Not guilty pleas for 4 in Nevada water fraud case |

Not guilty pleas for 4 in Nevada water fraud case

RENO, Nev. (AP) ” A federal judge entered not guilty pleas Tuesday for the Truckee Carson Irrigation District and four of its employees accused of falsifying records to secure extra water supplies from the U.S. government.

U.S. Magistrate Judge Robert McQuaid Jr. also agreed during a brief hearing to allow all four men to remain free without bail. He set their trial for Feb. 23.

The four include David Overvold, 58, the project manager for the irrigation district based in Fallon, and Lyman McConnell, 64, the district’s lawyer.

They are charged in an indictment handed up Dec. 5 with conspiracy to defraud the U.S. Bureau of Reclamation, falsification of records, false claims and false statements.

Prosecutors say they were part of a scheme to inflate water delivery data so as to secure extra water credits from the bureau to boost supplies primarily for area farmers and ranchers from 2000-05.

If convicted, they could face 20 years or more in prison.

Overvold, McConnell, Shelby Cecil, 65, and John Baker, 63, all of Fallon, told the judge Tuesday they understood the charges against them but had little else to say.

Cecil, who was on oxygen, said he has lung cancer.

A lawyer for each asked the judge to enter a plea on their behalf.

Ernie Schank, director of the TCID Board, appeared in court on behalf of the district itself on Tuesday with Michael Van Zandt, a San Francisco lawyer representing the district, and Scott Edwards, a Reno lawyer who intends to assist locally.

Lawyers for TCID and the four defendants said in a joint statement last month the four “believe that the charges are completely unfounded and that TCID and the individuals will defend themselves vigorously against these charges.” They declined comment on Tuesday.

Under a contract with the Bureau of Reclamation, the district operates the irrigation system in northern Nevada’s Newlands Project created more than a century ago.

Assistant U.S. Attorney James Keller asked during the 30-minute hearing Tuesday whether TCID was covering the legal fees for the four individuals or if they were paying for their own lawyers.

McQuaid said he thought that was a private matter but Keller said it specifically was not a matter of attorney-client privilege in a case like this.

Keller said he wanted to know because there may be a conflict in regard to the board’s interests and the personal interests of Overvold and McConnell. He said he would pursue the matter with their lawyers ” Scott Freeman of Reno for McConnell and Craig Denney of Reno for Overvold ” but that he may end up filing a motion seeking a disclosure of the financial arrangement.

Cecil is being represented by Reno lawyer Donald Evans. Barker is represented by federal public defender Vito de la Cruz of Reno.

The TCID board announced last month it was laying off 23 of the district’s 44 employees due to budget shortfalls.

Keller said in court Tuesday the criminal case is “complex.” He submitted more than 4,500 pages of documents into evidence.

As part of a water efficiency incentive policy adopted in 1988, the bureau agreed to provide credits to the district that would allow it to boost its share of water supplies from area dams and reservoirs owned by the bureau.

The 10-count indictment accuses Overvold, McConnell, Cecil and Baker of inflating those efficiency rates in part by recording water deliveries that were not made and tampering with water meters that recorded water flow data.

The indictment said the four “knowingly combined, conspired and agreed among themselves … to defraud the United States by impairing, impeding, obstructing and defeating the lawful functions” of the bureau “through deceit, craft, trickery and dishonest means.”

The fraud resulted in the district receiving 45,000 acre feet of water in the form of incentive credits from 2000 through 2005, the indictment said. One acre foot is equal to about 326,700 gallons of water.

During a normal water year, the district delivers about 270,000 acre feet of water to about 2,500 water users. The water originates primarily in Lake Tahoe, flowing down the Truckee River through Reno and into a series of canals and other dams. Some of the water reaches the Lahontan Reservoir near Fallon, about 60 miles east of Reno.

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