A former New York registered investment advisor convicted of misusing client and prospective-client funds was sentenced Thursday to six years in prison and ordered to pay over $1.1 million in restitution and forfeiture.
Jeffrey Slothower, 47, of Southampton, was sentenced in federal court in Central Islip for wire fraud, investment adviser fraud and money laundering in connection with the scheme, Joseph Nocella Jr., U.S. attorney for the Eastern District of New York, and James Barnacle Jr., FBI New York field office assistant director in charge, announced.
Prosecutors had charged the former advisor with using client funds to pay for luxury items, including designer jewelry and accessories, a fancy car and a country club membership, and a jury convicted him in 2024.
"Jeffrey Slothower used his position as an investment advisor to steal over a million dollars from an unsuspecting couple," Nocella said in a statement. "Today's sentence sends a message to all those that would use their positions as financial professionals to line their own pockets — our Office will prosecute you to the full extent of the law."
"Jeffrey Slothower crafted fabrications of profitable returns to conceal his true intention of reaching into his clients' wallets and personally pocketing their investments," Barnacle said in the statement. "Slothower stole more than one million dollars from his investors to fund extravagant purchases and repay his own credit card bills. The FBI will continue to unravel any web of lies used to unlawfully solicit investments at the cost of trusting clients."
While operating the investment advisory firm Battery Private, Slothower misappropriated money from current and prospective clients, specifically, a couple from California whose money he had managed at another firm where he'd been employed, according to the Justice Department.
Slothower promised the couple he could beat any rate of return they were receiving without market risk, the Justice Department said. In 2017, he offered to invest Victim-1's money into what he described as bonds backed by homeowner's association fees, or HOA bonds, which would pay an 8% return.
Victim-1 sent more than $500,000 to Slothower at Battery Private to be invested in the purported HOA bonds. Instead of investing the money or holding it as promised, Slothower funneled it into his personal bank accounts and used it to purchase a $125,000 Mercedes Benz SUV and membership dues at Long Island National Golf Club, the department said. He made payments to Victim-1 that were falsely represented as quarterly distributions from the victim's "investment," according to a press release.
Later, Slothower solicited Victim-1 to invest additional money, including funds controlled by Victim-2, 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 2017 sent more than $500,000 to Slothower at Battery Private.
Victim-2's money was not invested in HOA bonds either, prosecutors said. Instead, Slothower used that money to pay tens of thousands of dollars in personal credit card debt traced to an approximately $6,500 Chanel purse, a roughly $13,000 Rolex watch and more than $11,000 in Ralph Lauren clothing, among other items.
Slothower also made payments to Victim-2 that were falsely represented as quarterly distributions from the investment. His scheme continued through June 2018, when he defrauded Victim-1 out of another approximately $84,000, according to the Justice Department.
In 2021, the Securities and Exchange Commission filed a civil complaint against Battery Private and Slothower, alleging that he engaged in two separate fraudulent schemes, including misappropriating about $1.18 million from an advisory client and her then-spouse, a prospective advisory client.
Slothower previously was affiliated with Merrill Lynch, Northwestern Mutual and Goldman Sachs, among other firms, according to the Financial Industry Regulatory Authority's BrokerCheck database.
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