Man pleads guilty to thefts from funds in N.D. town

BISMARCK — A man who headed the fire department and the airport authority in the small northwestern North Dakota town of Tioga has pleaded guilty to illegally possessing a machine gun and stealing more than $300,000 meant for airport and fire department improvements.

Eugene Knutson, a 59-year-old who worked at his family’s flying business in Tioga, was known for volunteering on boards and commissions in the town of about 1,100 people. Tioga officials said Knutson betrayed their trust.

Harold Sundhagen, the new chairman of Tioga’s Airport Authority, said the group has scrambled to come up with funds to pay for runway improvements.

“The project has been completed but it’s not all paid for,” Sundhagen said Tuesday. “It’s been a real hardship. We still owe money to the contractor and we have a note at the bank for a substantial amount.”

Knutson, who was the chairman of the Tioga Airport Authority and president of the city’s fire department, pleaded guilty on Monday to two counts of theft from programs receiving federal funds and one count of possession of an unregistered firearm.

“Restitution will be ordered,” said Jodi Lynn Colling, Knutson’s Bismarck-based defense attorney. “The total figure is still being calculated.”

Court records said Knutson stole the money from the Airport Authority between April 2006 and September 2008.

Assistant U.S. Attorney Rick Volk said Knutson took more than $246,000 in Tioga airport runway improvement money and more than $62,000 meant for fire department equipment.

The state Aeronautics Commission said Tioga’s Airport Authority received $1.7 million in federal funds for expansion of city’s runway to accommodate jet traffic. The project, which included new runway lighting, was needed because of the increased activity in the state’s oil patch in western North Dakota, the agency said.

The project was completed in October, but contractors complained of delayed or missing payments, authorities said.

Prosecutors said the thefts from the city fire department, between 2005 and 2007, represent more than half the federal money the department was allotted for equipment replacement.

Knutson also served on a cemetery board in Tioga. But prosecutors said an investigation found no evidence of money missing from the cemetery group.

Knutson was charged in October. He was placed in home detention in January after pleading not guilty to embezzlement and illegal weapons charges. Volk said the home detention condition was lifted on Monday after Knutson pleaded guilty.

Sentencing has been set for Dec. 7 in Minot. Knutson faces a maximum penalty of 30 years in prison and a $750,000 fine.

Tags: fire department, news, crime, theft, money, tioga, airport, weapon, possession