Southampton Investment Advisor Sentenced to 72 Months in Prison for Fraud Scheme

Earlier today, in federal court in Central Islip, Jeffrey Slothower was sentenced by United States District Judge Gary R. Brown to 72 months in prison for wire fraud, investment adviser fraud and money laundering in connection with a scheme to misappropriate more than $1 million from clients. In addition to the terms of imprisonment, Judge Brown ordered Slothower to pay $1,160,936 in restitution and in forfeiture.

Joseph Nocella, Jr., United States Attorney for the Eastern District of New York and James C. Barnacle, Jr., Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the sentence.

"Jeffrey Slothower used his position as an investment advisor to steal over a million dollars from an unsuspecting couple," stated United States Attorney Nocella. "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," stated FBI Assistant Director in Charge Barnacle. "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."

As proven at trial, Slothower orchestrated a scheme to misappropriate more than $1 million from current and prospective clients. Specifically, while operating Battery Private, a New York investment advisory firm, 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.

Based on Slothower's representations, in January 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 as promised, however, 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 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 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. 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, 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. Slothower's scheme continued through June 2018, when he defrauded Victim-1 out of another approximately $84,000. 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.

During the same period that Slothower defrauded Victim-1 and Victim-2, he also engaged in mortgage fraud. While attempting to refinance a mortgage on a residence he owned, Slothower misrepresented to the mortgage lender, both orally and through the submission of false invoices, that the victims' funds came from Slothower's sale of a wine collection, a stamp collection, and a fine art collection. At his trial, Slothower lied under oath when he denied classifying the victims' funds as the proceeds of an asset sale.

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 Adam Toporovsky and Benjamin Weintraub are in charge of the prosecution, with the assistance of Paralegal Specialist Janelle Robinson.

The Defendant:

JEFFREY SLOTHOWER
Age: 47
Southampton, New York

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