K
en Mattson and his wife Stacy live rent‑free in a 6,000‑square‑foot gated estate on Castle Road, overlooking Sonoma, while hundreds of investors who funded his real‑estate deals are losing monthly income and face the possibility of losing their retirement savings. The investors, many of whom first met Mattson in church circles and welcomed him into their homes for financial pitches, feel deep resentment at the stark contrast between the Mattsons’ luxurious lifestyle and their own financial losses.
The bankruptcy of KS Mattson Partners (KSMP), now administered by court‑appointed neutral Robbin Itkin, has moved to pursue all legal remedies to recover the Castle Road property, including eviction. Itkin has asked U.S. Bankruptcy Judge Charles Novack to waive the automatic stay that currently freezes most of the company’s finances. Lawyers for KSMP argue that it would be unconscionable for the Mattsons to continue living in a multimillion‑dollar home while victims wait for restitution.
The 50‑acre estate, valued at over $6 million, is owned by KSMP, not by the Mattsons. Prosecutors accuse Ken Mattson of orchestrating a classic Ponzi scheme; he was indicted in May on nine counts of wire fraud, money laundering, and obstruction of justice. Before KSMP declared bankruptcy in June, its assets were allegedly used as instruments of that fraud. The courts are working to maximize KSMP’s holdings for potential recovery by defrauded investors, and the Castle Road property is among the most valuable assets. Hogan Lovells attorneys in Los Angeles estimate the home could command up to $22,000 per month on the open market; they claim the Mattsons owe more than $240,000 in unpaid rent.
A parallel bankruptcy case, filed nine months earlier by LeFever Mattson Inc.—the company Ken Mattson co‑founded with former partner Tim LeFever—has sold dozens of properties. Proceeds are being placed into a trust to compensate wronged investors. The same process is underway for KSMP’s bankruptcy, but the Mattsons’ occupation of the Castle Road house hampers brokers from photographing and staging the property, according to Hogan Lovells. The motion states the Mattsons have no legal right to occupy the property, have never paid rent, and have refused to vacate to facilitate its sale.
The Castle Road estate is adjacent to two other KSMP properties: a 30‑acre vineyard listed for $2.5 million and a 5,300‑square‑foot home on over 80 acres listed for $3.5 million. Nearby, on Rachael Road, a house occupied by the Mattsons’ adult daughter is also not paying rent, per the KSMP filing. The company seeks access to all four sites and is taking steps to remove the daughter as well. A real‑estate broker approved by Judge Novack has contacted two buyers interested in purchasing all four properties.
These developments are part of a flurry of recent court filings across multiple bankruptcies and Mattson’s criminal case, which are tightening the legal net around the Sacramento County native. On the same day KSMP initiated action on the Castle Road properties, U.S. District Judge Jon Tigar denied Mattson’s request to modify the terms of his bail. When Mattson was charged in May with seven counts of wire fraud and one count each of money laundering and obstruction of justice, a magistrate judge set his bond at $4 million, secured largely by two real‑estate properties, including a stately house on La Salle Avenue in Piedmont owned by Stacy Mattson. Ken Mattson’s attorneys argued that the couple should be allowed to sell the property and use the proceeds to fund his legal defense, framing it as a Sixth Amendment right to counsel. Judge Tigar denied the request twice, citing Mattson’s failure to demonstrate an inability to pay his attorneys and the lack of evidence that the bankruptcy court would approve the sale of the La Salle property, which has messy ownership records. In his most recent order, Tigar wrote that “the Court finds no basis to conclude that the Sixth Amendment prevents a court from imposing financial conditions for pretrial release that encumber assets that a defendant might otherwise use to hire counsel.” Mattson’s criminal lawyer, Randy Sue Pollock, has not indicated whether she will challenge the ruling.
On May 22, 2024, following his arrest by FBI agents, Mattson handed over his laptop at the Oakland offices of his former law firm, Fennemore Law. Prosecutors later discovered that digital files had been deleted. A grand jury has subpoenaed Fennemore for copies of those files and for any records that might identify the firm’s employee responsible for the transfer. Mattson seeks to quash the subpoena, arguing that the grand jury order was issued primarily to gather evidence for pending litigation—a misuse of the legal tool, Pollock wrote. A hearing is scheduled for December 19 in Judge Tigar’s courtroom.
Investor disputes are also fracturing the front that once united those who lost money. On October 7, two family trusts that had invested in Live Oak Investments LP—a partnership under LeFever Mattson—announced their intent to wrest control of Live Oak from the parent company and replace LeFever Mattson’s legal counsel with their own, Thomas P. Kelly III. They accused LeFever Mattson of diverting more than $2.3 million from Live Oak accounts after the sale of a Vacaville apartment complex in September 2024, without paying any of the fund’s other partners. Forensic accountant Bradley Sharp, now effectively running LeFever Mattson, countered that Live Oak’s move would violate the automatic stay established under the bankruptcy. The two family trusts proceeded anyway. Bankruptcy Judge Novack sided with LeFever Mattson in a November 20 order, and Kelly appealed on behalf of Live Oak Investments ten days later.
Meanwhile, the Chase Family Trust filed its opposition to the settlement agreement the creditors committee reached with Socotra Capital, the private lender that financed at least 77 of Mattson’s real‑estate purchases. The settlement gave Socotra the right to foreclose on 22 of those properties, including an office park at 414 W. Napa St. in Sonoma, which Dr. John Chase and his wife Susan helped purchase. The Chase Trust, estimating losses of $6 million to $11 million, argued that LeFever Mattson and the committee should pursue litigation rather than “look the other way.” A week later, the Chases filed another opposition, this time against the LeFever Mattson bankruptcy liquidation plan, claiming the plan’s disclosure statement was inadequate and that the bankruptcy had already incurred an estimated $25 million in professional fees.
A group of investors representing at least 16 households filed a November 12 challenge to the procedures for settling investor claims. They are collectively known as the “Tillman Opposing Investors,” after Ruth Tillman, a former LeFever Mattson employee and investor in Sonoma Valley. The Tillman group wants the liquidation plan guiding compensation to be voted on before individual payouts are offered. They argue that proceeding with both steps in parallel would “put the cart before the horse” and likely result in wasted effort. The disagreement centers on the payment formula endorsed by the creditors committee, which the Tillman group says favors long‑time, “legacy” LeFever Mattson investors at the expense of newer ones, because it subtracts dividend payments received in a recent seven‑year period but ignores earlier monthly payments. The creditors committee justified focusing only on those seven years because older bank records had been purged. Attorneys for the committee and the bankrupt companies filed a rebuttal on November 25, arguing that investors should see what’s slated to come to them before voting on the plan and noting that the hard work of calculating has already been done. They estimated that breaking up the claims process would delay final distributions by more than three months.
These overlapping legal battles—bankruptcy proceedings, criminal prosecutions, asset recoveries, and investor disputes—are tightening the constraints on Ken Mattson and his wife, while the investors who once trusted him are fighting to reclaim their losses.
