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Investors Sue Sonoma Developers for Fraud, Elder Abuse

Developer Ken Mattson met the elderly couple during a Bible study in Sonoma and convinced them to sell their long-time family home to him and invest in it.

Now Elizabeth and Scott Walker, as well as five other clients, are suing the embattled developer and his partner, Timothy LeFever, for the loss of their life savings, the San Francisco Chronicle reported.

The lawsuit, filed in federal court in San Francisco, adds to the growing body of complaints against Mattson and LeFever, who are embroiled in lawsuits with each other and other investors, and under scrutiny from the FBI, the Securities and Exchange Commission and the Internal Revenue Service.

While other investors have filed their own lawsuits, most have not sued LeFever.

The lawsuit against Walker names both developers and seeks class-action status, meaning it could include all of Mattson and LeFever’s clients from the past 24 years.

The investors included teachers and lawyers, and the savings ranged from “high five figures to several million dollars,” according to the lawsuit.

According to public documents cited by the Chronicle, LeFever and Mattson used investor money to build a California real estate portfolio worth more than $400 million.

The Walkers and five other clients sued the Sonoma-based real estate developers and several of their companies, accusing the men of fraud, elder abuse and other unfair financial practices.

The lawsuit describes how Mattson offered clients regular monthly payments from their real estate investments, plus additional payments upon the sale of the properties due to their appreciation in value.

The payments, the lawyers wrote, “maintained a facade that masked the growing disarray and overgrowth of the program until its demise” earlier this year.

When the dust settled, the Walkers had lost more than $4 million, including the Manhattan Beach home that Elizabeth Walker’s grandfather had bought in 1939 and used as a summer retreat for five generations.

“It’s like a friend stabbing you in the back,” Walker, 68, who now lives in Colorado with her husband, told the Chronicle. “It’s getting worse.”

Mattson’s attorney was not available for comment, and LeFever’s attorney did not respond to the newspaper’s request for comment.

Plaintiffs’ attorneys have already identified “hundreds” of potential victims, said Blair Kittle, an attorney with the Burlingame-based Cotchett, Pitre and McCarthy law firm, one of three law firms suing Mattson and LeFever.

Part of the problem, he says, is that Mattson did not properly document many customer transactions.

“We’re still figuring that out,” Kittle told the Chronicle. “The records weren’t kept properly. So the people we know about are just the ones who organized themselves to get together (to sue the developers). … It’s hundreds. So we expect there will be more.”

Last month, Mattson and LeFever, owners of LeFever Mattson Property Management, exchanged lawsuits on the same day, each accusing the other of financial misconduct. The two men were friends in grade school and were best men at each other’s weddings.

In May, Mattson put his Julia Morgan-designed mansion at 62 Farragut Avenue in Piedmont Oakland on the market for $9.9 million after the FBI raided his Sonoma County home and accused him of defrauding investors.

— Dana Bartholomew

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