Aptos Man Indicted For Illegally Diverting $25 Million Worth Of Federal Water
FRESNO (CBS SF) -- A federal grand jury returned a five-count indictment Thursday against a former Central Valley water district general manager who allegedly exploited a leak in the Delta-Mendota Canal to steal over $25 million in federally owned water.
U.S. Attorney Phillip A. Talbert announced that 75-year-old Dennis Falaschi of Aptos has been charged with conspiracy, theft of government property and filing false tax returns.
According to court documents, Falaschi was the general manager for a public water district in Fresno and Merced Counties near the communities of Dos Palos, Firebaugh, and Los Banos.
In 1992, Falaschi was informed that an old, abandoned drain turnout near milepost markers 94.57 and 94.58 on the Delta-Mendota Canal was leaking water from the canal into a parallel canal that the water district controlled.
The drain was connected to a standpipe on the bank of the Delta-Mendota Canal that used a gate and valve to redirect water into the water district's canal. The gate had been cemented closed years earlier.
But, federal prosecutors said, the cement had since cracked and water was coming through it.
Thereafter, Falaschi instructed an employee to install a new gate inside the standpipe so that the site could be opened and closed on demand.
He later allegedly instructed the employee to install a lid with a lock on top of the standpipe and an approximate two-foot elbow pipe off the valve of the standpipe that angled down 90 degrees into the water district's canal.
The lid concealed the theft because it prevented people from seeing that the gate inside the standpipe was functional. The elbow pipe further concealed and expedited the theft because it enclosed the water flow from the Delta-Mendota Canal into the water district's canal and was installed in such a way that it was generally submerged under the water.
Falaschi subsequently instructed employees to use the site to steal federal water from the Delta-Mendota Canal on multiple occasions until it was discovered in April 2015.
He used the proceeds of the theft to pay himself and others exorbitant salaries, fringe benefits, and personal expense reimbursements.
Additionally, Falaschi is charged with filing false tax returns in 2015 through 2017. According to court records, he failed to report over $900,000 in income to the Internal Revenue Service that he received from private water sales.
If convicted of all charges, Falaschi faces a maximum prison sentence of 18 years and fines totaling $750,000.
