Dennis Falaschi, 75, is facing theft and conspiracy charges.
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He was the general manager for Panoche Water District in Fresno and Merced counties.
According to court documents, he exploited a leak in the Delta-Mendota Canal and engineered a way to steal over $25 million in federally-owned water.
Investigators say he used that money to pay himself and others excessive salaries, fringe benefits and personal expense reimbursements.
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Falaschi is now facing up to ten years in prison and a fine of $250,000.