Southampton Investment Advisor Convicted of Fraud and Money Laundering Charges

Jeffrey Slothower, a former registered investment adviser and founder of the New York investment advisory firm Battery Private, Inc. (Battery Private), was convicted today by a federal jury in Central Islip of all three counts of an indictment charging him with wire fraud, investment adviser fraud and money laundering in connection with a scheme to misappropriate more than $1 million from clients.  The verdict followed a three-day trial before United States District Judge Gary R. Brown. When sentenced, Slothower faces up to 30 years in prison.

Breon Peace, United States Attorney for the Eastern District of New York, and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the verdict.

“This case was about greed and betrayal of clients who trusted the defendant and thought their money was safely invested with him,” stated United States Attorney Peace.  “Slothower tricked those clients so he could steal their money and lavish himself with a new car, high-end clothing and jewelry, and a membership at an East End country club.  Protecting investors from fraudsters like the defendant has always been a priority of this Office and today’s verdict underscores our resolve to vigorously prosecute those who enrich themselves at the expense of victims.”

Mr. Peace thanked the Special Agents of the Federal Bureau of Investigation, New York Field Office, for their outstanding investigative work on the case.

As proven at trial, Slothower orchestrated a scheme to misappropriate more than $1 million from current and prospective clients.  Specifically, while operating Battery Private, Slothower solicited business from Victim-1 and Victim-2, a couple from California whose money Slothower had managed at another financial services firm where he was previously employed.  Slothower promised the victims he could beat any rate of return they were receiving and do so without market risk.  In 2017, he offered to invest Victim-1’s money into what Slothower described as bonds backed by homeowner’s association fees (the “HOA Bonds”), which would pay an eight percent return.  

Slothower sent Victim-1 wiring instructions for his investment and attached a document that made additional representations about Victim-1’s purported investment, claiming that Victim-1’s money would be held in the “capital reserves” of Battery Private.  Between January 25, 2017 and January 27, 2017, Victim-1 sent more than $500,000 to Slothower at Battery Private to be invested in the purported HOA Bonds.  Instead of investing in HOA Bonds or holding the funds in “capital reserves,” Slothower funneled the money into his personal bank accounts, and then used those funds to purchase a $125,000 Mercedes Benz SUV, and membership dues at Long Island National Golf Club, a private East End country club.  To further the fraudulent scheme, Slothower made payments to Victim-1 that were falsely represented as quarterly distributions from Victim-1’s “investment.”

Later, Slothower solicited Victim-1 to invest additional moneys, including funds controlled by Victim-1’s spouse, who was then a Battery Private client.  Enticed by the supposedly steady rate of return, Victim-2 agreed to invest in the same purported HOA Bonds, and in December 2017, Victim-2 sent more than $500,000 to Slothower at Battery Private.  However, like Victim-1, Victim-2’s money was not invested in HOA Bonds or held in “capital reserves” as represented by Slothower.  Instead, he used that money to pay tens of thousands of dollars in personal credit card debt traced to an approximately $6,500 Chanel purse, an approximately $13,000 Rolex watch, and more than $11,000 in Ralph Lauren clothing, among other things.  To further the fraudulent scheme, Slothower made payments to Victim-2 that were falsely represented as quarterly distributions from Victim-2’s investment.

In June 2018, still unaware of the fraudulent scheme, Victim-1 made an additional investment of approximately $84,000 into the purported HOA Bonds.  Slothower used Victim-1’s money to make purported quarterly payments to Victim-1 and Victim-2 that were falsely represented as their investment returns and to pay membership dues at the private golf club.

The government’s case is being handled by the Criminal Section of the Office’s Long Island Division and the Office’s Business and Securities Fraud Section. Assistant U.S. Attorneys Drew G. Rolle, Anthony Bagnuola, Adam Toporovsky and Benjamin Weintraub are in charge of the prosecution, with the assistance of Paralegal Specialists Adam Bernard and Michael Compitello.

The Defendant:

JEFFREY SLOTHOWER
Age:  46
Southampton, New York

E.D.N.Y. Docket No. 21-CR-602 (GRB)