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 of investors’ funds by using the money to repay earlier investors, support his own investment opportunities, and to cover personal expenses, according to U.S. Attorney Zachry Cunha.
Joseph Giuttari, owner and operator of Hybrid Capital Group, THE FENS CO. and Realty Funding Advisors, also admitted he filed fraudulent applications seeking pandemic economic injury disaster loans (EIDL) for two of his companies and that he failed to accurately report income of more than $540,000 on his personal 2019 IRS tax return.
He pleaded guilty to charges of wire fraud, theft of government property and filing a false tax return connected to the incidents.
According to court documents, 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.
He admitted he lulled investors with false excuses and promises and placated and appeased earlier investors and lenders by paying them back using new investor monies he obtained. According to court documents, the amount of loss is between $3.5 million and $9.5 million.
Giuttari also admitted to the court he fraudulently applied for and acquired over $160,000 in pandemic EIDL loans he was not entitled to by falsely stating on EIDL applications that his companies were not engaged in lending or investments.
Giuttari is scheduled to be sentenced on Jan. 30, 2025.