K
enneth Mattson, a 63-year-old Sonoma real estate mogul, has been arrested and charged with operating a Ponzi scheme. The U.S. Department of Justice alleges that Mattson solicited millions of dollars from hundreds of investors, many nearing retirement, by promising safe investments in limited partnerships that owned real estate. However, the government claims that none of the money was actually invested.

    Mattson allegedly deleted thousands of files relevant to his case after learning of an investigation into his business practices by the U.S. Securities and Exchange Commission last year. The nine-count indictment filed on May 13 accuses Mattson of wire fraud, money laundering, and obstruction of justice.

    Prosecutors say that from 2009 to 2024, Mattson solicited investments from "off-books" investors, including a group that invested in Divi Divi Tree LP, which owned an apartment complex in Riverside County. The majority of these investors used their retirement savings, but never became true owners in the partnership.

    The scheme collapsed when Mattson could no longer raise new investor money to pay existing investors, according to the indictment. Mattson is accused of obtaining $28 million in off-book investments from Divi Divi and another company he controlled.

    In related news, a class action lawsuit was brought against Mattson and his partner Tim LeFever last fall on behalf of people allegedly bilked by them. More than 60 entities associated with the pair declared bankruptcy in August 2024.