Ken Mattson Associate’s Mother-in-Law Investigated

The fallout from the alleged fraud tied to indicted developer Ken Mattson’s LeFever Mattson firm is getting closer to the embattled developers’ families.

In a new court filing, the unsecured creditors committee representing more than 600 defrauded investors won permission to subpoena the 83-year-old mother-in-law of co-founder Tim LeFever, alleging the now-defunct California real estate firm transferred more than $2.4 million to her in the years leading up to the real estate empire’s collapse, the Mercury News reported. That figure includes more than $1.6 million in the year leading up to LeFever Mattson’s bankruptcy filing.

Judge Charles Novack approved the request the same day it was filed. LeFever’s mother-in-law, 83-year-old Kathleen Hamlin, has now been identified as a litigation target in the ongoing case.

Hamlin lives near LeFever and his wife Amy in Dixon, California. Creditors are looking for recoverable assets — such as indicted developer Ken Mattson’s properties — in the case that prosecutors have described as a long-running Ponzi scheme. Mattson was ordered to surrender the deed to his home in Piedmont earlier this month.

The subpoena seeks documents from Hamlin, her accountants, attorneys and family members, including Tim and Amy LeFever. It also targets a web of affiliated nonprofits, construction firms and limited partnerships connected to the firm’s real estate investment vehicles, which at their peak controlled roughly 200 properties valued at about $400 million. Hamlin has until Jan. 9 to share the documents and until Jan. 30 to appear in court for oral testimony.

Prosecutors allege Mattson siphoned funds from investors into secret accounts for personal use, rather than using the money to invest in real estate on investors’ behalf. LeFever has filed more than 60 claims in the bankruptcy proceedings saying he flagged accounting problems to regulators last year.

The committee and lawyers representing LeFever Mattson entered into mediation with Tim LeFever this month. LeFever has not been criminally charged, while Mattson has pleaded not guilty to nine federal counts including wire fraud, money laundering and obstruction of justice.

Court filings suggest the defrauded investors may ultimately recover between 20 to 40 percent of what they put in. Many were retirees who gave their life savings or retirement funds to LeFever Mattson. Still, many of them haven’t lost hope, and have turned to each other for support, either over text message or in person. Some have even offered their prayers for Mattson, hoping for a “heart change,” the Mercury News reported.

“Sometimes we joke, or we talk about the pain we’ve experienced,” investor Stephen Crane said of his relationships with fellow victims. “But there is ultimately justice. There will be a day when he has to stand before God and acknowledge what he’s done.”

“Ken robbed us of our money. But he can’t rob our joy or our peace,” Crane’s wife Maria added.

— Chris Malone Méndez