Wednesday, January 7, 2004
Page 4
Appeals Court Orders Reduction in Prison Time for Couple Convicted in $17 Million Embezzlement
By a MetNews Staff Writer
The Sixth District Court of Appeal has ordered a sentence reduction for a Silicon Valley couple convicted six years for embezzling more than $17 million from an industrial development firm.
Gilbert Chavez and his wife, Cheryl Chavez, each faced the possibility of up to 19 years in prison after being convicted of tax- and theft-related charges in 1998. But the Court of Appeal Monday affirmed a Superior Court judgeís ruling that they are entitled to the retroactive benefit of a change in the way sentences for tax violations are calculated.
Defense lawyers said the ruling means the defendants must be released immediately, barring a further stay. The Court of Appeal had stayed the lower court ruling and denied bail, but expedited the appeal.
The Chavez were arrested in 1996 and charged with diverting the money from the accounts of Cupertinoís Berrg & Berg, where Cheryl Chavez was a bookkeeper.
Cheryl Chavez pled no contest to grand theft, possession of stolen property, four counts of filing false tax returns, and one count of failing to file a return. Her husband was convicted after a jury trial of the same charges except grand theft.
Assets acquired by the Chavezes with the embezzled funds reportedly included a nine bedroom beachfront house in Hawaii, three houses in the San Jose area, two houses in Washington state, 15 motor vehicles, two boats, three race cars and two Lear jets.
They were each sentenced to seven years on the theft charges plus a maximum of 12 years on the tax charges. The judge ruled that the terms on the tax violations would be at the discretion of the Board of Prison Terms because the relevant statute provided that filing a false return was punishable by imprisonment for ìnot more than three years—which the court interpreted as meaning indeterminate terms.
In 2001, after the convictions became final, the law was amended to provide for determinate sentences of 16 months, two years, or three years for the offense. The defense argued that under the Determinate Sentencing Laws they were entitled to be re-sentenced, with each subordinate consecutive term to be reduced to one-third the base term, or eight months.
Prosecutors argued that because the convictions were final, the defendants were not entitled to retroactivity. But Justice Eugene Premo, writing for the Court of Appeal, said the usual rule does not apply because the Legislature intended the change to be fully retroactive.
The case is In re Chavez, 04 S.O.S. 94.
Copyright 2004, Metropolitan News Company