CHAGHOURI

The question presented in this appeal by the state is whether the State Board of Equalization is entitled to recover, as restitution, sums it expended in an investigation into defendant Elias Gebran Chaghouri's wrong doing.

Defendant pleaded no contest to five charges, grand theft (Pen.Code, §§ 484, 487, subd. (a)), two counts of making false and fraudulent sales tax returns (Rev. & Tax.Code, § 7153.5), offering false documents (Pen.Code, § 132), and perjury (Pen.Code, § 118). He stipulated that he owed $153,421 in unpaid taxes and that the state was entitled to impose a 25 percent penalty of $38,355 together with prejudgment interest of $125,967 with post-judgment interest at the rate of 10 percent. He was placed on probation. It was undisputed that the state expended $121,226 in investigation costs but whether that could be recovered was left to the court to decide.

Restitution orders in California can include costs incurred by the direct victim. The narrow question presented in this appeal is whether the Board of Equalization is a direct victim. The trial court held that it was not. The state appeals. We shall affirm.

During an audit of defendant's business,…