Prosecutors want prison time for two water officials convicted in bribery case

Robert Coache and Michael E. Johnson were found guilty Nov. 23, more than five years after each was indicted on 51 counts, most of them felonies, for taking kickbacks to help a wealthy Bunkerville landowner sell his water rights.

Johnson, a former chief hydrologist for the Virgin Valley Water District in Mesquite, was convicted on all counts including bribery, extortion, money laundering and other illegal financial transactions.

Coache, a retired deputy state engineer with the Nevada Division of Water Resources, was found guilty of all but a single charge of misconduct by a public officer.

“These guys had every advantage in life, and they had every advantage in their jobs,” said Marc DiGiacomo, chief deputy district attorney for Clark County. “Their behavior is inexcusable.”

The bribery scheme unfolded between Jan. 1, 2006, and May 21, 2008, when Johnson and Coache used their public positions to help landowner John Lonetti Jr. secure water rights on the Virgin River and then sell them to the Southern Nevada Water Authority, wholesale water supplier for the Las Vegas Valley, for $8.4 million.

In return, Lonetti Jr. funnelled $1.3 million to the men through Rio Virgin LLC, a company they set up and then dissolved after the transaction.

“They never should have received this money for basically doing their jobs,” DiGiacomo said.

Coache retired from his state job in May 2010, and Johnson resigned under fire from the Virgin Valley Water District a few months later. Lonetti was never charged in the case.

DiGiacomo said it’s unclear what the landowner received in exchange for the bribe money that he couldn’t have gotten by hiring a lawyer for a few thousand dollars to handle the water transaction for him.

The nonprofit Southern Nevada Water Authority cooperated with investigators and was not accused of any wrongdoing.

Public defender Bryan Cox, who represents Johnson, called last week’s verdict “a tough loss” and said an appeal would be filed.

A message left Wednesday for Coache’s attorney, Bret Whipple, was not immediately returned.

Coache and Johnson are due back in court Dec. 8 to determine whether they should be offered bail or jailed until their Jan. 12 sentencing hearing.

In addition to facing prison time, Coache and Johnson stand to lose ownership of at least two valley homes they purchased with money from the scheme. Shortly after the men were indicted in 2011, Las Vegas police obtained a rare court order to prevent the rental properties from being sold.

DiGiacomo said Metro might now move to seize those homes, which he said were bought using shell companies in an effort to launder the kickbacks.

“They tried very hard to layer it and hide the owner of both the money coming in and the money going out,” DiGiacomo said.

Contact Henry Brean at hbrean@reviewjournal.com or 702-383-0350. Follow @RefriedBrean on Twitter.