A former registered investment advisor from New York has been convicted on three counts of fraud and money laundering related to embezzling more than $1 million from his clients.
Jeffrey Slothower, hailing from Southampton, could face up to 30 years in prison, as stated by the Justice Department.
Prosecutors detailed a scheme where Slothower persuaded a client and her spouse to invest in what he described as bonds backed by homeowner’s association fees, promising them an 8% return with no market volatility risk.
Throughout 2017, the victims each entrusted Slothower with over $500,000 to be invested in these purported HOA bonds. Instead of investing the funds, prosecutors revealed that Slothower diverted the money into his personal accounts. He used these funds to purchase a Mercedes SUV, secure a membership at an East End country club, and pay off credit card debt from luxury purchases, including a Rolex watch and a Chanel purse.
“This case was about greed and betrayal of clients who trusted the defendant and thought their money was safely invested with him,” stated Breon Peace, U.S. Attorney for the Eastern District of New York. “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.”
Slothower and his lawyer have not yet responded to requests for comment.
Slothower, 46, entered the industry in 2001, registering with Speer, Leeds & Kellogg, which had been acquired by Goldman Sachs the year before, according to BrokerCheck. He had tenures with several other firms, including Northwestern Mutual and Merrill Lynch. In 2016, he launched his own practice, Battery Private.
Battery Private was registered with the Securities and Exchange Commission as an investment advisor until November 2017. However, Slothower’s own registrations as an advisor with the commission and as a broker with industry self-regulator FINRA both ended in 2016.
In August 2021, the SEC brought civil charges against Slothower and Battery Private similar to those in the criminal case, additionally accusing the firm of overstating its assets under management in regulatory filings.
Battery Private describes itself on its website as a “principal investor in various opportunistic asset classes including private companies, startups, art, collectibles, film, and real estate.”
According to the SEC’s complaint, which is still pending, Slothower was the sole employee of Battery Private.
The criminal proceedings formally began in 2021 with an indictment on charges of wire fraud, investment advisor fraud, and money laundering. After a three-day trial, a jury found Slothower guilty on all three counts. Court records do not yet indicate a scheduled sentencing date.
