‘He's still living in a mansion': Collapse of a Wine Country real estate empire has left deep scars

For nearly a decade, two aggressive real estate investors stirred excitement and suspicion as they amassed an impressive Wine Country real estate portfolio worth nearly $150 million. But then, two years ago, their buying frenzy ground to a halt when one man accused the other in a stunning case of fraud.

A year later, FBI agents arrested Kenneth Mattson outside a gym in Napa, and the U.S. Attorney's Office in San Francisco filed a federal indictment detailing allegations that he'd engaged in "a classic Ponzi scheme."

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Read more: $5 million settlement reached with embattled Wine Country real estate investor

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Also: Ex-clients of Sonoma developer accused of Ponzi scheme describe losing their life savings: ‘Financial murder'

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Related: Feds arrest embattled Sonoma developer suspected of Ponzi scheme that cost investors millions

Now, ahead of a June 15 hearing at a federal court in Oakland, federal prosecutors are negotiating a deal that could send Mattson to prison for a dozen years, if he agrees to plead guilty to wire fraud, according to a notice sent to victims that was shared with the Chronicle and first reported by the Santa Rosa Press Democrat.

Prosecutors have accused Mattson of bilking hundreds of investors, mostly middle income retirees who entrusted him with their life savings, by selling fake interests in real estate companies and properties. Instead of investing the money, authorities claim, Mattson enriched himself with luxury cars and properties, splitting time between a $9.9 million Piedmont mansion and a Sonoma estate worth an estimated $6.8 million.

His longtime business partner Timothy LeFever, who has not been criminally charged, has cast himself as a victim alongside their investors and said Mattson acted alone.

In bankruptcy court, a judge in April confirmed a plan to sell what remains of the Mattson-LeFever properties and distribute the proceeds to creditors and investors, whose losses have been estimated at more than $100 million.

Even before fraud allegations surfaced, some of Mattson's and LeFever's most visible Sonoma Valley properties languished. Properties sat vacant, others went without needed repairs and employees at their businesses complained about missed payments. Josette Brose-Eichar, a Sonoma resident who long felt the Mattson-LeFever business endeavors were not good for Sonoma and helped lead a local movement to track his real estate activities, said they felt vindicated when their suspicions were confirmed, but also crestfallen.

"It hurt the community," Brose-Eichar said. "And it wasn't his money. He took it from people who trusted him."

Now, even as some parcels remain in limbo in the bankruptcy case, some of their most visible properties are coming back to life.

At Cornerstone Sonoma, an open-air marketplace and event venue that had become a ghost town, new owners are bringing retailers back and the gardens are blooming again. Downtown, the Sonoma Cheese Factory, an iconic Art Deco relic of the Italian immigrants who settled in the valley, is under new ownership and drawing visitors for sandwiches, wine and cheese. At Sonoma's Best Mercantile, a deli and wine shop where Mattson once brokered deals and worked out of an office in the back, guests ate sandwiches and ice cream in a back garden.

Last month, bankruptcy filings show that a new buyer snapped up two key Sonoma properties for a combined $6 million, including the General's Daughter, a 19th-century Victorian home linked to General Mariano Guadalupe Vallejo.

But the scandal that roiled small-town Sonoma continues to haunt hundreds of mom-and-pop investors who entrusted Mattson with their life savings.

"We're trying to keep our home, and he's still living in a mansion that he used our money to buy," said Maria Crane, a Santa Rosa resident who with her husband invested hundreds of thousands of dollars with Mattson after being introduced by a friend in 2009.

Mattson, who was released after relatives posted bond on $4 million bail, still lives in town on Castle Road in a 6,000-square-foot estate, though he traded the Rolls Royce he once drove around town for a new GMC Sierra pickup he totaled last year in a crash, and is battling a web of civil lawsuits, bankruptcy and criminal prosecution.

On Thursday, attorneys are expected to ask a federal bankruptcy judge in a Santa Rosa courtroom to help evict the Mattsons from the Castle Road estate. The Mattsons purchased the property through a limited partnership KS Mattson Partners, which was seized in the bankruptcy case and is now managed by third-party attorneys.

In bankruptcy filings, attorneys claimed that Mattson and his wife, Stacy, have declined repeated requests to move out or pay rent - estimated at $20,000 per month - for using the property, which is slated to be sold as part of the effort to repay creditors. According to the filings, attorneys seeking their eviction said the Mattsons refuse to leave, at least in part, because they said they are "very religious" and wanted to attend a local church and Bible study.

