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State of California Franchise Tax Board

San Jose couple sentenced for felony tax evasion

The State Board of Equalization (BOE) today announced the sentencing of Larry and Patricia Stenshoel after the couple was convicted of two felony counts of sales tax evasion, three felony counts of state income tax evasion, and one count of grand theft.

Larry Stenshoel was sentenced to two years in state prison. Patricia Stenshoel was sentenced to three years probation and 1,440 hours of community service. Additionally, Larry and Patricia Stenshoel were ordered to pay remaining restitution of $544,834 to the BOE and $264,246 to the Franchise Tax Board (FTB). They had initially paid $500,000 toward their tax debt. The case was prosecuted by the Santa Clara County District Attorney's Office.

Larry Stenshoel, 76, and his wife, Patricia Stenshoel, 72, operated the Cade Company, a San Jose waterproofing business, where they charged and collected sales tax from customers without properly paying the tax to the BOE. The joint investigation conducted by the BOE and the FTB found the Stenshoels intentionally failed to report and pay over $430,000 in sales tax from October 1996 to December 1997 and more than $60,000 in State income taxes between 1994 and 1996.

The Stenshoels fled California after charges were filed against them in April of 2001. Larry Stenshoel was extradited from the State of Texas in June 2005, and Patricia Stenshoel later surrendered to authorities in February 2006.

The California State Board of Equalization collects almost $50 billion annually in taxes and fees and serves as the enforcement agency for these revenues, which support state and local government services. It hears business tax appeals, acts as the appellate body for franchise and personal income tax appeals, and performs a significant role in the assessment and administration of property taxes.

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