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Convicted tax evader pleads not guilty to mail fraud charges

01:00 AM EDT on Saturday, March 21, 2009

By Thomas J. Morgan

Journal Staff Writer

PROVIDENCE — Pale and clad in prison garb, Johnston art dealer and tax evader Rocco P. DeSimone yesterday pleaded innocent to a new indictment that charges him with cheating investors out of millions of dollars.

“Not guilty on all counts,” DeSimone’s lawyer, Richard K. Corley, told Magistrate Judge Lincoln D. Almond in U.S. District Court. Almond ordered DeSimone held pending a bail hearing on Friday.

DeSimone was to have been released from a federal prison today after serving a term for tax evasion that was extended when he escaped from confinement in March of last year only to surrender to authorities three days later.

The new indictment charges mail fraud and the commission of a crime involving the wiring of $500,000 from one of the victims to a bank account controlled by the defendant.

As for the possible outcome of next week’s bail hearing, Assistant U.S. Attorney Lee H. Vilker has already made it clear that the prosecution will work strenuously to keep DeSimone behind bars while he awaits trial, which was scheduled for June.

Vilker earlier this week filed a motion to keep DeSimone confined, contending that “no conditions can reasonably assure his appearance at future proceedings and because he is unable to abide by the standard conditions of release.”

Calling him “a career con man” with a strong motive to flee, Vilker painted DeSimone as “a 56-year-old man facing a very lengthy prison sentence.” He said the combined maximum sentences under the counts with which DeSimone has been charged, amount to 210 years.

And he noted that DeSimone already had demonstrated a desire to escape custody because of last year’s escape from what had been a 27-month sentence at the Fairton Federal Correctional Facility in New Jersey.

Vilker said that the new crimes with which DeSimone has been charged occurred during a period when he had won release from prison on bail while appealing his tax-evasion conviction.

“Indeed, virtually all of the acts alleged in the indictment took place between May 2006 and July 2007, when he was released on bail pending appeal. Defendant has already once demonstrated disregard for this court’s order. The same mistake should not be repeated,” Vilker said in his motion to detain DeSimone.

He continued, “Defendant needed the fraud proceeds to pay for both his everyday expenses and to support his lavish lifestyle. If DeSimone is released pending trial, he will be without any means of legitimate income and will continue to resort to defrauding those around him to pay for his living expenses.”

The indictment mentions flashy cars, works by French artists Pierre Auguste Renoir and Claude Monet, Japanese swords and big international corporations.

According to federal guidelines dealing with offenses committed by a defendant on bail, it could mean up to 18 additional months tacked on to whatever term is imposed if DeSimone is convicted.

According to the indictment:

DeSimone, beginning in May 2006, persuaded Robert McKittrick — a medical doctor who obtained a patent for a device known as the “Drink Stik,” which allowed wearers of protective gear to consume fluids without removing the gear — that he, DeSimone, was a personal friend of the chief executive officer of Fidelity Investments. He said that the CEO, referred to variously as “Jimmy Johnson,” or “Ned Johnson,” had agreed to buy the Drink Stik invention for millions of dollars.

DeSimone, to persuade McKittrick that he was capable of raising large sums, told McKittrick fraudulently that he had recently sold a painting by Monet on behalf of David Lindsay, a friend of McKittrick’s.

As a result, McKittrick agreed to give DeSimone a one-third interest in McKittrick’s company.

McKittrick also invented the “Song Tube,” described as an improved gastrointestinal apparatus. In August 2006, DeSimone persuaded McKittrick that he could market the invention, and received a third of the rights to sell and distribute it.

But the truth was that DeSimone had never met the CEO of Fidelity Investments, Edward “Ned” Johnson III.

DeSimone also allegedly insisted that it was a “done deal” that the Raytheon Co. had agreed to purchase the Drink Stik for millions of dollars.

In fact, Raytheon had told DeSimone in December 2006 that it had no interest in buying Drink Stik.

The money that DeSimone raised as a result of his false representations wound up in bank accounts controlled by DeSimone, who used it for personal expenses.

DeSimone ultimately obtained $1.2 million in cash and $4.9 million in property and forgiven debts.

He similarly profited by using the same tactics in the case of an invention known as the “Disk Shield,” a protective covering for compact disks and DVDs.

DeSimone used $180,000 of the illegally obtained money to buy a Ford GT car.

tmorgan@projo.com

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