Two former water officials face 50-count indictment in bribery scheme

A Clark County grand jury returned a 50-count indictment Wednesday against two former water officials in a $1.3 million bribery scheme.

The indictment adds 25 felony money laundering charges against Robert Coache, a retired deputy state engineer with the Nevada Division of Water Resources, and Michael E. Johnson, a former chief hydro­logist for the Virgin Valley Water District.

The two men are accused of unlawfully taking a $1.3 million kickback to help a wealthy Bunkerville landowner sell Virgin River water rights to the Southern Nevada Water Authority for $8.4 million.

Coache, 52, and Johnson, 51, also are facing charges of bribery, extortion, conspiracy and misconduct by a public officer.

Prosecutors allege 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.

Coache and Johnson are alleged to have laundered the cash through a series of transactions that included the purchase of several homes for themselves and family members and the investment of $438,500 in Texas oil speculation.

In court Wednesday, Chief Deputy District Attorney Marc DiGiacomo sought to double the bail for both defendants to $500,000 because of the additional charges filed by the grand jury. He said investigators also have yet to recover nearly $1 million of the alleged bribe money, which makes the defendants flight risks.

But District Judge Elissa Cadish, who accepted the indictment, decided to keep bail at $250,000 each.

Cadish ordered both Coache, who was released on $250,000 bail last week, and Johnson, who is being held at the Clark County Detention Center, to appear for arraignment before District Judge Abbi Silver on June 2.

Several of Johnson’s family members were on hand for the indictment’s return, and his lawyer, Blaine Beckstead, suggested he might be able to make bail.

If he does, he’ll have to prove to prosecutors that the money he posts isn’t coming from his alleged ill-gotten gains, Cadish said.

Before the indictment, a 25-count criminal complaint against Coache and Johnson was dismissed in Las Vegas Justice Court.

Coache’s lawyer, Bret Whipple, has argued that investigators “missed the mark” in the case, which he called a “tremendous misunderstanding.”

And on Wednesday, Beckstead told Cadish that Johnson never tried to hide his share of the $1.3 million and even paid taxes on it.

DiGiacomo later acknowledged that Johnson paid the Internal Revenue Service roughly $200,000.

But the prosecutor also argued that police have well-documented the illicit financial dealings of both men.

The indictment 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 indictment alleges.

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

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