ALBANY, N.Y. - The former firm's co-owners have already received jail sentences for their involvement in a $125 million Ponzi-like scheme, and now ten brokers of McGinn and Smith are facing charges filed this week by the U.S. Securities and Exchange Commission.
According to the SEC, the ten brokers allegedly recommended the unregistered investment products involved in the scheme and made material misrepresentations and omissions to their customers.
The SEC says the brokers ignored red flags and neglected to do their due diligence.
Six out of the ten brokers charged live in the Capital Region. Those facing charges in our area include Andrew Guzzetti of Saratoga, Donald Anthony of Loudonville, Frank Chiappone of Clifton Park, Richard Feldmann of Delmar, William Gamello of Rexford, and Thomas Livingston of Slingerlands.
NEWS10 ABC learned that Andrew Guzzetti is now a managing director and Frank Chiappone is now a senior vice president at DLG Wealth Management in Clifton Park. They had no comment for NEWS10 on the charges.
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.