Joseph Giuttari also lied to get thousands in COVID relief loans, and told the IRS he made only a fraction of his mid six-figure income income in 2019
PROVIDENCE — A Rhode Island mortgage broker has admitted to using investor funds to pay for his own investment opportunities, cover personal expenses, and repay others — an eight-year “Ponzi scheme” that misappropriated more than $1.5 million in investor funds, prosecutors said.
Joseph Giuttari pleaded guilty in federal court in Providence on Thursday, according to US Attorney Zachary Cunha’s office.
Giuttari also admitted to filing fraudulent applications for COVID-19 pandemic relief funds for his businesses — through which he received more than $160,000 in the federal funds — and to failing to accurately report his income to the IRS in 2019, claiming he made $22,176 when he actually banked more than $541,000, officials said.
Giuttari was charged with wire fraud, theft of government property, and filing a false tax return.
According to court filings, Giuttari, identified only as a Rhode Island resident, owned and operated “several business entities that he used as part of his fraudulent brokerage activities: Hybrid Capital Group, LLC; THE FENS CO. LLC; and Realty Funding Advisors, LLC; among others.”
From 2015 through August 2023, Giuttari defrauded both borrowers and investors, lying about his previous investment experience and success, prosecutors said.
“As part of his scheme, Giuttari allegedly misrepresented to investors the amount a borrower was interested in obtaining; misrepresented that documents were in place to secure the investment funds; inflated how much borrowers owed; used borrowers’ names without their authorization to obtain funds from investors; and created fraudulent promissory notes and real estate documents bearing forged signatures of borrowers,” officials said.
Giuttari acknowledged he “lulled investors with false and fraudulent excuses and promises, and that he placated and appeased certain earlier investors and lenders by paying them back using new investor monies he obtained,” according to prosecutors.
At his sentencing hearing, prosecutors intend to show the overall amount of money lost because of Giuttari is between $3.5 million and $9.5 million, officials said.
Additionally, Giuttari fraudulently roped in thousands of dollars in federal “Economic Injury Disaster Loans” after he applied for funding for one of his business ventures in March 2020 and another in June 2020, filings show.
To get the cash, Giuttari lied on his applications when asked if he was involved in lending and investments and if he was “engaged in real estate development or investments,” according to the complaint filed in court. He ultimately received a total of $160,000 in loans, officials said.
Furthermore, Giuttari skirted on reporting his income to the IRS for 2019, telling the agency he made only $22,176 when, in fact, he pulled in at least $541,000, filings state.
Giuttari is scheduled to be sentenced on Jan. 30, 2025.
Christopher Gavin can be reached at christopher.gavin@globe.com.