Judge reduces bail for water officials in bribery scheme

Las Vegas Justice of the Peace William Jansen on Thursday reduced the bail of two former water officials charged in a $1.3 million bribery scheme.

Jansen cut the bail from $500,000 to $250,000 for both Robert A. Coache, 52, a retired deputy state engineer with the Nevada Division of Water Resources, and Michael E. Johnson, 51, a former chief hydrologist for the Virgin Valley Water District. The two Las Vegas men are in custody at the Clark County Detention Center.

They face bribery, extortion and money-laundering charges in a 25-count criminal complaint that accuses them of unlawfully taking a $1.3 million kickback to help a wealthy Bunkerville landowner sell water rights to the Southern Nevada Water Authority for $8.4 million.

Chief Deputy District Attorney Marc DiGiacomo opposed the bail reduction, arguing that Coache and Johnson had stolen $1.3 million from taxpayers.

DiGiacomo told Jansen that the two former officials funneled the money they received from John Lonetti Jr. through a company called Rio Virgin LLC. Lonetti, 77, has not been charged in the case .

DiGiacomo said Coache and Johnson laundered the cash through a series of transactions, including the purchase of several homes for themselves and family members, and investing $438,500 in a Texas company that speculates in oil.

Calling the charges "serious," Jansen set a May 25 preliminary hearing and ordered a hearing on the source of bail money. Prosecutors expect to take the case to a county grand jury.

In seeking to get Coache released on his own recognizance, defense lawyer Bret Whipple argued that investigators had "missed the mark" and that the case was a "tremendous misunderstanding."

On Wednesday, Whipple told the Las Vegas Review-Journal that Coache does not know Lonetti and did not get any of the $1.3 million. He said his client did not commit any wrongdoing and was the victim of a power struggle over water in the small community of Mesquite.

But DiGiacomo disputed Whipple's claims in court on Thursday, saying police have documented through financial records that Coache did receive a share of the cash from Lonetti. The prosecutor said he was concerned that both defendants might try to use their ill-gotten gains to bail themselves out.

In arguing against reducing bail, DiGiacomo told Jansen the men were flight risks in part because of the large amount of money they have access to in Texas.

Johnson tried to flee with his computer after he got word that police were raiding his home, but he later was arrested, DiGiacomo said.

Coache tried to influence the testimony of a key witness, the accountant who helped the two suspects set up the Rio Virgin partnership, DiGiacomo said.

The criminal complaint alleges Coache and Johnson carried out the bribery scheme between Jan. 1, 2006, and May 21, 2008, while both men had their public jobs. They continued to launder the proceeds from the bribe until Sept. 13, the complaint alleges.

Coache retired from his state job in May 2010, and Johnson resigned under fire from the Virgin Valley Water District in August.

Contact Jeff German at jgerman@reviewjournal.com or 702-380-8135.