Long Island Advisor Gets 6 Years for Client Fraud
A Long Island-based investment advisor will spend six years in prison after being convicted of defrauding clients out of more than $1 million.
According to U.S. Attorney Joseph Nocella, Jeffrey Slothower used his position as a financial advisor “to steal over a million dollars from an unsuspecting couple,” while FBI Assistant Director James Barnacle said Slothower created “fabrications of profitable returns” to steal from clients to “fund extravagant purposes and repay his own credit card bills.”
Slothower was convicted of wire fraud, investment advisor fraud and money laundering in connection with the scheme and sentenced to 72 months in prison. Additionally, the judge ordered the advisor to pay over $1.16 million in restitution and forfeiture.
FINRA and SEC records indicate the Southampton, N.Y.-based Slothower registered in 2002 at Goldman Sachs, with subsequent stints at Northwestern and Merrill Lynch.
At the time of the events in question, Slothower was running Battery Private, a New York advisory firm that terminated its SEC registration in 2017. (Slothower was suspended by FINRA in 2017 and faced SEC charges in 2021 related to the events detailed at his trial.)
While operating Battery Private, Slothower solicited a couple from California, whom Slothower had previously advised when working at another firm, according to the DOJ. (The victims and the previous firm are not named.) Slothower promised he could beat their current returns without market risk. In 2017, he offered to invest one victim’s money in what he claimed were bonds backed by homeowner’s association fees, promising an 8% return.
In January 2017, the victim sent over $500,000 to Slothower to invest in these bonds. However, Slothower never held the funds or invested them; instead, he spent the money on a $125,000 Mercedes-Benz SUV and on membership dues at the Long Island National Golf Club, a private country club.
Slothower kept soliciting money from the first victim while making payments he falsely claimed were quarterly distributions. Slothower soon roped in funds from that victim’s spouse, who was convinced by what they thought were the consistent returns the investment had generated.
Again, Slothower didn’t use the money for investing in the HOA Bonds. Instead, Slothower paid off tens of thousands of dollars in credit card debt, including purchases totaling approximately $6,500 for a Chanel purse, $13,000 for a Rolex watch and $11,000 in clothing from Ralph Lauren, among others.
The scheme continued through June 2018, when he defrauded the couple of another $84,000, which he used to maintain the false quarterly dividend payments and his country club membership payments.
At the same time, Slothower committed mortgage fraud by lying to a mortgage lender about the source of the funds he raised from his victims.
When trying to refinance the mortgage on a home he owned, he told the mortgage lender (and submitted false invoices) that the victims’ funds had come from Slothower’s sale of a wine collection, a stamp collection and fine art. At trial, Slothower lied under oath when he denied doing so.