Ken Mattson Cleared for Release After FBI Raid

Indicted Sonoma real estate developer Ken Mattson has been released on bail after an emotional court hearing between victims, prosecutors and defense attorneys.

U.S. District Court judge Alex Tse cleared Mattson for release on $4 million bail on May 28 after about 70 investors packed the courtroom in San Francisco and faced the man they say defrauded them of tens of millions of dollars, The Press Democrat reported.

Mattson was apprehended by Federal Bureau of Investigation agents outside a Napa gym on May 22 after a yearlong investigation. He was indicted on seven counts of wire fraud, one count of money laundering and one count of obstruction of justice.

Federal authorities allege Mattson accepted money from about 200 people who believed they were investing in assets under his real estate holding company LeFever Mattson. Most of the victims were senior citizens who invested their retirement savings in the fraudulent operation.

Prosecutors say Mattson and his former business partner Tim LeFever allegedly used these funds to build a real estate portfolio worth more than $400 million with at least 120 properties in the Sonoma area. Mattson then allegedly used the money from the new investors to pay existing investors rent they were owed. Unsealed court documents claim Mattson defrauded the investors out of $46 million over 17 years.

“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,” Patrick Robbins, U.S. Attorney for the Northern District of California, said in a statement, calling it “a classic Ponzi scheme.”

The developer was released after putting down $200,000 in cash and two properties, one in Piedmont and one in Reno, one owned by his wife Stacy and the other by family associates Jennifer and Michael McCarthy.

Mattson will be monitored by GPS during his release and is not allowed to leave the Northern and Eastern Districts of Northern California. He was deemed a flight risk and must surrender all passports, and he isn’t permitted to possess any firearms or make any transactions over $5,000 without notifying the court.

Mattson will have his first trial appearance June 6.

— Chris Malone Méndez