'Arrogant' McGinn gets 15-year sentence

It wasn't the life term prosecutors sought, but 65-year-old security industry investor Timothy McGinn today was sentenced to be in federal prison until he's 80. McGinn had asked for a more lenient sentence after being convicted earlier this year of fraud, conspiracy and tax evasion in a Ponzi-like scheme that caused investors to lose millions. A judge spurned that request, calling McGinn  “arrogant,” news reports say.

David L. Smith, 68, McGinn's former partner in the Albany, N.Y.-based brokerage firm of McGinn, Smith & Co., which conducted dealings in the alarm industry, received a sentence of 10 years. Smith was convicted of the same charges on Feb. 6, but of fewer counts than McGinn. The judge criticized Smith for "going along" with McGinn with no regard for the law, according to an Albany Times Union story on the sentencing.

Here's more from the Times Union on what happened in court today:

"I came up with one word that describes your downfall -- and that word is arrogant," U.S. District Court Judge David Hurd told McGinn.

"You ran your business and you didn't really care about the rules as long as you made money for you and your favorite clients," the judge continued.

… The crimes for which [McGinn and Smith] were convicted carry sentences of up to 20 years in prison. However, the Justice Department said federal sentencing guidelines call for life sentences because of aggravating factors that include the high amount of losses, number of victims and the sophisticated nature of the scheme.

Prosecutors said McGinn and Smith not only defrauded investors but diverted approximately $4.1 million from investment trusts for their own benefit. They said the two created false loan documents, misled investors and lied to federal regulators.

Assistant U.S. Attorney Elizabeth Coombe reject McGinn and Smith's assertions that the collapse of their business was caused by a downturn in the economy not criminal conduct.

… The former brokers' attorneys asked Hurd to sentence their clients to no more than "single-digit" prison sentences for their crimes, according to court documents unsealed last week at the request by the Times Union.

… [McGinn and Smith were indicted by a grand jury in early 2012.] ... [This February] McGinn was convicted on 27 of the 29 counts he faced; Smith on 15 of 28 counts. Both were convicted of conspiracy to commit mail and wire fraud, mail fraud, wire fraud and failure to file a tax return.