Miller Barondess Files Lawsuit Alleging Attorney and Law Firms Enabled One of California's Largest Real Estate Ponzi Schemes

Miller Barondess Files Lawsuit Alleging Attorney and Law Firms Enabled One of California's Largest Real Estate Ponzi Schemes

Michael Goldberg, Trustee of the LeFever Mattson Liquidation Trust, represented by Miller Barondess, LLP, has filed a lawsuit in Sonoma County Superior Court against attorney Scott C. Smith and the law firms where he practiced, Bingham McCutchen LLP (now Morgan Lewis) and Hanson Bridgett, seeking damages for the defendants’ alleged role in knowingly enabling, facilitating and concealing one of the largest real estate Ponzi schemes in California history.

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According to the complaint, from 2002 to early 2024, Smith served as principal legal adviser to the LeFever Mattson enterprise controlled by Kenneth W. Mattson. Through a web of partnerships and other entities, Mattson sold hundreds of “phantom” real estate interests that either never existed, were not properly recorded, or overstated ownership. Over 700 investors, including retirees and members of Mattson’s church, lost more than $200 million, with some investing their life savings and retirement funds. The interests sold were unregistered, non-exempt securities in violation of federal and state securities laws.

According to the lawsuit, Smith and his firms created the legal framework that allowed the scheme to operate for over 20 years. They formed key companies, drafted operating and partnership agreements, prepared documents for unregistered securities sales, and included provisions allowing the commingling of investor funds. Despite receiving complaints about irregular payments, missing paperwork, false documents and lack of tax opinions, they failed to address or report these issues, covering them up instead.

The complaint states that in 2006, Smith drafted a legal opinion warning of potential civil and criminal penalties for selling unregistered securities to unqualified investors. However, neither he nor his firms advised the enterprise to register the offerings, implement independent oversight, file required documents, or stop the illegal sales. Despite identifying red flags in investor communications in 2010 and 2013, Smith kept the scheme going. In February 2024, as the scheme began to unravel, he was appointed General Counsel and joined the company’s Board of Directors.

The scheme collapsed later in 2024 when the company could not secure enough new funds to pay earlier investors and began missing payments—a classic Ponzi scheme. Mattson resigned as CEO and CFO in April 2024. The FBI later searched his home. Over 60 companies associated with the scheme filed for bankruptcy between August and November 2024. In May 2025, a federal grand jury indicted Mattson for wire fraud, money laundering, and obstruction of justice. The SEC filed an action for fraud and the sale of unregistered securities. A bankruptcy investigation determined the fraud had persisted for decades.

“The legal architecture built and sustained by Mr. Smith and his law firms was part and parcel of the scheme that targeted vulnerable investors,” said Skip Miller, partner at Miller Barondess, LLP, in Los Angeles and counsel for the Trustee. “This action seeks to hold them accountable for the harm they caused.”

The case is:

Michael Goldberg as Trustee of The LFM Plan Recovery Trust v. Scott C. Smith, et al., No. 26CV05502(Sonoma Super. Ct., filed Aug. 5, 2026).

Press Contact:
Skip Miller
Partner, Miller Barondess, LLP
310-552-5251
smiller@millerbarondess.com

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