A water manager of a public agency, who pleaded guilty to stealing as much as $3.5 million of taxpayers’ water, won’t serve time in prison.

At Fresno federal court on Monday, Judge Jennifer Thurston sentenced Dennis Falaschi to five years’ probation and six months of home detention. He also was fined $10,000.

Falaschi, 78, served as general manager for the Panoche Water District in western Fresno County, from 1986 through 2017. The federal government accused him of diverting up to $3.5 million of water from the Delta-Mendota Canal and illegally selling it on the market.

Attorney Marc Days, representing Falaschi, successfully argued against prison time during a one-hour sentencing hearing. He said that Falaschi had survived a stroke and has diabetes. Days also questioned whether Falaschi could survive a prison sentence.

“Who knows how much longer he has?” Days said.

In 2022, the government charged Falaschi with one count of conspiracy, one count of theft of government property, and three counts of filing a false tax return. He changed his plea to guilty in May.

Prosecutors Wanted One Year

Prosecutors sought a sentence of 12 months and a day. The federal probation department recommended six months.

Thurston at times seemed to waffle about her decision. She cut off Days at one point, when the attorney argued that federal sentencing guidelines did not reflect the actual amount of water stolen.

“I’m concerned about deterrence,” Thurston said from the bench. She also quoted the line that “whiskey is for drinking, water is for fighting.”

Assistant U.S. Attorney Joseph Barton argued the significance of the water loss.

“He should go to prison and serve a meaningful sentence,” Barton told the judge. “That needs to be punished … to send a message .. that this will not be tolerated.”

Initially accused of stealing $25 million worth of water for personal benefit, the plea agreement revised the amount of stolen water to between $1.5 and $3.5 million for the benefit of the district.

Scheme Began in 1992

As GV Wire’s Bill McEwen previously reported, the scheme allegedly began in 1992 when Falaschi learned that an abandoned drain turnout in the canal was leaking water into a parallel canal under the Panoche Water District’s control. Falaschi ordered employees to install equipment to be able to divert water.

Days said that Falaschi wanted to protect farmland and prevent toxic discharge into the San Joaquin River, by blending the stolen federal water with other sources and delivering it to farmers.

Falaschi briefly spoke to the court.

“I should have found a better way to deal with a toxic problem, to save things from being destroyed,” Falaschi said.

He apologized to the court, but said he had to do something because the federal government was not paying attention to water issues.

Thurston Justifies Decision

Thurston — a President Joseph Biden appointment confirmed in 2021 — told Falaschi what he did was wrong.

“I don’t think what you did is justified. What you don’t do is steal,” Thurston said.

But, she also said that it is unlikely Falaschi will re-offend.

“Does he have to risk his life over it?” Thurston said.

Days said that Falaschi cares for ailing family members, including his wife and children.

Neither Falaschi, nor his attorneys, Days and former federal judge Oliver Wanger, commented after the hearing.

Barton declined to comment on the sentence, as did U.S. Attorney Phillip A. Talbert.