Dennis Falaschi, 75, is facing theft and conspiracy charges.
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.
Falaschi is now facing up to ten years in prison and a fine of $250,000.