Newport man blew investors’ millions gambling in Vegas, feds say
A Newport Beach man who allegedly secured millions from investors for his dental equipment company blew the money gambling in Las Vegas and paying for his children’s private-school tuitions, according to a federal indictment.
William Knox is charged with six counts of wire fraud for taking investment money for his company, Osseous Technologies of America, but spending the money on himself instead, the indictment says.
Knox raised at least $3.5 million — including $1.5 million from an investor in Pasadena — from 2010 to 2012, says the indictment, which was handed down this month.
Knox allegedly also convinced a Laguna Beach resident to wire $200,000 for a 30-day loan, saying it would help keep the business running and that another dental company would preparing to buy Osseous for $10 million.
But the same day that the $200,000 arrived in his company’s bank account, Knox allegedly withdrew the money in cashier’s checks and deposited it in a gambling account at the Venetian casino in Las Vegas, the document alleges.
Court documents describe Knox as following a similar pattern with the Pasadena investor, whose money ended up at another casino.
Using a hidden recorder planted on one of his alleged victims, FBI agents recorded Knox admitting he gambled away the money, according to court documents. The tape reportedly recorded Knox saying he contemplated suicide after he realized that his alleged fraud would be uncovered.
Knox went on to say that he was committed to a mental facility after he told a therapist he’d thought of killing himself and his family, according to an FBI agent’s description of the recording.
Agents arrested Knox on Nov. 18 after prosecutors filed a criminal complaint. The grand jury indictment was unsealed Dec. 4.
Knox has pleaded not guilty and is free on a $125,000 bond. An attorney for Knox said she had little to say yet about the case.
“I’m still waiting to get any evidence from the government,” said the lawyer, Stephanie Ames.
Jeremiah Dobruck writes for Times Community News
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