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What you need to know for 01/19/2018

Prosecutors oppose new delay in McGinn, Smith fraud trial in Albany

Prosecutors oppose new delay in McGinn, Smith fraud trial in Albany

Federal prosecutors are urging a U.S. District Court judge to carry on with the trial of embattled b

Federal prosecutors are urging a U.S. District Court judge to carry on with the trial of embattled brokers Timothy McGinn and David Smith, claiming their defense attorneys have ample time to wend through more than 5,000 pages of witness material.

In a letter addressed to the court Monday, Assistant U.S. Attorney Elizabeth Coombe said the partners’ defense attorneys have nearly three weeks to review the materials before the first witness is called in the case. She disputed their assertion that prosecutors abruptly dumped large volumes of witness materials on them with little time remaining before the trial now scheduled for Nov. 19.

“The materials — slightly more than the 5,000 pages contained in a single copy box — were well organized in electronic format with a folder for each category of document and individual subfolders by witness name,” she wrote in the letter. “The pejorative term ‘document dump,’ which implies a disorganized jumble of materials, is plainly inapplicable.”

Attorneys William Dreyer and E. Stewart Jones have called for another delay in the trial since the longtime partners of the Albany-based McGinn, Smith and Co. were arraigned on two additional counts of mail fraud in the case. The federal indictment accuses McGinn and Smith of employing a Ponzi scheme to defraud clients of more than $9 million that was used to finance their own lavish lifestyles.

The federal criminal case came after the Security and Exchange Commission brought a case against the partners for allegedly raising more than $136 million from more than 900 investors by conducting more than 20 fraudulent debt offerings between 2005 and 2009. The civil court proceeding was stayed after the federal indictment was filed earlier this year.

The partners both vehemently deny the charges against them in the 32-count indictment. They claim investor losses were a factor of the sudden downturn of the economy.

McGinn, 64, of Clifton Park, is now living in Florida, where he maintains a second home and a job. Smith, 67, continues to reside in Saratoga Springs.

The jury trial in the case has already been postponed repeatedly. The jury draw for the case was scheduled for next week before U.S. District Court Judge David Hurd ordered this date pushed back late last month.

In a letter to the court Friday, the two defense attorneys claimed the prosecution had dumped 5,957 pages of “highly relevant witness materials, including the grand jury transcripts of 41 witnesses.” They claimed reviewing the large volume of material with less than three weeks remaining before the trial could jeopardize the partners’ right to a fair trial.

“The government’s withholding of this amount of material until two and a half weeks before trial is incredulous and absolutely unfairly prejudices our clients,” the missive states.

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