A new wrinkle in the case of a Sonoma County real estate tycoon accused of bilking nearly 200 investors out of $46 million, as it turns out most of his properties were financed by a single lender, raising questions about what they knew.
One of the bigger scandals currently developing up in wine country is the case of Sonoma County developer Kenneth Mattson, who was arrested by the feds in May and charged with a sweeping range of fraudulent real estate deals. Mattson had purchased nearly 90 properties across wine country, but his federal indictment called his real estate empire a “a classic Ponzi scheme,” wherein Mattson allegedly “offered and sold fake ownership interests” in properties to people who never actually received the ownership interests they paid for. Interestingly, most of Mattson’s investors were older retired people he recruited at church groups, and for good measure, Mattson and his wife were well-known anti-LGBTQ crusaders.
The Santa Rosa Press Democrat has been doing some serious digging through bankruptcy and property records, now that Mattson is being forced to sell his properties at fire-sale prices. They discovered that one property was purchased in partnership with an investment company amusingly named Tony’s Salami & Cheese Fund I. Perhaps less amusingly, that company just happens to share the exact same Sacramento address as a lender known as Socotra Capital. And as the Press Democrat reports, this is raising questions about the degree to which Socotra Capital was aware of Mattson’s alleged Ponzi scheming.
After all, according to prosecturos, Socotra Capital was a crucial part of Mattson’s real estate purchasing scheme. The Press Democrat reports that Socotra gave Mattson's firm "at least 92 loans to KS Mattson Partners starting in 2017." Now that Mattson is in fire-sale mode, the Press Democrat adds that “Socotra now holds deeds of trust on 75 properties held by either KS Mattson Partners or entities belonging to LeFever Mattson Inc,” and that “The loans on those properties total $102.3 million.”
Socotra Capital strongly maintains their innocence in the matter.
“With regards to KS Mattson, we had no knowledge or involvement in Mattson’s alleged wrongdoing. Socotra acted appropriately and in accordance with the law at all times,” a Socotra spokesperson told the Press Democrat. “As a secured, first-position lender, all our loans are secured by high-quality real estate, including those related to KS Mattson loans.”
We should note that Socotra Capital does not face any charges, and were not named in Mattson’s federal indictment (rather, they were named as “LENDING ENTITY 1,” as the feds generally describe people and parties anonymously in their indictments when those parties are not currently suspected of wrongdoing).
Meanwhile, Mattson is currently out of custody on $4 million bail, and his preliminary court proceedings are still getting started.
Related: Wine Country Developer Arrested by Feds, Charged With Fraud and Money Laundering [SFist]
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