PROVIDENCE – A Rhode Island mortgage broker who fleeced investors and the US government out of approximately $4.5 million, using the cash for personal purchases and to repay other investors as he ran a Ponzi scheme, was sentenced Thursday to more than four years in federal prison.
A US District Court judge in Providence ordered Joseph Giuttari to serve 55 months in prison followed by three years of supervised release, according to a spokesperson for the Rhode Island US Attorney’s office.
Giuttari, convicted for wire fraud, theft of government property, and filing a false tax return, must also pay a $20,000 fine and restitution totaling $4,579,131.
In a sentencing memorandum filed Wednesday, prosecutors said Giuttari carried out the scheme from about May 2015 until November 2024.
Even as he pleaded guilty to the charges in October, he violated the conditions of his release the following day as he pitched a new investment and brokered two new loans for a borrower, prosecutors wrote.
Typically, Giuttari promised investors he could deliver on secured investments in real estate, with a rate of return of 12 to 14 percent, according to prosecutors. He took out advertisements in newspapers such as the Wall Street Journal and often worked with relatives and investors who were referred to him.
“Most investors interviewed by law enforcement reported a similar pattern – Giuttari wooed them with early successes and smooth talk only to later learn that they had been taken for a ride,” prosecutors wrote.
When he gained their trust, Giuttari asked investors for larger and larger investments; that their money would be used under the terms they agreed to; and that their cash was secured by properly recorded mortgages.
He operated under several business entities, including Hybrid Capital Group, LLC; THE FENS CO. LLC; and Realty Funding Advisors, LLC; among others.
“As the scheme grew, Giuttari missed more and more loan repayments, and the loans that he had brokered became overdue,” prosecutors wrote. “He offered the investors false excuses and reasons for delay, always promising a pay out in the future. When the investors became desperate, Giuttari would appease them with a small payment, often in cash.”
Meanwhile, Giuttari was spending his investors’ money on himself, the filing states.
“He spent their monies on his personal residence, to pay his credit card and other personal bills, for overseas investments that he was interested in pursuing, and to repay earlier investors, among other illicit uses,” prosecutors wrote. “Giuttari also wrote large checks to himself and conducted numerous cash withdrawals with investors’ funds.
“In the end … Giuttari stole over $4.2 million form individual investors.”
In addition, Giuttari also fraudulently obtained “Economic Injury Disaster Loans” from the Small Business Administrations, securing $160,000 of the funds intended to help businesses during the COVID-19 lockdowns.
Prosecutors also said Giuttari did not pay his taxes during the scheme, having filed false returns for tax years 2018 and 2019, when he told the IRS he made a mere $22,176 – not the $541,000 or more he actually pocketed. He has not filed another return since then, they said.
Christopher Gavin can be reached at christopher.gavin@globe.com.
