The bosses of an upstate New York investment firm used investors' cash to finance their own lavish lifestyles and to underwrite business ventures like a swingers' cruise line, according to an SEC lawsuit. The assets of McGinn, Smith & Co. have been frozen by court order while SEC investigators probe what they believe is a Ponzi scheme, the Albany Times-Union reports.
Investors were bilked out of a total of $136 million by the firm, the SEC alleges. The complaint states that investors were told some funds were invested in a cruise charter firm, but that the company failed to mention that the cruises were "sexually oriented, that strippers and go-go dancers would be procured to entertain passengers," and that company founder Timothy McGinn was romantically involved with the manager of the money-losing venture.
(Read more Timothy McGinn stories.)