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McGinn and Smith face additional charges

Thursday, October 11, 2012
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— Two Albany-based brokers have been indicted on new charges alleging they stole more than the $8 million they are already accused of taking from clients.

Timothy McGinn and David Smith are facing a criminal trial and a civil trial regarding the many private trusts they were supposed to manage.

Now they also face new accusations that they faked documents to try to hide their activities from investigators at the Financial Industry Regulatory Authority, Inc.

In a Grand Jury indictment opened today, they were accused of creating false accounting entries and false loan documents, submitting those false items to investigators, and stealing nearly $1 million.

They did not keep the $1 million. The Grand Jury indictment says they improperly took $473,000 of investors’ money from an escrow account and used it to pay preferred clients who had unrelated investments. They made those payments between May 15, 2008 and July 8, 2009, according to the indictment.

They are also accused of paying their employees with $525,000 taken from investment bank accounts, between Nov. 14, 2008 and April 15, 2009.

The indictment says they hid that expenditure by passing the money through a corporation and then back to their brokerage. When investigators asked about that expenditure, the indictment says McGinn and Smith directed staff to create fake accounting entries, and submitted them to the investigators.

 
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