Former water district manager charged in Fresno, Merced Counties

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Dennis Falaschi, the embattled former director of the Panoche Water District, was indicted by a federal grand jury on Thursday and charged with conspiracy, theft of government property and filing false tax returns.

The indictment accuses 75-year-old Falaschi of exploiting a leak in the Delta-Mendota canal and devising a way to steal more than $25 million worth of federally owned water. The 117-mile canal provides water to irrigate the lands on the west side of the San Joaquin Valley.

As general manager, Falaschi oversaw the operations of the Panoche Water District, a public agency that supplies water to landowners for irrigation, municipal and industrial uses in western Merced and Fresno counties.

Falaschi’s attorney, Marc Days, could not immediately be reached for comment on Thursday.

Court documents show that in 1992, Falaschi was told that an old, abandoned drainage branch was leaking water from the Delta-Mendota canal into a parallel canal controlled by the water district. Access to the turnout had been sealed years earlier, but the cement had since cracked.

Falaschi then had a water district employee fix the blocked access so he could open and close it on demand, according to court documents.

Prosecutors also allege Falaschi told the employee to conceal the area where the water was being diverted.

“Falaschi then instructed employees to use the site to steal federal water from the Delta-Mendota Canal on several occasions until the site was discovered in April 2015. He used the proceeds of the theft to pay himself , and others, exorbitant salaries, benefits, and personal expense reimbursements,” according to a press release from the U.S. Attorney’s Office.

Falaschi, who left the Waters District in March 2017, is also accused of filing false tax returns from 2015 to 2017. According to court records, he did not report to the Internal Revenue Service more than 900 000 dollars of income he received from the sale of private water. .

Falaschi faces a maximum of 18 years in prison and up to $750,000 in fines if convicted on all counts.

Falaschi is also fighting embezzlement charges in Fresno County Superior Court. He and former office manager Julie Cascia are accused of embezzling more than $100,000 from the district.

Ara Azhderian, the current director of the water district of Panoche, had not seen the indictment on Thursday.

Last year, Panoche agreed to pay the U.S. Bureau of Reclamation nearly $7.5 million to compensate for the “unauthorized diversion of water” from two federal canals, according to a settlement agreement obtained by The Sacramento Bee. The settlement was approved by the US Attorney’s office.

In a separate agreement, the water district agreed to pay the San Luis & Delta-Mendota Water Authority $798,000, plus $172,000 in interest, for damages suffered from the diversions. Panoche admitted no wrongdoing.

The authority is an apex agency that distributes water from the Bureau of Reclamation to Panoche and 28 other member districts on the west side of the valley.

This story was originally published April 14, 2022 6:19 p.m.

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A Valley native, Robert has worked at The Fresno Bee since 1994, covering a variety of topics including education, business and agriculture. It currently covers the courts.

Daniel E. Murphy