Timothy McGinn, a former board member and vice chairman of the New York Racing Association, pleaded not guilty Jan. 27 in U.S. District Court to charges that he and partner David L. Smith bilked investors of at least $8 million.

Smith also pleaded not guilty at the arraignment, according to the Albany Business Review. The Albany, NY investment brokers were released on the their own recognizance after signing $100,000 bonds. There was no date set for further action.

McGinn, 63, and Smith, 66, were indicted by a grand jury Jan. 26 on 30 counts related to securities fraud, mail fraud, conspiracy and falsifying tax returns.

"These are the victims -- the accused," attorney E. Stewart Jones Jr. told the Business Review as he, McGinn, and Smith entered a car parked outside the court after proceedings ended.

Prosecutors accuse McGinn and Smith, partners in McGinn Smith & Co., of misusing money from investor trust funds for their own benefit. The firm closed in December 2009.

Richard Hartunian, the top federal prosecutor based in Albany, told the Business Review that the number of victims is “in the hundreds” and includes a church, a retired soldier, and a college student.

The indictment alleges that McGinn and Smith misappropriated the money for personal loans, to fund personal investments, and to pay income taxes and alimony.

A horse owner and breeder, McGinn was the vice chairman of NYRA’s board of directors from 1998 through 2008. The indictment alleged that McGinn used a portion of the money to pay $40,000 worth of expenses of his racing stable.

Prosecutors said the men could each face sentences of up to 30 years if convicted on all counts.