Rhode Island man found guilty of money laundering, mail fraud

(Published in The Providence Journal on March 17, 2011)

PROVIDENCE -- Prosecutors portrayed Johnston art dealer Rocco P. DeSimone as a confidence man whose persuasive powers peeled millions of dollars and assets from marks ranging from a wealthy businessman to a Warwick janitor. DeSimone could not convince a jury he was a victim. DeSimone, 57, was found guilty in U.S. District Court Wednesday of money laundering and seven counts of mail fraud. DeSimone fleeced an inventor and various investors out of more than $6 million in cash, assets and forgiven debt, the prosecution said during a two-week trial. The jury, which deliberated for 17 hours over three days, found DeSimone not guilty on two mail fraud counts. The crimes, done to support a lavish lifestyle, authorities said, occurred in 2006 and 2007 while DeSimone was free on bail while appealing a federal conviction for income-tax fraud. DeSimone, who will be sentenced on July 14, faces up to 20 years in prison and a $250,000 fine for each mail fraud count. For money laundering, he faces 10 years in prison and a potential fine of $250,000. In addition, the federal government will seek forfeiture of money and assets including a $180,000 2006 Ford GT sports car, a painting by Pierre-Auguste Renoir known as "Paysage à Cagnes" and nine Japanese swords. The trial centered on events surrounding three inventions. In 2005, Dr. Robert McKittrick, an inventor and former Massachusetts state trooper, patented the Drink Stik, designed to let soldiers drink fluids while wearing gas masks. According to prosecutors, DeSimone told McKittrick that he knew Fidelity Investments chief executive Edward "Ned" Johnson III, and that Johnson was going to buy the Drink Stik for millions of dollars. DeSimone claimed to potential investors that Fidelity, Raytheon and/or Tyco International had offered to buy rights to the Drink Stik for millions of dollars, and that big paydays awaited people who invested. They anted up a total of about $1.2 million in money and $4.9 million in forgiven debts and other property, including artwork, Japanese swords and artifacts. The prosecution said DeSimone sometimes brought prospective investors to his home, showing them artwork and swords, and regaling them with a story about a safari he went on during which he killed a lion. Among the investors was Frederick Weissberg, of California, who wired $600,000 to a bank account held in the name of DeSimone’s wife, according to the U.S. Attorney's office. Also investing was Warwick school janitor Paul Gregson, who invested $35,000 of his life savings after, the prosecution said, he was told he stood to make $1 million. In fact, DeSimone had not met Fidelity's chief executive and there were no done deals with companies, the prosecution said. The big money never came, said multiple investors-turned-witnesses against DeSimone, who took the witness stand in his own defense last week.

DeSimone pleaded guilty in January 2010 to the money laundering and mail-fraud charges, but withdrew his plea two months later, citing what he said were previously unknown FBI recordings.

DeSimone "is a serial con man, who for years has duped people into parting with their money through one elaborate fraudulent scheme after another," U.S. Attorney Peter F. Neronha said in a statement Wednesday. The defense had countered that DeSimone was the victim of greed by his accountant, Ronald Rodrigues, and by McKittrick. DeSimone believed a Raytheon deal was going to happen based on what he said he was told, the defense maintained. DeSimone’s lawyer, Thomas F. Connors, argued that McKittrick wanted to get control of the company built around the Drink Stik and that Rodrigues signed off and mailed out subscriptions and other documents to the individual investors. And, the defense argued, some witnesses are plaintiffs in a lawsuit who stand to gain money from DeSimone. "I think there was more than enough reasonable doubt in all the counts, but that's their decision," Connors said of the jury's verdict. DeSimone, who has been held at the federal Donald W. Wyatt Detention Facility in Central Falls, served time in New Jersey for a 2005 federal conviction of filing a false tax return in which he understated earnings from sales of famous masters' artwork. He walked away from the medium security prison on March 15, 2008, after learning federal agents searched his home in connection with the mail-fraud and money-laundering case. DeSimone surrendered after two days of freedom.