In another filing, Mattson and his wife told the court they have a "longstanding caretaker arrangement" that allows them to stay in exchange for providing fulltime maintenance and property management services "in lieu of cash rent," with an annual value of approximately $80,000.

Crane said she and others have flooded the court with letters describing how the collapse upended their lives, forcing some to sell homes and move. One victim, according to court filings, said they now get groceries at a food bank. Others said they were forced to return to the job market in their 70s.

Crane and others said they believe Mattson's legal maneuvers in both the bankruptcy and criminal cases against him are causing unnecessary delays, racking up attorneys fees and siphoning away from sources of money that could eventually go to defrauded investors.

But Mattson's criminal attorney, Randy Sue Pollock, defended her client.

"Mr. Mattson is exercising his legal rights under our constitution," she wrote in an email. "As his attorney I have not engaged in any court delays or obstructions."

Childhood friends, Mattson and LeFever began investing in real estate decades before they came to Sonoma around 2015. Mattson was often the public facing one of the pair, courting people at church and through original investors. They built a large roster of mostly middle and upper middle families who emptied retirement and savings accounts to invest in Mattson and LeFever's real estate companies.

Together and separately, Mattson and LeFever purchased more than 257 properties in 14 California counties worth at least $413 million, using an array of limited liability companies.

In the Sonoma Valley, they built a portfolio worth an estimated $146 million. They took over landmark businesses and historic properties. They purchased prized vacation rentals near the Sonoma Plaza, modest multi-family residences and blighted properties long eyed for development. It was a remarkable real estate foothold in a town of about 10,000 people.

But while they made some local connections, Mattson and LeFever failed to gain widespread support in the community, even as they ran some of the town's most prominent businesses. The Mattsons' conservative politics clashed with Sonoma's largely liberal and gay-friendly community, spurring protests and business boycotts.

And they also allowed some of their properties to fall into disrepair.

A group of concerned citizens including Brose-Eichar formed a nonprofit, Wake Up Sonoma, to track Mattson-LeFever real estate tractions, doggedly searching records and reporting concerns to local officials. The local press chronicled their business activities and community concerns, breaking stories about acquisitions and boycotts.

Then in 2024, in a series of letters, LeFever accused Mattson of running a "secretive scheme" to take investor money for himself instead of putting it in the companies that investors believed they were funding and told investors he'd reported his concerns to federal authorities.

Like many of Mattson's investors, Crane and her husband drained retirement accounts to invest with him. Suddenly, hundreds of investors realized that what they thought was a stable future may have been squandered. One estimate in bankruptcy court reported 525 investor families - mostly spouses and their children beneficiaries.

Authorities would later claim Mattson used money from new investors to pay obligations to earlier ones - a classic Ponzi scheme.

"We probably put his kids through school, we paid for his luxury cars, everything he had, his credit card bills and Botox treatments," Crane said.

Though he claimed to be unaware of Mattson's crimes, LeFever had grown suspicious of Mattson's business dealings long before he reported his partner to the U.S. Securities Exchange Commission, according to court filings detailing his personal notes and letters.

In a 12-page letter from March 2023, LeFever implored Mattson to improve his business practices and stop leaving him "in the dark." LeFever described his concerns about confusing and questionable business transactions, missing money, unpaid bills and disgruntled employees.

"I believe for a long time your actions were casual and secretive, but more recently your actions have become reckless and defiant," LeFever wrote.

In February,

In February, LeFever agreed to contribute about $5 million to a trust fund created in the bankruptcy case to help compensate investors.

On June 15, when Mattson returns to a criminal courthouse in Oakland where he is expected to enter a plea, victims are planning to pack the courtroom. The federal judge has the ultimate say over any punishment, and could opt for a maximum of 20 years for the wire fraud charges alone.

In his letter to Mattson, LeFever encouraged his longtime friend "for more than 50 years" to sit down with him to sort out their business agreements and practices.

"I am confident that our friendship and common sense will get us through this rough patch," LeFever wrote. "If we need anything more than that, I suggest we each look in the mirror and use my increasingly common admonition, ‘We're a hospitality company. Now act like it.'"

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This story was originally published May 17, 2026 at 10:46 AM.