A federal grand jury has charged Rocco DeSimone, of Johnston, with conning an inventor and defrauding investors with fraudulent claims about marketing three inventions.  DeSimone, who is about to complete a federal prison term for tax fraud, escaped from a minimum security facility in New Jersey in March 2008 after he learned that federal agents had executed a search warrant at his Johnston home.  He surrendered in Rhode Island three days later.

United States Attorney Robert Clark Corrente, Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation, and Susan Dukes, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, jointly announced a ten-count indictment charging DeSimone with mail fraud and money laundering.  The indictment was returned on March 11 in U.S. District Court, Providence.
Disk Shield, Drink Stik, Song Tube.

According to the indictment, DeSimone’s scheme involved the marketing of three inventions developed by two inventors.  One inventor developed the “Disk Shield” in 2006 as a protective shield for compact discs and DVDs.  In 2005, another inventor, who is also a physician, patented the “Drink Stik,” designed to allow individuals wearing protective gear to drink fluids without first having to remove the protective gear.  In 2006, the physician-inventor developed the “Song Tube,” designed as an improved version of a gastrointestinal medical tube.

According to the indictment, DeSimone falsely represented to the Drink Stik inventor that he personally knew the Chief Executive Officer of Fidelity Investments and claimed that the CEO had agreed to purchase the Drink Stik for millions of dollars.  In fact, according to the indictment, DeSimone had never met or even spoken with the Fidelity CEO.  DeSimone allegedly used this and other ruses to con the inventor into giving him part ownership of the company marketing the Drink Stik. 

According to the indictment, DeSimone falsely represented to potential investors that Fidelity, Raytheon and/or Tyco International had offered to purchase the rights to the Drink Stik for millions of dollars.  DeSimone subsequently provided false explanations to investors concerning purported delays in receiving funds from Fidelity, Raytheon and Tyco, claiming, for instance, that the deals were delayed in company bureaucracy.

DeSimone allegedly obtained from investors in the Drink Stik about $1.2 million in funds and $4.9 million in other property and forgiven debts.  Among the property he allegedly obtained were expensive pieces of art and valuable Japanese artifacts.

According to the indictment, DeSimone convinced the physician-inventor that he could successfully market the Song Tube gastrointestinal device in exchange for an ownership interest in the Song Tube.  The inventor subsequently assigned the Song Tube patent to a company in which DeSimone had a 34 percent ownership.

The indictment alleges that DeSimone solicited investments in the Disk Shield by falsely representing that he owned the right to market it.  According to the indictment, DeSimone had no ownership interest in the Disk Shield and no authority to solicit investments.  DeSimone allegedly represented that Nintendo, Inc. and SONY Records, Inc. had offered millions of dollars for the Disk Shield, when neither company had made such an offer, according to the indictment.

According to the indictment, DeSimone made several false representations about the Drink Stik and Song Tube marketing campaigns to a California investor, who subsequently wired about $500,000 to a bank account held in the name of Rocco DeSimone’s wife.

The indictment charges DeSimone with nine counts of mail fraud.  It also charges him with money laundering for allegedly using about $180,000 of the money sent by the California investor to buy a Fort GT automobile.

An indictment is merely an allegation and a defendant is presumed innocent unless and until proven guilty.  In the event of a conviction, the maximum penalty for mail fraud is 20 years in prison and a $250,000 fine.  The maximum penalty for money laundering is ten years in prison and a fine of $250,000 or twice the amount of gain or loss.

The indictment also seeks the forfeiture of money and other assets that DeSimone allegedly derived from the scheme.  Among the assets:  motor vehicles, nine Japanese swords, and a 1915 painting by Pierre-August Renoir entitled “Paysage a’ Cagnes.”

DeSimone, 55, who is scheduled to be released from prison on March 21, is to be brought into U.S. District Court, Providence on Friday, March 20, to be arraigned on the indictment.

The Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation, conducted the investigation.  Assistant U.S. Attorneys Lee H. Vilker and John P. McAdams are prosecuting the case.