What a drag! Mary-Kate Olsen was spotted puffing on a cigarette and talking on her cell phone while walking in New York's West Village last week with boyfriend Olivier Sarkozy and his daughter.

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Mary-Kate Olsen, left, with Olivier Sarkozy and his daughter in New York on June 14.

Us Weekly recently reported that Olsen, 26, and Sarkozy, 42, the half-brother of former French President Nicolas Sarkozy, were dating and the 16-year age difference suits her just fine.

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

The billionaire ex-child star is now a successful fashion designer along with her sister, Ashley. Sarkozy is managing director of the Carlyle Group's Global Financial Services Group.