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Published June 02, 2009, 03:18 PM

Man accused of taking town's fire department funds

BISMARCK, N.D. (AP) — A former town official accused of illegally possessing guns and stealing federal money intended for airport improvements is facing more charges, this time alleging he embezzled money from the city's fire department.

By: JAMES MacPHERSON, Associated Press

BISMARCK, N.D. (AP) — A former town official accused of illegally possessing guns and stealing federal money intended for airport improvements is facing more charges, this time alleging he embezzled money from the city's fire department.

Eugene Knutson, who was chairman of the Tioga Airport Authority and president of the city's fire department, has pleaded not guilty to five counts of theft from programs receiving federal funds.

Authorities say he embezzled more than $10,000 in Tioga airport runway improvement money and more than $15,000 meant for fire department equipment.

Attempts to reach Knutson on Tuesday at his listed telephone number in Tioga were not successful. Defense attorney Jodi Lynn Colling did not return a phone message to The Associated Press.

Assistant U.S. Attorney Rick Volk said the thefts from the Tioga Fire Department, between 2005 and 2007, represent more than half the federal money the department was allotted for equipment replacement.

He is accused of taking money from the Tioga Airport Authority between April 2006 and September 2008, court records say.

Volk said a shortened-barreled shotgun and an illegal silencer were seized from Knutson during the probe of the missing airport funds. He has pleaded not guilty to unlawful possession of a machine gun and three counts of possession of an unregistered firearm.

Knutson's trial is slated for Aug. 18 in federal court in Minot. Knutson has been placed in home detention while he awaits a trial, Volk said.

The state Aeronautics Commission said the Tioga 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.

Volk said Knutson also served on a cemetery board in Tioga, a town of about 1,100 people in northwest North Dakota. An investigation has found no evidence of money missing from the cemetery group, Volk said.

Mayor Paul Slaamot would not comment Tuesday about the missing money meant for airport improvements and fire department equipment. He said Knutson was regarded as civic-minded for his participation on local boards.

"He was willing to serve — that's the only thing you can say about him," Slaamot said.

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