Cranston mortgage broker gets prison for Ponzi scheme, loan fraud

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A federal judge in Providence has sentenced to prison a Cranston mortgage broker who last year pleaded guilty to charges stemming from his failure to pay $140,000 in taxes, fraudulently obtaining more than $160,000 in pandemic-related loans and running a Ponzi scheme that cost investors millions of dollars in losses.

On March 27, U.S. District Court Judge Melissa R. DuBose sentenced Joseph Giuttari to 55 months of incarceration to be followed by three years of supervised release, Acting U.S. Attorney Sara Miron Bloom announced.

In addition to ordering the defendant to pay a $20,000 fine, the court ordered Giuttari to pay a total of $4,579,130.95 in restitution, unpaid taxes and penalties to various Small Business Administration loan programs, the IRS and the victims of his Ponzi scheme.

The owner and operator of Hybrid Capital Group, LLC, THE FENS CO., LLC, and Realty Funding Advisors, LLC pleaded guilty on Oct. 31, 2024, to charges of wire fraud, theft of government property and filing a false tax return.

The day after pleading guilty plea, the defendant engaged in brokerage activities in violation of his condition of release, prosecutors said. Upon discovery of his activities, the court revoked its order of release and remanded him to the custody of the U.S. Marshal pending sentencing.

According to prosecutors, Giuttari through his businesses purported to match borrowers seeking short-term loans with private lenders seeking secured investments in real estate. As part of his Ponzi scheme, Giuttari served as the clearing house for funds between the borrowers and the investors.

In executing his scheme, Giuttari directed investors and closing attorneys to send all or a portion of the loan proceeds directly to him through his multiple business entities and business bank accounts.
Instead of forwarding those funds to borrowers as represented to the investors, Giuttari used the money personally or to repay earlier investors who were seeking a return on their investments.

Additionally, Giuttari fraudulently obtained $167,800 in COVID-19 pandemic Economic Injury Disaster Loans for Hybrid Capital Group and THE FENS CO. And according to the government, the defendant avoided paying $140,102 in federal income taxes by falsely stating on his 2019 individual return that his total income was $22,176, when in fact it was at least $541,000.

Assistant U.S. Attorney Sandra R. Hebert prosecuted the case.