The founders of an investment firm accused of swindling their clients out of millions of dollars were arraigned in federal court. Timothy McGinn and David Smith have been charged with fraud and filing false income tax returns. Erin Connolly has more.
ALBANY, N.Y. -- The founders of an Albany-based investment firm accused of swindling their clients out of million of dollars pleaded not guilty during their arraignment on Friday.
Timothy McGinn, 63, and David Smith, 66, were indicted Thursday on charges of mail and wire fraud, securities fraud, and filing false income tax returns.
Prosecutors said McGinn and Smith took $8 million of funds they were supposed to be investing and covered it up in their bookkeeping.
The most serious charges against them carry a 30-year prison sentence and a million dollar fine.
Both men were released on $100,000 bail, but are prohibited from opening new lines of credit before their trial. They were also required to surrender their passports and are being forced to adhere to strict travel restrictions.