- Associated Press - Wednesday, March 16, 2011

PROVIDENCE, R.I. (AP) - A former Rhode Island art dealer was convicted Wednesday of defrauding a wide variety of investors _ from a wealthy Japanese sword collector to a school janitor _ in an elaborate multimillion-dollar con.

After 17 hours of deliberation, a jury convicted Rocco DeSimone of seven counts of mail fraud and one count of money laundering, according to the U.S. attorney’s office in Rhode Island. He was acquitted of two counts of mail fraud.

Mr. DeSimone is a serial con man who for years has duped people into parting with their money through one elaborate, fraudulent scheme after another,” said Peter Neronha, U.S. attorney for Rhode Island. “Apparently, he believed that he could repeatedly engage in such criminal conduct and avoid the consequences. Today’s verdict proves him wrong.”

The trial focused on an invention called the Drink Stik, a device that connects beverage containers to respirators and gas masks worn by soldiers in contaminated areas.

Prosecutors argued that DeSimone, 57, lied about access to deep-pocketed investors and promised the inventor he would sell the Drink Stik in exchange for a one-third stake in its patent. They say DeSimone then convinced investors to buy shares in his Drink Stik stake by falsely claiming that major international corporations, including Fidelity Investments and Raytheon Corp., had offered to buy it for millions of dollars.

Prosecutors told the jury he employed similar tactics to fraudulently solicit investments in two other inventions, including one in which he had no ownership stake at all.

Defense attorney countered that DeSimone’s accountant, who had a financial interest in the inventions, handled his business dealings. They also questioned the reliability of many of the witnesses against DeSimone, who they said had money to gain from seeing DeSimone convicted. Several of them have filed a separate lawsuit against him.

“It’s disappointing,” Thomas Connors, an attorney for DeSimone, told The Associated Press. “My client is upset, and his wife is devastated.”

Connors said DeSimone might appeal the verdict, but it’s too early to say for certain.

DeSimone faces a maximum of 20 years in prison on each count of mail fraud and 10 years in prison for money laundering. Judge William Smith set sentencing for July 14 in U.S. District Court in Providence.

The U.S. attorney’s office says it will try to force DeSimone to forfeit assets he gained through the scheme or bought with fraudulently obtained money. Those assets include an antique arrow quiver, a 2006 Ford GT sports car, several centuries-old Japanese swords, a 1915 painting by French Impressionist Pierre-Auguste Renoir and what prosecutors have described as a “Japanese scroll painting of an eagle sitting on a branch.”

In addition to $4.9 million in property, forgiven debt and other assets, prosecutors say DeSimone made $1.2 million off the scheme.

DeSimone was convicted in a separate tax fraud case in 2005. While serving his sentence for that conviction, he briefly escaped from a minimum-security prison in New Jersey in 2008, after he learned that FBI agents had raided his house in connection with the Drink Stik investigation. He is close to finishing his prison term on the tax fraud conviction.