No jail time for ex-chief of Fresno district once accused of $25 million theft of water

The former head of a water district in Fresno and Merced counties who admitted to stealing about $1.5 million to $3.5 million in public water will not see any prison time and has been ordered to pay about $10,000 in fines.

Dennis Falaschi, 78, of Aptos pleaded guilty in May to two counts for conspiring to steal federally owned water during his time leading the Panoche Water District and filing a false tax return.

Falaschi was sentenced to five years probation with the first six months under home detention in a Monday hearing before U.S. District Court Judge Jennifer L. Thurston.

Thurston said during the hearing she took into account Falaschi’s advanced age and health, which included a stroke and a diabetic kidney condition, according to his attorney.

Prosecutors had recommended 12 months prison time and a probation report recommended Falaschi serve six months in prison, according to testimony during the hearing.

Thurston also ordered Falaschi to pay fines for each of the two counts, which totaled $10,000.

From 1992 to April 2015, Falaschi served as the general manager of the Panoche district that sold water to farms of 38,000 acres or larger.

Prosecutors said he rigged a standpipe to steal water from a section that sprung a leak and siphoned off the water for about half of his three decades as the head of the water agency. That water was mixed with drainage water.

Though he pleaded guilty to stealing a smaller amount, Falaschi was initially accused of stealing more than $25 million worth of water. A 2017 audit from the state controller’s office began Falaschi’s legal trouble, and he left the district a month later.

Assistant U.S. Attorney Joseph Barton argued at Monday’s hearing that Falaschi should serve time in prison to deter other water district officials who may run afoul of the law. “You’re not going to get off easy. You have to go to prison,” Barton said in the courtroom.

Falaschi’s attorney, Marc Days, said prosecutors had not proven the amount of water taken and argued it was much smaller than what Falaschi had been accused of stealing.

Days also said his client was at risk of significant effects on his life under the level of health care provided in the Federal Bureau of Prisons.

The tax return and sale of water

The other charge in Falaschi’s case had to do with legal water pumping. He did not report on his tax return the sale of water he was legitimately selling privately between 2011 and 2016, according to prosecutors.

Water in the central San Joaquin Valley has been under a microscope in recent years while California has sought to conserve water. The state has passed laws that regulate groundwater pumping, push water storage efforts and encourage residents to consider lawns and landscapes that are less water-dependent and better suited for dry climates.

Overpumping in the Valley has led to subsidence, when the ground sinks as water is sucked out, and many rural residents have seen wells go dry. Farmers have had to drill deeper to reach water in the earth during multiple years of drought.

Falaschi speaks in court

Falaschi’s attorney argued in court his client took water in an attempt to avert a greater tragedy. Falaschi was trying to protect farmland and keep toxic discharge from getting back into the San Joaquin River, Days said.

Before he was sentenced, the judge offered Falaschi the chance to comment. Falaschi apologized but defended his decision.

“We were forced to do something to deal with that toxic water problem,” he said. “It was the wrong way, unfortunately.”

Thurston admonished Falaschi and said he should have worked with the authorities rather than steal water.

“I felt better about it before you spoke,” she said. “I don’t think what you did was justified.”