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Two Sentenced in Unrelated State Income Tax Cases

Released: October 29, 2009

Sacramento — Two Los Angeles area individuals were sentenced in unrelated criminal cases involving felony state tax charges, the Franchise Tax Board (FTB) announced.

In the first case, Mario R. Guevara, 31, of Hollywood, was found guilty of two counts of grand theft and one count of state income tax evasion. Guevara is a real estate agent, who, according to court documents, created a limited liability company to forge escrow documents. Then, in 2006, Guevara bilked two individuals out of the proceeds of their real estate transactions. In addition Guevara earned more than $1.1 million, but failed to file state income tax returns for himself or his business claiming this income.

Los Angeles County Superior Court Judge David M. Horwitz today sentenced Guevara to four years in state prison and ordered him to pay restitution of more than $738,000 to his first victim, $100,000 to his second victim and more than $108,000 to FTB representing the unpaid tax, penalties, interest and the cost of the investigation. Judge Horwitz handed down the sentence in Department 50 of the Clara Shortridge Folz Criminal Justice Center. Los Angeles County Deputy District Attorney Walter Mueller prosecuted the case.

In the second case, Gregory L. Stockfish, 46, was found guilty of felony charges including state income tax fraud. According to court documents, Stockfish was employed as an account manager with the local office of a nationwide payroll service company. Between 2002 – 2006, Stockfish embezzled more than $1.8 million from his former employer by diverting clients’ employment tax obligations to his personal bank accounts. Stockfish also failed to claim this illegal income on his state income tax returns for these same years. All income is taxable including income from illegal sources.

On October 22, Los Angeles Superior Court Judge David M. Horwitz sentenced Stockfish to 12 years in state prison and ordered him to pay the state restitution of more than $2.2 million representing the unpaid tax, penalties, interest, and the cost of the investigation.

The failure to file state income tax returns and underreporting income are part of the $6.5 billion tax gap California faces each year. The tax gap is defined as the difference between the tax that is due and the tax that is paid.