UTICA, N.Y. - Two Albany investment brokers convicted in a Ponzi-like scheme as they swindled money from hundreds of unsuspecting victims were sentenced to prison terms in federal court Wednesday.
Timothy McGinn of Clifton Park and David Smith of Saratoga Springs were convicted in February of conspiracy to commit mail and wire fraud, securities fraud, and filing false tax returns after they diverted millions of dollars of client money to pay personal expenses between November 2008 and April 2009, when the firm shut down. In some cases, investors' entire life savings were wiped out.
McGinn was sentenced to 15 years in prison with almost $6 million in restitution in federal court in Utica on Wednesday morning. Smith received a sentence of 10 years in prison plus restitution.
Prosecutors have called it a Ponzi-like scheme involving over 800 victims and $30 million. McGinn is guilty of swindling millions of dollars from investors using it for his personal use. But, the defense stood by their argument in court, saying McGinn had the wrong business model investing money into businesses that were failing during the recession.
"The judge refused to allow the jury to consider, and us to argue, the financial collapse of all the markets that were relevant to that business. Had the jury heard what the judge heard today I think we would had a different result," McGinn's defense attorney said.
McGinn's defense attorney calls it a "harsh sentence" and does not believe the case was decided fairly by a jury. He says he will challenge the judge's ruling.
Arthur Deluca invested his life savings, over $200,000, with McGinn and Smith after he retired, which turned out to be a huge loss for him and his wife. "It's embarrassing," Deluca said. "My wife and I had some extra month and that was the time to invest."McGinn's defense attorney does not believe the case was decided fairly by a jury and he says he will challenge the judge's ruling in which he calls a harsh sentencing.
The U.S. attorney asked they be sentenced to life in prison and fined up to $30 million.
"I hope the judge throws the book at them," Deluca said - but what he really wants is his money back.
McGinn and Smith's attorneys are asking for single-digit sentences, calling the U.S. Attorney's request "preposterous."
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