Hard to say. Perhaps you could have that Webelos Scout teach knife safety under the supervision of adult leaders. Or remove his Whittling Chip and require him to re-earn it. Make sure his parents back you up on the decision that this boy should not be in possession of a knife at any time until it is re-earned. It can be difficult to enforce if the parents undermine the situation and allow the boy to handle a knife outside of scouting functions. Other than that, I don't think there is much else you can do.
