A former New York investment advisor who was found guilty of defrauding his clients and misappropriating funds will be going to federal prison, Financial Advisor reported.
47-year-old Jeffrey Slothower was sentenced by United States District Judge Gary R. Brown to 72 months behind bars and ordered to pay $1,160,936 in restitution and in forfeiture. Slothower was convicted in May of 2024 of federal wire fraud, investment adviser fraud and money laundering.
According to the U.S. Attorney’s Office for the Eastern District of New York, Slothower orchestrated a scheme to misappropriate more than $1 million from current and prospective clients and used the funds for personal expenses and luxury items, including a country club membership.
While operating Battery Private, a New York investment advisory firm, Slothower solicited a California couple whose funds he had previously managed at another firm, prosecutors said. He promised to outperform their existing returns without market risk and, in 2017, offered to invest the first victim’s money in purported bonds backed by homeowners’ association fees paying an 8 percent return.
In January 2017, one of the victims sent more than $500,000 to Slothower at Battery Private to invest in those bonds. Instead of investing in HOA Bonds or holding the funds as promised, it was determined that Slothower transferred the funds to his personal accounts and used them to purchase a $125,000 Mercedes-Benz SUV and for dues at the Long Island National Golf Club. To further the scheme, he later made payments to the victim, falsely representing them as quarterly investment distributions.
Slothower later solicited additional investments from the first victim, including funds controlled by the second victim, then a Battery Private client. In December 2017, the second victim agreed to invest in the same bonds and sent more than $500,000 to Slothower to invest. Yet Slothower used these funds for personal expenses, including tens of thousands of dollars in credit card charges for a $6,500 Chanel purse, a $13,000 Rolex watch and more than $11,000 in Ralph Lauren clothing. Slothower made payments to the second victim that he falsely represented as quarterly investment distributions.
The scheme continued through June 2018, when Slothower obtained an additional approximately $84,000 from the first victim. He used those funds to make purported quarterly payments to both victims, which he falsely represented as investment returns, and to pay golf club dues.
During the same period of the investor fraud, Slothower also engaged in mortgage fraud while attempting to refinance a mortgage on a residence he owned, according to the U.S. Attorney’s Office. He misrepresented to the lender, both orally and through false invoices, that the victims’ funds were proceeds from the sale of wine, stamp and fine art collections. Prosecutors said Slothower falsely testified under oath at his trial that he had not characterized the victims’ funds as proceeds from asset sales.
In a separate, ongoing civil lawsuit, Slothower and Battery Private were accused of misappropriating more than $640,000 from another investor through a purported cash management arrangement.
The complaint filed by California investor Michael Day alleged that in 2017 Slothower solicited him to place funds with Battery Private, saying the money would be held as part of the firm’s cash capital reserves and could be returned on demand. Day was promised quarterly interest payments equivalent to an annual rate of 8%, the complaint alleged.
Based on those representations, he transferred approximately $643,000 to the firm through several transactions.
The lawsuit alleged that while some interest payments were initially made, distributions later stopped and repeated requests for the return of principal were met with false explanations. Slothower allegedly claimed the funds were tied up in illiquid assets, while continuing to send account statements acknowledging the balance owed.
The investment fraud attorneys at Hyman Cotter PC have decades of experience dealing with securities fraud cases and have a deep understanding of how capital markets and financial service firms are intended to work to protect investors. They work tirelessly to protect the rights and financial interests of those who have been victims in all manner of fraud cases. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Hyman Cotter at (844) 316 8277 or through our online contact form for a no-cost evaluation of your matter.
