Ex-Advisor Convicted of Swindling Couple Out of $1M

What You Need to Know

The former broker told the victims that they were investing in bonds backed by HOA fees.
He used their money to pay for luxury items and a country club membership, the jury found.
He faces up to 30 years in prison for fraud and money laundering.

A former New York registered investment advisor faces a potential 30-year sentence after being convicted of misusing over $1 million in client and prospective-client funds to pay for luxury items, including designer clothing and accessories and a country club membership.

A federal jury last week convicted Jeffrey Slothower, 46, founder of investment advisory firm Battery Private, of all three counts of an indictment charging him with wire fraud, investment advisor fraud and money laundering in connection with a scheme to misappropriate clients’ assets, the Justice Department announced.

The verdict in a Central Islip, New York, court followed a three-day trial before U.S. District Judge Gary R. Brown, the department said, noting that Slothower faces up to 30 years in prison when sentenced.

Breon Peace, U.S. attorney for the Eastern District of New York, and James Smith, assistant director-in-charge, FBI, New York Field Office, 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,” Peace said.

“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,” the prosecutor added.

The former registered advisor and broker was found to have orchestrated a scheme to misappropriate more than $1 million from current and prospective clients, according to the Justice Department.

Specifically, while operating Battery Private, Slothower solicited business from “Victim-1″ and “Victim-2,” a California couple whose money Slothower had managed at another financial services firm where he was previously employed.

(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.)

Slothower promised the couple he could beat any rate of return they were receiving, 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, or “HOA bonds,” which would pay an 8% return, according to prosecutors.