A former general manager of a water district in central California indicted in 2022 on charges of siphoning tens of millions of dollars worth of water from a federal canal and selling it to local farmers and water districts—who has maintained his innocence—is expected to change his plea this month, according to court documents.

Dennis Falaschi, 75, is charged with conspiracy, theft of government property and filing false tax returns, according to the U.S. Attorney’s Office for the Eastern District of California.

According to court documents, beginning around 1992, Mr. Falaschi, who oversaw the Panoche Water District, allegedly exploited a leak in the Delta-Mendota Canal—part of the state’s Central Valley Project, which brings water to a portion of the San Joaquin Valley—and engineered a way to steal over $25 million in federally owned water until 2015.

Mr. Falaschi was notified that cement on an abandoned gate in the canal had cracked and was leaking water, according to court documents.

He is accused of directing employees to install mechanics that both diverted the leaking water into the Panoche Water District’s canal and to conceal the equipment, according to The Associated Press.

Authorities allege Mr. Falaschi sold the stolen water to customers or pumped it back into the canal for credits and used the proceeds to pay himself and others exorbitant salaries, fringe benefits, and personal expense reimbursements.

The diversion of the water was only discovered in 2015 when the drought reduced water levels low enough for the set-up to be seen, according to The Associated Press.

In 2018, state prosecutors pressed felony charges against Mr. Falaschi, alleging misappropriation of public funds. They said he “ran the district as his own personal operation and bank account, spending excessive amounts of district money using credit cards” issued by the water district to cover housing and vehicle expenses for his staff, as well as indulging in slot machines, concert tickets, home renovations, and more.

Court documents indicate Mr. Falaschi’s failure to disclose income obtained from the alleged private water sales to the Internal Revenue Service. As such, he additionally faces charges of submitting fraudulent tax returns from 2015 to 2017.

In the federal grand jury indictment, he is accused of orchestrating the theft of government water and falsifying his income on tax returns. The indictment claimed he earned close to $900,000 in salary and unreported income solely in 2016.

If found guilty of theft of government property, Ms. Falaschi faces a maximum penalty of 10 years in prison and a fine up to $250,000. If convicted of conspiracy, he could see a maximum of five years in prison and another $250,000 fine. Finally, if convicted of the tax charges, he faces a maximum of three years in prison and another fine of up to $250,000.