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An ex-California official quietly stole over $1.5 million of water in a heist that lasted decades, but mysteries remain

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An ex-California official quietly stole over .5 million of water in a heist that lasted decades, but mysteries remain


A former California official pleaded guilty to conspiring to steal more than $1.5 million of water, but the decadeslong water heist case still has more questions than answers.

Dennis Falaschi served as the general manager of the Panoche Water District in Fresno and Merced Counties, located in central California, from around 1986 to 2017. The public water district bought water from the federal government and collected drainage water from farms, both of which it then legally sold to farmers in the area, according to a statement issued by the US attorney’s office for the Eastern District of California on Tuesday.

But after Falaschi discovered some of the federally owned water was leaking from an old pipe into a separate canal, the pipe was modified so it could be open and closed, allowing water to be taken “on demand,” prosecutors said.

The US attorney said Falaschi was responsible for stealing somewhere between $1.5 million and $3.5 million worth of water. Prosecutors also said that between 2011 and 2016 Falaschi was paid for water that he had sourced legally, but he did not report the income on his tax returns.

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In a plea agreement filed Thursday, Falaschi pleaded guilty to one count of conspiring to take federally owned water and one count of filing a false tax return.

A lawyer for Falaschi did not respond to a request for comment from Business Insider. His sentencing is set for September.

While the plea provides some answers, many questions remain in the case that farmers in the San Joaquin Valley have been watching for years.

When Falaschi was indicted in 2022, prosecutors painted him as the mastermind of a plot that lasted from around 1992 to 2015 in which more than $25,000,000 worth of water was stolen from the federal government, or more than 130,000 acre-feet of water.

The indictment said proceeds from the theft, which should’ve gone to the federal government, instead when to Falaschi and eight co-conspirators in the form of “exorbitant salaries, fringe benefits, and personal expense reimbursements.”

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The Los Angeles Times, which published a deep-dive into the alleged heist in April, reported that while some farmers were angry with Falaschi, others described him as the “Robin Hood of irrigation,” ensuring they could get the water they needed.

Falaschi’s plea agreement claims he’s responsible for stealing only a fraction of the original $25 million prosecutors accused him of taking in the original indictment. The plea agreement also said Falaschi was one of several people involved in the misconduct and that he was unaware of the full extent of the misconduct.

Of the water Falaschi took, the plea agreement said almost all of it was taken to “blend down and reuse drainage water, which helped protect farmland and improve water quality in the San Joaquin River.”

“The improved water quality contributed to the San Joaquin River being removed from the list of impaired waters under California’s Clean Water Act,” the plea agreement said, adding, “There was no evidence that Mr. Falaschi directly benefitted from the misconduct.”

The Times reported the plea raises even more questions about who was stealing the water, who was making money off of it, and why it took the federal government so long to notice.

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The mystery surrounding the case continues as water use in the state coms under increasing scrutiny, with droughts and water shortages forcing California officials to reconsider how water is used and allotted.



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Newsom signs law to shield California elections from federal interference

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Newsom signs law to shield California elections from federal interference


Gavin Newsom, California’s governor, signed legislation Wednesday that aims to shield California elections from federal interference, saying he expected Donald Trump’s administration to try to meddle in the midterms this year.

The law, which took effect immediately and came days before next Tuesday’s primary, prohibits any person – including federal agents – from accessing voter rolls or election technology without a court order. Law enforcement officers are restricted from disrupting election workers, except in public safety emergencies.

Trump administration officials so far have said they have no plans to send immigration agents to polling locations across the US, a concern raised this year by several Democratic secretaries of state. But Newsom warned “we have to be prepared for everything” because “there’s no rules any more with the Trump administration”.

Voting is already under way in California’s closely watched primary for governor, where a crowded field of Democrats and two viable Republicans are vying for just two spots on the November ballot. Under the state’s open primary system, only the top two vote-getters advance to the general election, regardless of party affiliation.

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Newsom, who cannot seek a third term, said the election law is a response to “legitimate anxiety” about Trump’s tactics, primarily in Democratic-led states, where the president has deployed federal agents over the objections of local leaders. The Democratic governor warned against underestimating someone who “doesn’t believe in free and fair elections”.

“I expect the worst with Trump because he’s done the worst,” he said at a news conference.

White House spokesperson Abigail Jackson told the Associated Press later Wednesday that Trump is committed to ensuring that Americans have full confidence in the administration of elections.

“Instead of levying false attacks at the President, Newscum should look in the mirror,” she said in a statement, using Trump’s derogatory nickname for Newsom.

In an interview last year with Vanity Fair, Susie Wiles, the White House chief of staff, knocked down the idea that Trump would deploy the military to suppress voting, saying it was “categorically false”.

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The California law also makes it a crime to knowingly take voted ballots out of the custody of election officials.

Earlier this year, the FBI under Trump seized the 2020 general election ballots from Georgia’s most populous county, which is heavily Democratic and has long been at the center of the president’s false claims that fraud cost him the race. The FBI and justice department also have sought records from previous elections in the largest counties in Arizona and Michigan.

Trump triggered a national redistricting frenzy ahead of the midterms when he urged Republicans in Texas and elsewhere to redraw their US House districts to help the party retain control of the closely divided chamber. Missouri, North Carolina, Ohio, Florida and Tennessee also have enacted new maps that could benefit Republicans, and Louisiana is expected to be next.

Republicans so far think they could gain as many as 14 seats from redistricting in November, while Democrats think they could gain six in California and Utah.



