Mary-Kate Olsen & Olivier Sarkozy out to dinner with his daughter on June 14, 2012. Credit: Elder Ordonez/

Is Mary-Kate Olsen a bad influence on her boyfriend's little girl?

The billionaire fashion designer and actress, 26, was photographed smoking a cigarette and chatting on her cell phone while walking with Olivier Sarkozy, 42, and his underage daughter (with ex-wife and writer Charlotte Bernard) in New York City's West Village June 14.

Sarkozy, who is the managing director of the Carlyle Group's Global Financial Services Group and the brother of former French President Nicolas Sarkozy, wrapped his arms around both Olsen and his daughter during their mid-afternoon stroll.

Despite their 16-year age difference, Olsen -- who owns three successful fashion labels with her twin sister, Ashley -- is head over heels for Sarkozy, a source recently told Us Weekly.

"MK is constantly complaining about boys not being mature enough for her. She got the kids out of her system," the source explained. "Now being a businesswoman dominates her time, and she is rarely impressed with guys."

Tell Us: Is it appropriate for Mary-Kate Olsen to smoke in front of her boyfriend's daughter?