Saratoga News

Saratoga couple found guilty, could face long prison terms

By Sarah Lombardo

A Saratoga man was found guilty April 8 of four counts of filing false state income tax returns, one count of failing to file a state tax return and one count of receiving stolen property.

Gilbert F. Chavez, 47, and his wife, Cheryl A. Chavez, 43, were arrested in October 1996 for their role in embezzling--and then not reporting as income--almost $18 million from the Cupertino-based industrial development firm for which Cheryl worked as an accountant for about eight years.

Gilbert, a former pipe-fitter, is scheduled to be sentenced May 8 and faces a maximum of 19 years in state prison. Cheryl previously pleaded no contest on March 16 to five counts of filing false tax returns, grand theft and receiving stolen property. She is also scheduled for sentencing May 8 and faces a maximum of 22 years.

The Chavezes lived with their two teenagers on Prospect Road in Saratoga, and once owned Orchard Spa Salon in Saratoga.

According to investigators for the Santa Clara County district attorney's office and the Franchise Tax Board, Cheryl embezzled funds from her employer by using the company's bank accounts to order cashier's checks made payable to third-party accounts controlled by her and her husband. Cheryl also made wire transfers from company bank accounts to buy real estate for herself and Gilbert, and misappropriated funds from the company to accounts shared by the couple.

With the embezzled funds, the Chavezes apparently bought not only their Saratoga home but also a nine-bedroom beachfront home in Hawaii, three homes in San Jose, two homes in Washington state, 15 vehicles, three Indy Light race cars and two Lear jets.

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