Federal Fraud Charges, SEC Violations Unsealed Against Ken Mattson

Bay Area developer and evangelical zealot Kenneth Mattson stole from Peter to give to Paul, federal prosecutors claim.

FBI agents arrested Mattson in a Napa parking lot Thursday morning after a federal grand jury indicted him for allegedly defrauding about 200 investors — mostly senior citizens — out of $46 million over 17 years, according to court documents unsealed yesterday. Securities and Exchange Commission investigators meanwhile filed suit to freeze Mattson’s assets and stop him and his company, KS Mattson Partners, from doing business in California.

U.S. Attorney for the Northern District of California Patrick Robbins described Mattson’s real estate business as “a classic Ponzi scheme” in a statement Thursday.

“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,” Robbins said.

Mattson, who did not immediately respond to a request for comment, was held in police custody overnight pending a court appearance in San Francisco Friday morning and will remain in detention until his next hearing set for May 28, a spokesperson for Robbins told The Real Deal.

Mattson had a stony stare in his first appearance Friday and pleaded not guilty, The Press Democrat reported.

Prosecutors are asking for Mattson to be held without bail while he awaits trial, citing the “serious” risk of flight and potential danger he poses to the public.

The 63-year-old has been dogged by FBI agents for months after the agency put out a call for tips in February. He came under scrutiny after three law firms filed a class action suit against him last year alleging Mattson and his former business partner, Timothy LeFever, used a “complex web of corporate entities” to trick retirees into making under-the-table investments in their $400 million real estate empire.

“The last two years have been a nightmare,” one 73-year-old anonymous victim wrote in a statement filed in court Friday.

Over a series of conversations at her kitchen table, Mattson convinced the victim and her husband to invest most of their savings and her father’s retirement account into his subterfuge, she wrote.

“We now feel foolish, gullible and guilty but Ken is a very smooth talker,” the victim wrote. “The promised money came regularly until it suddenly stopped in the spring of 2024.”

She’s one of about 200 small investors prosecutors claim have been victimized by the scheme. And the number may grow as further details about Mattson’s business emerge, according to the indictment.

Mattson listed his 11,800-square-foot Tudor home at 62 Farragut Avenue in Oakland Hills last year for $9.9 million, but it hasn’t sold. He bought it for $3 million in 1995.

The developer is facing nine counts of wire fraud, money laundering and obstruction of justice. If convicted, the charges carry a penalty of up to 20 years in prison, plus restitution payments and fines totaling more than $2 million, according to court documents.