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The Calleguas Municipal Water District in Ventura County claims a tanker truck filled up more than a dozen times over the past two years.
It said the water was delivered to the Magnum PI star's nearby 60-acre ranch, where he grows avocados.
The district is seeking a court injunction preventing Selleck from taking any more water.
The most recent incident was in March, when the same truck was spotted taking water in the town of Thousand Oaks and taking it to the actor's ranch in Westlake Village on four consecutive days.
The complaint added the location of the water hydrant was in a different area than the water district that serves the actor's ranch.
The district said it sent Selleck a cease-and-desist order in November 2013, warning it would take legal action if he did not stop taking the water.
In addition to the injunction, the district is also seeking to recoup its legal fees and investigative costs.
In documents filed at Ventura Country Superior Court, the complaint said the Calleguas Municipal Water District spent nearly $22,000 (£14,300) to hire a private investigator from 2013-15 to record the thefts
..... However, after the district hired a private investigator to look into Selleck’s water usage, it has been confirmed that the “Magnum, P.I.” star paid for his water.
According to ABC News, it turns out that a construction company Selleck worked with actually paid a fee to secure the rights to draw water from the city hydrant two years ago, according to Jay Spurgin, public works director for Thousand Oaks:
“There was water used during that time, and it was paid for.”
The deal allows these companies to haul as much water as they want for special projects. They can then sell the water to a third party, as long as that party pays their monthly service charge and water bills.