PROVIDENCE – A Rhode Island mortgage broker admitted to using investor funds to pay for his own investment opportunities, cover personal expenses and pay others – an eight-year contract.”Ponzi scheme” who misappropriated more than $1.5 million in investor funds, prosecutors said.

Jose Giuttari pleaded guilty in federal court in Providence on Thursday, according to U.S. Attorney Zachary Cunha’s office.

Giuttari also admitted to submitting fraudulent applications for COVID-19 relief funds for his businesses, through which he received more than $160,000 in federal funds, and to failing to accurately report his income to the IRS in 2019, alleging that he earned $22,176 when he actually accumulated 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 documents, 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; inter alia.”

From 2015 to August 2023, Giuttari defrauded both borrowers and investors, lying about his prior investment experience and success, prosecutors said.

“As part of his scheme, Giuttari allegedly misrepresented to investors the amount a borrower was interested in obtaining; He misrepresented that there were documents 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 with forged signatures of borrowers,” officials said.

Giuttari acknowledged that he “lulled investors with false and fraudulent excuses and promises, and that he appeased and appeased certain previous investors and lenders by paying them with new investor money he obtained,” according to prosecutors.

At his sentencing hearing, prosecutors aim to show that the total amount of money lost due to Giuttari is between $3.5 million and $9.5 million, authorities said.

Additionally, Giuttari fraudulently obtained thousands of dollars in federal “economic injury disaster loans” after applying for financing for one of his business ventures in March 2020 and another in June 2020, filings show.

To get the money, Giuttari lied in his applications when asked if he was involved in loans 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, authorities said.

Additionally, Giuttari avoided reporting his income to the IRS for 2019, telling the agency that he earned only $22,176 when, in fact, he earned at least $541,000, according to the filings.

Giuttari is scheduled to be sentenced on January 30, 2025.

You can contact Christopher Gavin at [email protected].