An obscure farm-irrigation agency in the San Joaquin Valley, the Panoche Water District has been struggling with a monumental scandal the past three years, with top officials under criminal indictment for embezzling public funds and illegally dumping toxic waste.

It turns out the district has also been allegedly taking water from the federal government.

Earlier this year Panoche agreed to pay the U.S. Bureau of Reclamation nearly $7.5 million to compensate for “unauthorized diversion of water” from two federal canals, according to a settlement agreement obtained by The Bee.