PROVIDENCE -- Former nursing home operator Antonio L. Giordano, who next month begins serving 2 1/2 years in federal prison after admitting he diverted more than $780,000 in federal money to a company run by his daughter, pleaded not guilty yesterday to related state charges.

His longtime chief financial officer, John J. Montecalvo, who is also heading to federal prison, also pleaded not guilty.

Both men each face 45 state counts of money laundering, Medicaid fraud and embezzlement related to alleged crimes committed during the operation of the Hillside Health Center in Providence. Montecalvo is additionally named in 10 counts of patient neglect.

Their arraignments in state Superior Court came just five days after U.S. District Judge Mary M. Lisi sentenced the two men in federal court, where they had entered into a plea agreement. Saying that greed was a motivator, Lisi sentenced Giordano to six months more than the prosecution recommended. Montecalvo received two years on the same charges.

While the state and federal charges both deal with misappropriation of money, they are distinctly separate.

The federal charge targeted Giordano's and Montecalvo's conduct in respect to My Place, the employee-relations company owned by Giordano's daughter, Mary Gentilli. The state charges target primarily the men's alleged criminal conduct regarding a mortgage company that Giordano owned a 50 percent interest in.

The bulk of the state charges -- 34 counts -- allege that the two men directed federal money to that mortgage company and then loaned the money back to the Hillside nursing home at twice the interest rate the federal government was charging.

The indictment also contends that the men in January 2002 took a $400,000 Medicaid check and rather than deposit it into the nursing home's operating account as they were supposed to, deposited it for personal use into an account of the mortgage company.

The indictment also alleges that Montecalvo "intentionally failed to provide treatment and care" to 10 patients at Hillside between September 2003 and March 2004.

All of the state counts are felonies. The embezzlement and money laundering charges carry penalties of up to 20 years in prison and fines up to $500,000; the Medicaid fraud charges carry a penalty of 10 years in prison and a $10,000 fine for each count.

Giordano, 62, of 229 Potter Rd., North Kingstown, and Montecalvo, 68, of 181 Cedar Hollow Rd., South Kingstown, are to report Oct. 13 to a yet-to-be-determined federal prison.

While they serve their federal time, their state cases will continue with their lawyers most likely entering their appearances on their behalf at the next scheduled court date, Dec. 13.

In addition to Hillside, Giordano owned the Coventry Health Center and the Mount St. Francis Health Center, in Woonsocket. Audits of the three nursing homes found several million dollars in "questionable" payments to companies associated with Giordano. All three nursing homes ended up in receivership, but Coventry and Mount St. Francis now have new owners.

tmooney@projo.com / (401) 277-7359