Socotra Capital Draws Scrutiny for Ken Mattson Scandal

As Sonoma developer Ken Mattson awaits trial for allegedly defrauding hundreds of local homeowners, one of his firm’s lending partners has come under scrutiny of its own.

Victims of Mattson have pointed out Socotra Capital’s purported role in Mattson’s wide-reaching alleged Ponzi scheme, The Press Democrat reported.

The Sacramento-based lender bankrolled much of Mattson’s shopping spree, wherein KS Mattson Partners acquired 88 properties in and around the city of Sonoma. From 2007 to 2024, Mattson allegedly sold investors fake interests in real estate investment limited partnerships, using victims’ money to fund personal expenses and pay other investors, according to the Securities and Exchange Commission.

Socotra Capital provided Mattson’s firms with more than 100 loans totaling upwards of $180 million, according to the Press Democrat. The loans covered notable local sites including Ravenswood Winery, boutique lodging properties like Cottage Inn & Span and An Inn to Remember, and even chocolate factory Cocoa Planet. Many of those properties are now on the auction block in bankruptcies related to Mattson’s dealings.

Socotra holds liens on 75 properties tied to Mattson’s network, court documents reviewed by the news outlet show. The debt totals more than $100 million. And while the hard-money lender has not been accused of wrongdoing, investors who lost money through Mattson’s alleged fraud want to put a magnifying glass on the firm.

“From Socotra’s website, they proclaim, ‘We’re not like your conventional lenders with strict parameters, slow turnarounds, and unnecessary hoops to jump through,’” Matt Treger, who invested with Mattson over more than 15 years, told the Press Democrat. “As someone whose life savings has been swallowed up, their business model seems clear evidence that parameters and hoops are an essential part of a just system.”

Federal prosecutors noted Socotra’s role in the scandal by referring to it in the May 13 indictment as “Lending Entity 1.” For its part, Socotra denies knowledge of any of Mattson’s actions.

“With regards to KS Mattson [Partners], we had no knowledge or involvement in Mattson’s alleged wrongdoing. Socotra acted appropriately and in accordance with the law at all times,” a company spokesperson told the outlet. “As a secured, first-position lender, all our loans are secured by high-quality real estate, including those related to KS Mattson loans.”

Mattson stands accused of wire fraud, money laundering and obstruction of justice in a nine-count indictment. If convicted, he faces a maximum sentence of 20 years in prison for each count of wire fraud and the obstruction of justice count and 10 years in prison for the money laundering count.

So far, Socotra hasn’t faced legal complaints of its own from Mattson’s investors or regulators.

“In the aftermath of their lending spree, to continue putting profits over the victims in a scheme they enabled and benefitted from would feel morally reprehensible,” Treger said. “My hope is that, as an investor group, we pursue every avenue to determine accountability and recompense… They may be trying to protect their profits, while we as victims are fighting for our lives and what was taken from us.”

— Chris Malone Méndez