from serving as an officer or director of a public company.
Additionally, the SEC has named KS Mattson Partners LP as a relief defendant. They are seeking disgorgement of any ill-gotten gains tied to the partnership. This includes prejudgment interest.
Parallel Criminal Charges
In a coordinated effort, the U.S. Attorney’s Office for the Northern District of California has announced criminal charges against Mattson. This parallel action underscores the severity of the allegations and highlights the government’s commitment to holding individuals accountable for defrauding investors.
Protecting Retirees from Investment Fraud
The Mattson case highlights the vulnerability of retirees to investment fraud, particularly schemes involving self-directed IRAs. Retirees, who often rely on their savings for financial stability, are prime targets for fraudsters due to their desire for secure, high-yield investments.
The Risks of Self-Directed IRAs
Self-directed IRAs allow investors to diversify their portfolios by investing in alternative assets like real estate or private partnerships. However, these accounts also carry significant risks, as they are often less regulated and more susceptible to fraud. The SEC’s Office of Investor Education and Advocacy has issued an Investor Alert to help investors recognize and avoid frauds associated with self-directed IRAs.
Tips to Avoid Self-Directed IRA Fraud
To protect themselves, investors should:
- Verify Investment Legitimacy: Confirm that the investment is registered with the SEC or state securities regulators.
- Research the Promoter: Investigate the background of the individual or firm offering the investment, checking for any disciplinary history.
- Demand Transparency: Request detailed documentation, including ownership records and financial statements, before investing.
- Consult Professionals: Seek advice from a trusted financial advisor or attorney before transferring funds to a self-directed IRA.
By taking these precautions, investors can reduce their risk of falling victim to schemes like the one allegedly orchestrated by Mattson.
The Broader Impact of the Mattson Case
The SEC’s action against Mattson sends a strong message to fraudsters who target retail investors, particularly retirees. As Sam Waldon, Acting Director of the SEC’s Division of Enforcement, stated, “The SEC is firmly committed to pursuing those who prey on retail investors and retirees, such as the individuals we allege that Mattson targeted.” This case serves as a reminder of the SEC’s role in safeguarding investors and maintaining trust in the financial markets.
Why Retirees Are Vulnerable
Retirees are often targeted by fraudsters because they:
- Have accumulated significant savings in retirement accounts.
- Seek stable, income-generating investments to support their lifestyle.
- May lack the financial expertise to identify red flags in complex investment schemes.
Fraudsters like Mattson allegedly exploit these vulnerabilities by building trust within communities, such as churches, and presenting themselves as credible investment professionals.
Strengthening Investor Protections
The Mattson case underscores the need for stronger investor protections, particularly for retirees. Regulators, financial institutions, and community organizations can play a role in educating investors about the risks of fraud and providing resources to help them make informed decisions.
Steps to Enhance Investor Education
- Public Awareness Campaigns: Launch campaigns to educate retirees about common investment scams and how to avoid them.
- Community Outreach: Partner with churches, senior centers, and other community organizations to disseminate information about fraud prevention.
- Enhanced Oversight: Increase regulatory scrutiny of self-directed IRAs and alternative investments to detect and prevent fraudulent schemes early.
By prioritizing investor education and oversight, regulators can help protect vulnerable populations from financial predators.
What Investors Can Do Now
Investors who suspect they may have been affected by the Mattson scheme or similar frauds should take immediate action to protect their assets and seek recourse.
Steps for Affected Investors
- Contact a Securities Attorney. The SEC is not likely to get your money back. Contact an experienced securities attorney, like the attorneys at Sallah Astarita & Cox, LLC to review your potential case. You can reach them at 212-509-6544.
- Contact the SEC: Report suspected fraud to the SEC’s Office of Investor Education and Advocacy or file a complaint online.
- Review Financial Records: Examine account statements, tax records, and investment documents for discrepancies or signs of fraud.
- Seek Legal Advice: Consult an attorney specializing in securities fraud to explore options for recovering losses.
- Monitor Accounts: Regularly review retirement accounts and other investments to detect unauthorized activity early.
Taking these steps can help investors mitigate losses and hold fraudsters accountable.
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