🔍 The Scheme Unveiled
In a move that has shocked the investment community, the SEC has charged Kenneth Mattson, the former CEO of LeFever Mattson, with orchestrating a multimillion-dollar fraud. From 2007 to April 2024, Mattson allegedly sold fake ownership interests in legitimate real estate partnerships to around 200 unsuspecting investors. Many of these investors were retired senior citizens Mattson met through his church community.
According to the SEC, the fraudulent investments were not recorded in the company’s legitimate records. Instead, Mattson allegedly mixed new investor funds with his personal and business funds to make Ponzi-like payments, creating an illusion of legitimate returns. He used the commingled funds for personal expenses and other real estate transactions instead.
📊 The Financial Tricks
The complaint details how Mattson misled investors by providing false tax records and persuading them to transfer their retirement savings into self-directed IRAs. These IRAs were then used to purchase the bogus limited partnership interests Mattson was offering.
“Mattson lied to hundreds of individual investors, many of whom were retirees investing their hard-earned savings, and did not actually sell them the ownership interests that he promised,” said Sam Waldon, Acting Director of the SEC's Division of Enforcement.
The SEC alleges that these sales, much like the investments, were not documented in the company’s records. As a result, the investors never became true limited partners.
⚖️ The Legal Fallout
The SEC’s complaint, filed in the U.S. District Court for the Northern District of California, charges Mattson with violating antifraud and registration provisions of federal securities laws. The SEC is seeking a range of penalties, including permanent injunctions, disgorgement of ill-gotten gains, civil penalties, and an officer and director bar.
In a parallel action, the U.S. Attorney’s Office for the Northern District of California has also announced criminal charges against Mattson. The SEC’s investigation was led by a team in the San Francisco Regional Office, who worked alongside the FBI and the U.S. Attorney’s Office.
