Newport man pleads guilty to fraud that funded Vegas gambling scheme

A Newport Beach man accused of stealing millions of dollars from investors in his dental company and gambling the money in Las Vegas pleaded guilty Monday in federal court.

William Keith Knox, 54, faces a maximum of 20 years in prison at his sentencing in September. But a lawyer on his defense team said Knox could receive probation instead.

Knox’s plea follows through on an agreement he signed last month promising that he would admit to one count of felony wire fraud in exchange for prosecutors dropping five similar counts.

The chance of avoiding time behind bars was a significant factor in Knox’s decision to plead guilty, according to defense attorney Michael Cristalli.

“That’s not to say that he didn’t think he had defenses going forward,” Cristalli said.

The fraud scheme used Knox’s dental equipment company, Osseous Technologies of America, to fund gambling trips.

According to a federal indictment in 2013, Knox asked investors for hundreds of thousands of dollars at a time to prop up Osseous. But instead of using the cash on the business, he would withdraw the money with a cashier’s check and quickly deposit it into gaming accounts at casinos including Bellagio and The Venetian.

The indictment lists three investors from whom Knox allegedly took $3.5 million, but federal prosecutors said there are more victims who were not revealed in court filings.

Knox could be responsible for paying up to $8 million in restitution, Assistant U.S. Attorney Daniel Ahn said last month.

Knox’s defense argues he isn’t responsible for any repayment, according to the plea agreement.

A judge will decide the final number.

Federal authorities will prepare a report recommending a sentence.

Knox is free on a $125,000 surety, according to court records.