'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. 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].