Guiseppe was a waiter at the Blitz Hotel in London. He was hired by the Red Hand to steal Count Stylptitch's memoirs from Anthony Cade (who was posing as Jimmy McGrath), but during the theft he was caught by Anthony and a struggled broke out. Guiseppe escaped, but not with the memoirs. He had mistakenly stolen some letters, that Anthony was tasted to return to the writer. The letters appeared as love letters from a unhappy wife named Virginia Revel to her lover Captain O'Neil. Guiseppe could not have guessed that the letters were really coded messages from Queen Varaga to the criminal King Victor, so he decided to use the letters to blackmail the writer.
He contacted a widow with the name Virginia Revel and demanded a thousand pounds for the letters. Virginia, who did not write those letters, decided to go along with the blackmail for fun. She paid him 40 pounds and asked him to return the day after to receive her answer.
But the Red Hand or King Victor caught up to Guiseppe and killed him, suspecting that he had betrayed them. Hence it's safe to assume that King Victor, who had worked with the Red Hand, stole the letters from him and staged his body in Mrs. Revel's home with a gun engraved 'Virginia' to frame her for the murder and prevent her to come to the Chimneys and risk exposing Varaga who was staying in the house under an alias.
When Virginia came home and found the body, she asked Anthony Cade for help, and together they disposed of the body, which was later found by the police.
Trivia
The Red Hand and King Victor likely worked together. It was most likely that it was the Red Hand that killed Guiseppe, since King Victor is known to have never taken a life, but Battle pointed out that the staging of the body, intending to frame Virginia, suggest that King Victor was behind.
It likely the the Red Hand first killed Guiseppe and the King Victor on his own staged the body in Virginia's home to prevent the risk of her exposing Varaga. The Red Hand wouldn't have a hand in the staging, if they had known that Varaga, who had been hiding from them, was alive and in the house. Unless they knew that King Victor had an accomplise in the house, but didn't knew who it was.