California Real Estate Executive Arrested for Ponzi Scheme

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Investors express their concerns and anxieties in a courtroom during a Ponzi scheme trial.

News Summary

Kenneth W. Mason, 63, was arrested accused of running a 15-year Ponzi scheme that defrauded investors of nearly $30 million. The SEC is investigating as Mason faces multiple federal charges, including wire fraud and money laundering. Victims, many of whom are retirees, were misled into believing their investments were secure. The case has raised concerns about investor protection in real estate. After his arrest, Mason denied the allegations while authorities search for additional evidence.

California – 63-year-old Kenneth W. Mason, a real estate executive from Sonoma, has been arrested on multiple federal charges related to an alleged 15-year-long Ponzi scheme that defrauded investors of nearly $30 million. Mason, who served as the president of LeFever Mattson, a company based in Citrus Heights, is now facing seven counts of wire fraud, one count of money laundering, and one count of obstruction of justice.

The allegations indicate that Mason solicited investments from hundreds of individuals, including many nearing or already in retirement, promising their funds would be safely invested in “legitimate and safe” real estate partnerships. Instead, Mason is accused of using a convoluted scheme that involved “off-books investors,” directing their money to pay returns to earlier investors rather than investing in the stated properties.

The investigation into Mason’s activities reportedly dates back to between 2009 and 2024. He is alleged to have maintained the fraudulent scheme with new investors’ funds, presenting fictitious returns while concealing actual losses. In several instances, Mason falsely claimed that investment funds were going towards properties, such as an apartment complex, despite investors not being documented as legitimate partners within company records.

Authorities have highlighted that Mason engaged in deceptive practices, like the concealment of the sale of an apartment complex that generated $8 million in proceeds. Even after the sale, Mason continued to solicit new investments related to this property. This illicit operation unraveled when the Securities and Exchange Commission (SEC) initiated an investigation into Mason’s business practices in 2024. In response, investigators allege that he deleted over 10,000 electronic files that were crucial for the investigation.

Acting United States Attorney Patrick D. Robbins has emphasized that Mason’s actions have caused significant financial harm, noting that many victims lost their life savings through his scheme. Prosecutors estimate that he stole at least $28 million from investors through two specific partnerships tied to the fraudulent activities.

If convicted of the charges against him, Mason could face severe penalties, including up to 20 years in prison for each count of wire fraud and obstruction of justice, and 10 years for the money laundering charge. His arrest has brought relief and hope for justice among victims who have lost substantial investments, as they await the legal procedures to unfold.

Following his arrest, authorities conducted searches of Mason’s residences, uncovering additional evidence of financial misconduct. Furthermore, LeFever Mattson has filed for Chapter 11 bankruptcy in the wake of these developments. The investigation remains ongoing, with authorities encouraging other individuals who may have been defrauded to step forward and contribute to the case.

Mason has denied all accusations and pleaded not guilty to the charges. Investigators are also looking to seize several properties owned by Mason in Piedmont and Del Mar if he is found guilty in connection to the case. This incident has raised concerns about investor protection and the potential for similar schemes operating without oversight, prompting calls for increased regulatory scrutiny in the real estate investment sector.