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Newsom to impose 100% tax on California payees of Trump’s $1.8bn fund

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Newsom to impose 100% tax on California payees of Trump’s .8bn fund


California governor Gavin Newsom is looking to thwart Donald Trump’s $1.776bn “anti-weaponization fund” by imposing a 100% tax on any payout received by state residents.

In May, the Department of Justice (DoJ) announced a fund to compensate alleged “victims of lawfare and weaponization”. It’s unclear who qualifies under this category.

The fund was the product of a settlement reached between Trump and the Internal Revenue Service (IRS) – the agency the president sued over his leaked tax returns.

Critics, including Newsom, have slammed the fund as a “boondoggle” designed to divert money to Trump’s allies. Speculation has swirled that its benefactors could include the individuals who were arrested in the 6 January 2021 siege of the US Capitol. The Trump administration has described the rioters as patriots and since pardoned many who were charged in relation to the attack.

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“People who assault cops and overthrow democracy don’t deserve a taxpayer-funded payday,” Newsom wrote in a Wednesday post to X, after announcing his plan at a news conference.

Five people appointed by the US attorney general will preside over the $1.776bn, which will be funneled from a fund typically used to pay court judgments.

Todd Blanche, the acting US attorney general, characterized the fund as an avenue “to make right the wrongs that were previously done”. Quarterly reports on who has received monetary relief and in what amount will be sent to the attorney general. Claims will not be processed after 1 December 2028, at which point any remaining amount will be returned to the federal government, according to the DoJ.

The DoJ did not immediately respond to a request for comment on how it would address Newsom’s proposed tax.

It’s the latest in a longstanding bitter feud between Newsom and Trump.

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The two politicians have often traded jabs in the press and over social media. They are at odds on a number of issues in the Golden state including the federal deployment of ICE agents, how healthcare fraud has been handled and election integrity.



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Opinion | Our house burned down but our mortgage didn’t. California fire survivors need time

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Opinion | Our house burned down but our mortgage didn’t. California fire survivors need time


By Rachel Jonas and Robert Fagnani, Special for CalMatters

The aftermath of the Palisades Fire, as clean-ups and infrastructure repairs begin, in Pacific Palisades, on Jan. 14, 2025. Photo by Ted Soqui for CalMatters

This commentary was originally published by CalMatters. Sign up for their newsletters.

Guest Commentary written by

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We were supposed to celebrate our younger son’s first birthday in our backyard on January 11th, 2025. Instead, four days before his party, we watched the Palisades fire take our home. We’d packed what we could, put our kids in the car and drove to Tennessee to live with family because we had nowhere else to go.

Our house is gone. Our older son’s preschool is gone. The library, the restaurants, the small routines that made up a life are all gone. What remains is a mortgage on a property that no longer exists and a rebuilding process that every expert we’ve spoken to says will take two to four years, minimum.

We did not expect to become advocates. But in the months after the fire, we kept running into the same impossible questions from other families — questions about forbearance, credit and what their mortgage servicer was actually required to do. Nobody had clear answers, so we founded Disaster Mortgage Relief and have spent the past year listening to hundreds of families across the Palisades and Altadena navigate a financial system that was simply not built for what we are living through.

That experience is what brings us to Assembly Bill 1847. The California Bankers Association recently argued that this bill — which would extend and strengthen mortgage protections established under last year’s fire emergency mortgage relief law, AB 238 — could end up restricting access to credit. 

We want to engage with that, because we think it gets the situation almost entirely backwards.

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AB 238 gave people whose homes burned up to 12 months of mortgage forbearance. But the rebuilding timeline in the Palisades and Altadena is not 12 months. Debris removal, utility restoration, insurance disputes, permit approvals, contractor shortages and construction inflation have made this a multi-year process for virtually everyone we work with. 

The original forbearance framework was built around a recovery timeline that does not exist in reality. Now that fire survivors’ forbearance periods are expiring, we are watching the consequences in real time: Families who were current on their mortgages before the January 2025 fire — who followed every rule — are seeing their credit scores fall by 200, 300, even 400 points. 

Some are being pushed toward foreclosure. Some are being handed balloon payments of $100,000 or more, due at the exact moment they are trying to finance construction.

This is not a story about irresponsible borrowers. These are teachers, small business owners, young families who made these neighborhoods what they were. Most still desperately want to come home. But the financial pressure is forcing many of them out for good.

We understand lenders need predictable rules and functioning credit markets. California cannot solve one crisis by creating another. But the greater threat to future lending is not temporary forbearance; it is mass borrower failure, collapsing credit, abandoned rebuilds and neighborhoods that never recover.

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AB 1847 does not forgive debt. It does not eliminate lender rights. It does not tell banks they won’t be repaid. It allows payments to be deferred during rebuilding and moved to the loan’s back end. 

The CARES Act, which gave borrowers of federally-backed mortgages up to 360 days’ relief during the COVID-19 pandemic, demonstrated that similar structures were operationally feasible on a national scale. 

For many families, freeing up two or three years of principal and interest and applying that money to construction is the difference between rebuilding and permanently leaving. It requires no taxpayer money; it simply restructures debt that already exists so families have a realistic chance to come home.

In our case, my family is still in Tennessee, saving every dime we can to hopefully afford to rebuild the home we lost.

Climate events are no longer temporary and localized. They destroy entire communities at once and displace families for years. The financial infrastructure around homeownership needs to catch up to that reality.

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The question before California is simple: when disaster survivors are trapped between a destroyed home and a mortgage system that no longer matches modern recovery, will we force families into financial collapse or adapt the system to the world we now live in?

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.



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