Grand jury charges man with stealing investment money

A Newport Beach man allegedly secured millions of dollars in investments for his company and instead blew the money gambling in Las Vegas, according to a grand jury indictment.

William Knox is charged with six counts of wire fraud for taking loans to fund his dental equipment business in Newport but then spending the money on himself, according to federal court documents.

He raised at least $3.5 million — including $200,000 from a victim in Laguna Beach — between 2010 and 2012, says the indictment, which was filed earlier this month.

Although he promised that the money would fund his company, Osseous Technologies of America, Knox gambled it away or used it to pay for private school tuition for his children, according to the charges.

Knox allegedly convinced his Laguna Beach victim to wire $200,000 for a 30-day loan, saying it would help keep the business running and that a dental company would soon 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 as cashiers' checks and deposited it in a gambling account at The Venetian casino in Las Vegas.

Court documents describe Knox as following a similar pattern with $1.5 million from an investor in Pasadena 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 as 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 came a few weeks later, on Dec. 4.

Knox pleaded not guilty on Dec. 9 and is out of jail on a $125,000 bond. He's barred from soliciting any investments as a condition of his bail.

An attorney for Knox said she had little to say about the case yet.

"I'm still waiting to get any evidence from the government," said the lawyer, Stephanie Ames.

Knox is due back in federal court in Santa Ana in May.

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