David Raleigh Knott Pleads Guilty in U.S. Federal Court
The United States Attorney's Office announced that during a federal court session in Missoula, on June 22, 2012, before U.S. District Judge Dana L. Christensen, DAVID RALEIGH KNOTT, a 59-year-old resident of Creston, Washington (formerly or Ronan), pled guilty to supplemental social security income benefit fraud. Sentencing has been set for October 5, 2012. He is currently released on special conditions.
In an Offer of Proof filed by Assistant U.S. Attorney Bryan R. Whittaker, the government stated it would have proved at trial the following:
From approximately May 2008, and continuing until approximately February 2011, KNOTT concealed and failed to disclose income earned while working for the Missoulian newspaper, in order to continue to receive Supplemental Security Income ("SSI") benefits payments made by the Social Security Administration ("SSA") to him.
On March 6, 1997, KNOTT applied for SSI benefits at the SSA office in Washington. He was advised that it is a crime to misrepresent facts affecting his eligibility for SSI. Between October 2002 and November 2008, SSA sent KNOTT four "Notice of Change in Payment" letters and three other letters, each advising him of his legal reporting responsibilities for events affecting his eligibility for SSI. KNOTT was advised that working and earning income were both facts that must be reported because these events could affect his eligibility for SSI.
During 2008, 2009, and 2010, KNOTT entered into employment contracts with the Missoulian to deliver newspapers. On a 2010 employment contract with the Missoulian, KNOTT used his son's Social Security Number ("SSN") in an attempt to conceal his work status and income from the SSA. On a 2009 employment contract, KNOTT used a false SSN in an attempt to conceal his work status and earned income from the SSA. On a 2008 employment contract, KNOTT utilized his son's SSN on both the contract and a W-9 application in an attempt to conceal his work status and earned income from the SSA.
KNOTT did in fact deliver the newspaper and was paid for doing so. For example, the 2010 employment contract specified that KNOTT was paid $3,108 every 28 days for delivering the newspaper.
KNOTT never reported to the SSA that he had been working or that he was earning income from the Missoulian. Both the fact that he was working and the fact that he was earning income were events required to be reported to the SSA because these events would affect his eligibility for SSI benefits. KNOTT's failure to report resulted in an overpayment of SSI benefits to him of more than $15,000.
SSA agents interviewed KNOTT as his residence. KNOTT verified his initial SSI application and acknowledged his legal reporting responsibilities to the SSA. KNOTT admitted to using his son's SSN and making up the other SSN. He stated that he knew it was illegal to misuse a SSN, but did so to conceal his income from the SSA so he could continue to collect SSI payments. KNOTT completed a sworn statement and has admitted to failing to report his income.
KNOTT faces possible penalties of 5 years in prison, a $250,000 fine and 3 years supervised release.
The investigation was conducted by the Social Security Administration - Office of Inspector General.