On September 9, 1999, about 1530 Pacific daylight time, a Piper PA-23-160 Apache, N4065P, registered to and operated by Scholls Oaks LLC, was substantially damaged during an off-airport forced landing following a complete loss of power. Visual meteorological conditions prevailed and no flight plan was filed for the 14 CFR Part 91 instructional flight. The private pilot student received minor injuries while the certified flight instructor was uninjured. The flight originated from Stark's Twin Oaks Airpark, Hillsboro, Oregon, approximately 30 minutes prior to the accident. According to the pilot's statement, water was found in the aircraft's main fuel tanks during the preflight inspection. After sumping the tanks several times, the water was believed to be removed and the pilot's departed for the flight. While maneuvering, the flight instructor intentionally failed and secured the right engine. A restart attempt of the right engine was unsuccessful, and the pilots elected to return to the airport. While turning an approximate three mile final, the aircraft's left engine failed. Approximately one quarter mile from the runway, the student initiated a left turn permitting a forced landing to an open field. While in the left turn, the aircraft contacted the terrain causing substantial damage to left wing and fuselage. A Federal Aviation Administration (FAA) inspector from the Portland, Oregon, Flight Standards District Office, inspected the wreckage and reported there was water in the aircraft's main fuel tanks. He also stated there was water found in the carburetor bowls of both engines.