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Published February 08, 2010, 03:08 PM

Ex-ND airport official gets prison for theft

BISMARCK, N.D. (AP) — A federal judge on Monday sentenced the former chairman of the Tioga Airport Authority to three years and one month in prison for stealing more than $300,000 in federal grants intended for a new runway and equipment for the town's volunteer fire department.

By: DALE WETZEL, Associated Press

BISMARCK, N.D. (AP) — A federal judge on Monday sentenced the former chairman of the Tioga Airport Authority to three years and one month in prison for stealing more than $300,000 in federal grants intended for a new runway and equipment for the town's volunteer fire department.

Eugene Knutson, 59, was also ordered to pay almost $310,000 in restitution. He will be placed on three years of supervised probation when he is released from prison.

"This was clearly a crime of greed and opportunity," U.S. District Judge Daniel Hovland told Knutson during sentencing. Describing Knutson as a "con man," Hovland told him, "You have violated a public trust that can never be repaired."

Knutson earlier had pleaded guilty to felony charges that he stole almost $247,000 in federal grants intended for runway construction at the Tioga airport, and of taking more than $62,000 meant to buy equipment for the fire department. He also pleaded guilty to a third felony charge of possessing an unregistered machine gun.

Knutson had been in charge of paying bills at both the fire department and the Tioga Airport Authority. Court documents say the thefts occurred between January 2006 and September 2008.

"I need to apologize to absolutely everybody for the trouble that I have caused," Knutson said during the sentencing hearing. He declined comment afterward.

Tim Sundhagen, vice president of Tioga's rural volunteer fire department, said during the hearing that Knutson's actions had "torn our department apart."

Aside from embezzling the federal funds, Knutson insisted that fire department equipment for handling hazardous materials that he had never purchased had instead gone missing, sending volunteer firefighters "on a wild goose chase for equipment that didn't exist," Sundhagen said.

Rick Volk, an assistant U.S. attorney, said authorities had raised about $107,000 in restitution by selling more than 400 guns that Knutson acquired with some of the stolen money. Knutson's probation terms say he must pay at least $1,000 monthly in restitution within two months after he is released from prison.

Knutson said he intended to pay "every dollar's worth" of restitution.

Hovland noted that Knutson transferred ownership of six airplanes and numerous vehicles to his brother after the felony charges were filed and that he said he was not paid for working as a pilot and mechanic at the family's business.

Knutson was evasive when Hovland asked him about the timing of the transfer of ownership of the planes. His sentence begins March 9 and the judge suggested he use the time until his sentence begins to pay the restitution he still owed.

"If you want to put an end to the games," the judge told Knutson, "then here is your opportunity."

Federal prosecutors had recommended the 37-month sentence, which was the harshest suggested by federal sentencing guidelines. Knutson's attorney, Jodi Lynn Colling, had requested the minimum of 30 months.

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