01/27/2012 1:46PM

McGinn, former NYRA vice chairman, charged with fraud


Timothy McGinn, a former vice chairman and board member of the New York Racing Association, was charged with fraud on Thursday in an indictment released by prosecutors for the U.S. Attorney’s office in Albany, New York, where McGinn ran a brokerage firm with partner David L. Smith.

Both McGinn and Smith were charged with 30 counts of fraud in the indictment, which alleged that the two partners misled unsophisticated investors about the risks and returns of securities. The indictment says that the two “misappropriated” at least $8 million in investors’ funds.

McGinn, a horse owner and breeder, was the vice chairman of NYRA’s board of directors from 1998 through 2008. He was a board member until 2008, when the Securities and Exchange Commission began investigating allegations that his brokerage firm had defrauded investors.

The indictment states that McGinn used a portion of the money that was misappropriated to pay $40,000 worth of expenses of his racing stable.

A message left at the office of McGinn’s brokerage firm in Albany was not immediately returned.

Under the indictment, McGinn and Smith could face as much as 30 years in prison if convicted on all counts. Penalties in cases involving securities fraud are typically reduced well below the maximum sentence.