The previous basic supervisor of a San Joaquin Valley water district, accused by federal prosecutors of finishing up one of the audacious and long-running water heists in California historical past, pleaded responsible Tuesday to a model of the crime way more muted than what prosecutors had specified by their unique indictment.
As a part of a plea settlement negotiated with prosecutors, Dennis Falaschi, 78, former longtime head of the Panoche Water District, appeared in a Fresno federal courtroom and pleaded responsible to at least one rely of conspiring to steal water from the federal government and one rely of submitting a false tax return.
The plea deal is a jarring twist in a case that has captivated farmers within the San Joaquin Valley. In 2022, prosecutors accused Falaschi of masterminding the theft of greater than $25 million price of water out of a federal irrigation canal over the course of 20 years and promoting it to farmers and different water districts. The water seize, as specified by the indictment, occurred cat-burglar-style, siphoned by means of a secret pipe, usually after hours to keep away from detection.
In response to the indictment, proceeds that ought to have gone to the federal authorities as a substitute had been used to learn Falaschi, his water district and a small group of co-conspirators, a lot of it funneled into exorbitant salaries and lavish fringe advantages.
However the plea settlement tells a extra convoluted story — one which downplays Falaschi’s culpability and raises a number of questions on who, precisely, engineered the water theft, who benefited and what number of others had been concerned.
From 1986 till 2017, Falaschi was basic supervisor of the Panoche Water District, a public company that provides irrigation for 38,000 acres of farmland in Fresno and Merced counties on the parched western facet of the San Joaquin Valley. The water district attracts a lot of its provides from the Delta-Mendota Canal, a serious artery within the federal authorities’s Central Valley Challenge, a system of dams and canals that strikes water from Northern California to allow industrial-scale farming within the state’s arid inside.
The federal authorities expenses native irrigation districts to be used of its water, albeit at lowered charges from these out there on the open market. Every year, the federal government pronounces how a lot water native districts will get at these lowered charges. In drought years, the federal government typically shrinks its allocations, forcing farmers to pump groundwater, purchase what they want on the open market or let fields go fallow.
In response to an outline of the crime specified by the plea settlement, Falaschi realized “previous to 2000” that an previous, deserted standpipe on the Delta-Mendota Canal was leaking right into a parallel native irrigation ditch, which means the water flowing out was not topic to federal metering. The factual foundation filed with the plea deal states {that a} farmer whose land was affected by the leak — who on the time was additionally president of Panoche’s board of administrators and thus Falaschi’s de facto boss — instructed Falaschi to not report it to water authorities.
Panoche staff modified the leaking standpipe so it could possibly be opened and closed, based on the plea settlement paperwork, permitting for water to be drawn from the Delta-Mendota Canal on demand and undetected.
Within the years that adopted, the settlement paperwork state: “Proof obtained throughout the federal government’s investigation additional confirmed that Mr. Falaschi was simply one among a number of people who had been concerned within the misconduct and the complete extent of the misconduct was unknown to him.”
Panoche “board members, supervisors and lower-level staff doubtless acted on their very own accord and took federal water for their very own use and profit at instances,” the paperwork state. “For instance, Farmer #1 doubtless took the water, or directed his or her ranch palms to take the water, both on their very own or by contacting PWD staff instantly and never alerting Mr. Falaschi.”
The plea settlement drops one other bombshell, alleging that Panoche staff “additionally doubtless continued taking federal water from websites aside from the previous standpipe properly after Mr. Falaschi left the district in 2017.”
The federal government provided no particulars about this allegation, or whether or not officers consider the alleged theft has stopped.
Falaschi, the federal government now contends, was chargeable for stealing lower than $3.5 million price of water, a small portion of the $25 million prosecutors alleged was stolen over time within the unique indictment. Furthermore, regardless of what prosecutors alleged within the indictment, the plea deal stipulates that there isn’t a proof Falaschi instantly profited from the misconduct, however as a substitute that he used the purloined water to dilute salty and poisonous farm runoff, “which helped shield farmland and enhance water high quality within the San Joaquin River.”
The plea settlement doesn’t title the Farmer #1 who allegedly conspired with Falaschi. And it’s imprecise concerning the date when the leaky standpipe was found, making it troublesome to pinpoint what years are in query so far as who was main the Panoche board.
Whether or not the federal authorities intends to pursue expenses towards the unnamed alleged conspirators — or just name the episode closed — remained unclear Tuesday. As a part of the plea deal, Falaschi has agreed to cooperate with federal prosecutors in any additional investigations. In response to the courtroom paperwork, that features attending grand jury classes and trials as requested by the federal government, responding in truth to all questions and turning over any data requested by the federal government.
Throughout Tuesday’s listening to, Falaschi, carrying a charcoal swimsuit and tennis footwear, spoke little besides to inform U.S. District Decide Jennifer Thurston that he suffered from hypertension and diabetes. In response to a query from Thurston, he testified that he has a highschool training. He declined to talk with The Occasions after the listening to concluded.
His legal professional, Marc Days, additionally declined to remark, as did the federal prosecutor, Assistant U.S. Atty. Joseph D. Barton.
Falaschi faces a most time period of eight years in jail for the 2 counts included within the plea settlement, which additionally states the federal government “might advocate” he be sentenced to the low finish of that time period. A sentencing listening to was set for September. The settlement requires no monetary restitution, noting that the Panoche district in 2021 agreed to reimburse the Bureau of Reclamation almost $7.5 million for unauthorized diversions of water from the Delta-Mendota Canal from 2009 to 2015.
Kevin Little, a Fresno legal professional who has watched the case carefully, mentioned the settlement “doubtless marks a whimpering finish to what began as a serious case.”
Little represents an worker on the San Luis & Delta-Mendota Water Authority who found the illicitly modified standpipe in 2015. Little mentioned the plea settlement “displays a recognition that somebody who was by no means charged with a prison offense was maybe the transferring drive behind the water fraud scheme.”
Ultimately, he mentioned, prosecutors “exacted the requisite pound of flesh from Mr. Falaschi. Or at the least an oz..”
