Federally owned water stolen by California official, feds say

FRESNO, Calif. — The former general manager of a central California water district is accused of stealing more than $25 million in federally owned water by exploiting a leak in a canal, prosecutors said Thursday.

Dennis Falaschi, 75, was indicted on charges of conspiracy, theft of government property, and filing false tax returns, according to the U.S. Attorney’s Office for the Eastern District of California.

Falaschi worked at the Panoche Water District in the San Joaquin Valley, which serves parts of Merced and Fresno counties, according to the Los Angeles Times.

While the indictment does not name the water district, Falaschi was among five people — including his son — who face state charges relating to the alleged embezzlement of the agency’s funds. Falaschi was accused by prosecutors in 2018 of using the Panoche Water District “as his own personal operation and bank account.” That case remains ongoing.

Falaschi’s attorney did not immediately return a request for comment Friday, nor did the Panoche Water District’s current general manager.

Falaschi’s scheme in the federal case allegedly dates back to 1992, when he was told that cement on a gate in the Delta-Mendota Canal had cracked and it was leaking water, prosecutors said.

He is accused of directing employees to install mechanics that both diverted the leaking water into the Panoche Water District’s canal and concealed the equipment. The site was not discovered until 2015 when drought levels brought the water levels low enough for the equipment to be spotted.

He allegedly used the proceeds from the stolen water to fund “exorbitant salaries, fringe benefits, and personal expense reimbursements” for himself and others.

Falaschi is also charged with filing false tax returns from 2015 to 2017 by failing to report more than $900,000 in income from the private water sales.