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Accused RI fraudster taken into custody after feds allege he violated terms of release

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PROVIDENCE, R.I. (WPRI) — The Cranston man who admitted to defrauding several people out of millions of dollars was put in jail Thursday after prosecutors said he violated conditions of his pre-sentencing release.

Joseph Giuttari, 62, was handcuffed and led away by U.S. marshals at federal court in Providence where U.S. Magistrate Judge Patricia Sullivan ordered him temporarily detained pending a full hearing next week.

The detention order comes after federal prosecutors accused the Cranston man of illegally brokering real-estate deals in violation of an earlier court order that laid out the terms of his release.

"I may be a cynical person, but I sort of saw this coming," Assistant U.S. Attorney Sandra Hebert said in court.

Giuttari pleaded guilty on Oct. 31 to defrauding people in an investment scheme, stealing government property and lying on a tax return. He had previously been released on bail under several conditions, including not brokering any new deals with investors.

Prosecutors alleged he violated that condition the day after pleading guilty when he coordinated two new loans with an investor, earning a broker's fee of nearly $15,000.

"When this borrower reached out to law enforcement, my worst fears were realized," Hebert said.

After the two sides met the judge's chambers for nearly an hour, Sullivan in open court called the allegations "very troubling," and ultimately decided Giuttari should be held behind bars until at least a full hearing can be held Tuesday.

The hearing could include witness testimony and other evidence, Sullivan will then decide whether Giuttari could be released again with new conditions, or held until at least his sentencing, which is scheduled for Jan. 30.

"I'm just very uncomfortable that this might just be the tip of the iceberg," Sullivan said.

Giuttari's attorney, John MacDonald, unsuccessfully argued his client shouldn't be detained. He acknowledged that while there may have been a technical violation of the bail conditions, MacDonald highlighted there were no new fraud allegations and Giuttari could comply with conditions until his sentencing.

"The greater public can be protected and he can work toward his sentencing hearing while he's not detained," MacDonald said.

Hebert disagreed, noting that the burden of proving whether Giuttari is an economic threat to the public has shifted from the government to the defendant, as Giuttari's guilty plea technically means the case has been adjudicated -- even before sentencing.

"I have serious concerns," she said. "I have a responsibility to the public to make sure he doesn't continue with what he's done for years."

Target 12 first revealed Giuttari’s investment scheme publicly in October. Two days after the report came out, Rhode Island U.S. Attorney Zachary Cunha’s office filed the criminal charges and Giuttari signed a plea agreement.

Federal officials accused Giuttari of initially lulling investors into lending or borrowing money with him for short-term real estate deals. The scheme began in 2015 and continued through last year, according to court documents.

Federal investigators said there were more than 10 victims with a combined loss of between $3.5 million and $9.5 million. They said Giuttari would use the funds for personal gain or to pay back other investors.

As part of Thursday's hearing, Giuttari provided a list of all of the people he said currently have loans with him, as was required as part of his plea agreement.

Hebert said the government will begin reaching out to all of those people to notify them about the legal proceedings, and MacDonald said he would get an additional list showing all of Giuttari's clients for whom he services their loans.

The next hearing is scheduled for 2 p.m. Tuesday.

Eli Sherman (esherman@wpri.com) is a Target 12 investigative reporter for 12 News. Connect with him on Twitter and on Facebook.

Alexandra Leslie (aleslie@wpri.com) is a Target 12 investigative reporter covering Providence and more for 12 News. Connect with her on Twitter and on Facebook.

Tim White contributed to this report


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