Mortgage Broker Admits to Running a Ponzi Scheme, Fraudulently Acquiring CARES Act Loans, Filing a False Tax Return

Summary

A press release of the U.S. Attorney's Office for the District of Rhode Island dated Thursday, October 31, 2024, announcing that Joseph Giuttari, a Rhode Island mortgage broker and owner of Hybrid Capital Group, LLC, THE FENS CO., LLC and Realty Funding Advisors, LLC, pleaded guilty to wire fraud, theft of government property and filing a false tax return. It states that he admitted misappropriating more than $1.5 million of investors' funds by using the money to repay earlier investors, support his own international investments and cover personal expenses. According to the release, he also admitted filing fraudulent applications for COVID-19 pandemic Economic Injury Disaster Loans for two of his companies and failing to report total income of more than $540,000 on his 2019 tax return. It was announced by United States Attorney Zachry A. Cunha.

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Press Release

Mortgage Broker Admits to Running a Ponzi Scheme, Fraudulently Acquiring CARES Act Loans, Filing a False Tax Return

Thursday, October 31, 2024

For Immediate Release

District of Rhode Island

PROVIDENCE, RI – United States Attorney Zachry A. Cunha announced today that a Rhode Island mortgage broker who purported to match borrowers seeking short-term loans with private lenders seeking high rates of return admitted to a federal judge that he misappropriated more than $1.5 million dollars of investors’ funds by using the money to repay earlier investors, support his own international investment opportunities, and to cover personal expenses.

Additionally, Joseph Giuttari, owner and operator of Hybrid Capital Group, LLC; THE FENS CO., LLC; and Realty Funding Advisors, LLC, among others, admitted that he filed fraudulent applications seeking COVID-19 pandemic Economic Injury Disaster Loans (EIDL) for two of his companies, and that he failed to accurately report on his personal 2019 IRS tax return a total income of more than $540,000.

Giuttari pleaded guilty today to charges of wire fraud, theft of government property, and filing a false tax return.

Charging documents reflect that Giuttari falsely misrepresented his investment experience and success in an effort to persuade investors. 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.

Giuttari admitted that 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. Court documents reflect that at sentencing the government will show that the amount of loss attributable to the defendant is between $3,500,000 and $9,500,000.

Additionally, Giuttari admitted to the court that he fraudulently applied for and acquired over $160,000 in pandemic EIDL loans for Hybrid Capital Group and THE FENS CO that he was not entitled to receive. He did so by falsely stating on EIDL applications that his companies were not engaged in lending or investments.

Giuttari further admitted that he falsely stated on his 2019 U.S. Individual Income Tax Return that his total income was $22,176, when in fact it was at least $541,000.

Giuttari is scheduled to be sentenced on January 30, 2025. The defendant’s sentence will be determined by a federal district judge after consideration of the U.S. Sentencing Guidelines and other statutory factors.

The case is being prosecuted by Assistant United States Attorney Sandra R. Hebert.

The matter was investigated by the FBI and Internal Revenue Service Criminal Investigation.

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Contact

Jim Martin

(401) 709-5357

Updated October 31, 2024

Topics

Coronavirus

Financial Fraud

Component

USAO - Rhode Island

Press Release Number: 24-125

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