Newport man to plead guilty to defrauding investors in dental company

A Newport Beach man agreed Friday to plead guilty to wire fraud for bilking investors in his dental equipment company out of millions of dollars by gambling away their money in Las Vegas, according to federal court documents.

William Keith Knox, 55, could be sentenced to up to 20 years in prison, though federal authorities are still determining what punishment to recommend.

“It will definitely be below the 20-year max,” Assistant U.S. Attorney Daniel Ahn said Wednesday.

Knox’s lawyer did not return a call seeking comment Wednesday.

According to a federal grand jury indictment in 2013, Knox raised $3.5 million from three investors on the pretext that the money would fund his business, Osseous Technologies of America.

Prosecutors believe Knox had more victims who were not included in the criminal charges, Ahn said.

Knox owes almost $8 million in restitution, prosecutors said in a plea agreement signed last week and filed Tuesday.

As early as 2010, Knox began asking investors for hundreds of thousands of dollars at a time, according to the indictment.

He would then withdraw the money from a company bank account and purchase a cashier’s check that he would deposit in a gambling account at a casino such as Bellagio or The Venetian.

Federal prosecutors also accused Knox of eliciting investments by faking documents to make it seem like his company was on the verge of a lucrative deal or about to be acquired for millions of dollars.

Knox originally faced six felony counts of wire fraud, to which he pleaded not guilty, but the plea agreement indicates prosecutors will drop all but one count in exchange for his admission of guilt.

A hearing to change Knox’s plea is scheduled for March 2. He is free on a $125,000 surety, according to court records.

A judge will have final say over Knox’s sentence and the amount of restitution.

Knox was arrested in November 2013 after the FBI recorded what it said was his admission of the scheme to one of the victims.

According to court documents, Knox said on the recording that he considered suicide when the con began to unravel and that he had been committed to a mental facility for a time “because he told a therapist that he had thoughts about killing himself and his family.”