'Friend' of Ned is convicted of mail fraud

A Rhode Island man was convicted last week of mail fraud and money laundering after creating a fictitious friendship with Fidelity Investments chairman Edward “Ned” Johnson III as a way to bilk investors
MAR 20, 2011
A Rhode Island man was convicted last week of mail fraud and money laundering after creating a fictitious friendship with Fidelity Investments chairman Edward “Ned” Johnson III as a way to bilk investors. Rocco P. DeSimone was convicted of seven counts of mail fraud and one count of money laundering in U.S. District Court in Providence, R.I. He faces up to 20 years in federal prison for each of the counts of mail fraud and up to 10 years for the single count of money laundering. He was cleared of two additional counts of mail fraud. Sentencing for Mr. DeSimone, who is close to completing a prison term from a 2005 tax evasion conviction, will be July 14. One of the counts involved his using Mr. Johnson's name to lure investors, said Jim Martin, public information officer for the U.S. Attorney General's Office in Rhode Island. The focus of the case was an invention called Drink Stik, which allows a soldier to drink while wearing a gas mask. Prosecutors said that Mr. DeSimone promised the inventor, Robert McKittrick, that in exchange for a third of the patent, he would use his access to wealthy individuals to market the product. Prosecutors said that Mr. DeSimone then scammed investors by persuading them to buy shares in Drink Stik by claiming falsely that major corporations, including Fidelity, were interested in buying the invention for millions of dollars. One investor, Frederick Weissberg of California, paid $400,000 for shares of Drink Stik and another invention. And another investor, gave Mr. DeSimone thousands of dollars after being told that his investment would grow to $1 million. Prosecutors will attempt to force Mr. DeSimone to forfeit $4.9 million in property and $1.2 million in cash he got via the scam. “Fidelity Investments is not involved in the issue,” Jennifer Engle, a spokeswoman, wrote in an e-mail. E-mail Jessica Toonkel at [email protected].

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave