An ex-California official quietly stole over $1.5 million of water in a heist that lasted decades, but mysteries remain

An ex-California official quietly stole over $1.5 million of water in a heist that lasted decades, but mysteries remain
  • An ex-California official pleaded guilty to conspiring to steal water from the federal government.

  • Dennis Falaschi's plea represents only a fraction of the original $25 million believed by prosecutors to be stolen.

  • The plea raises more questions about who was responsible and benefited from the decades-long heist.

A former California official pleaded guilty to conspiring to steal more than $1.5 million of water, but the decadeslong water heist case still has more questions than answers.

Dennis Falaschi served as the general manager of the Panoche Water District in Fresno and Merced Counties, located in central California, from around 1986 to 2017. The public water district bought water from the federal government and collected drainage water from farms, both of which it then legally sold to farmers in the area, according to a statement issued by the US attorney's office for the Eastern District of California on Tuesday.

But after Falaschi discovered some of the federally owned water was leaking from an old pipe into a separate canal, the pipe was modified so it could be open and closed, allowing water to be taken "on demand," prosecutors said.

The US attorney said Falaschi was responsible for stealing somewhere between $1.5 million and $3.5 million worth of water. Prosecutors also said that between 2011 and 2016 Falaschi was paid for water that he had sourced legally, but he did not report the income on his tax returns.

In a plea agreement filed Thursday, Falaschi pleaded guilty to one count of conspiring to take federally owned water and one count of filing a false tax return.

A lawyer for Falaschi did not respond to a request for comment from Business Insider. His sentencing is set for September.

While the plea provides some answers, many questions remain in the case that farmers in the San Joaquin Valley have been watching for years.

When Falaschi was indicted in 2022, prosecutors painted him as the mastermind of a plot that lasted from around 1992 to 2015 in which more than $25,000,000 worth of water was stolen from the federal government, or more than 130,000 acre-feet of water.

The indictment said proceeds from the theft, which should've gone to the federal government, instead when to Falaschi and eight co-conspirators in the form of "exorbitant salaries, fringe benefits, and personal expense reimbursements."

The Los Angeles Times, which published a deep-dive into the alleged heist in April, reported that while some farmers were angry with Falaschi, others described him as the "Robin Hood of irrigation," ensuring they could get the water they needed.

Falaschi's plea agreement claims he's responsible for stealing only a fraction of the original $25 million prosecutors accused him of taking in the original indictment. The plea agreement also said Falaschi was one of several people involved in the misconduct and that he was unaware of the full extent of the misconduct.

Of the water Falaschi took, the plea agreement said almost all of it was taken to "blend down and reuse drainage water, which helped protect farmland and improve water quality in the San Joaquin River."

"The improved water quality contributed to the San Joaquin River being removed from the list of impaired waters under California's Clean Water Act," the plea agreement said, adding, "There was no evidence that Mr. Falaschi directly benefitted from the misconduct."

The Times reported the plea raises even more questions about who was stealing the water, who was making money off of it, and why it took the federal government so long to notice.

The mystery surrounding the case continues as water use in the state coms under increasing scrutiny, with droughts and water shortages forcing California officials to reconsider how water is used and allotted.

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