https://libn.com/2024/05/17/southampton-man-convicted-of-fraud-money-laundering/

A former Southampton investment advisor was convicted in federal court in Central Islip Thursday of fraud and money laundering charges in a $1 million scheme in which he used the money for luxury items and a country-club membership, officials said.

After a three-day trial, Jeffrey Slothower, a former registered investment adviser and founder of the New York investment advisory firm Battery Private, was convicted of wire fraud, investment adviser fraud and money laundering, according to the U.S. Justice Department.

“This case was about greed and betrayal of clients who trusted the defendant and thought their money was safely invested with him,” Breon Peace, U.S. attorney for the Eastern District of New York, said in a news release about the conviction. “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.”

Officials said that Slothower devised a scheme to misappropriate more than $1 million from clients and prospects. While operating Battery Private, Slothower solicited business from a couple from California whose money he 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, 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, known as HOA bonds, which would pay an 8% return.

Slothower sent Victim-1 wiring instructions for his investment and attached a document that made additional representations about Victim-1’s purported investment, claiming that the client’s money would be held in the capital reserves of Battery Private. Between January 25, 2017, and January 27, 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 in capital reserves, 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. Slothower then 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 funds, including those controlled by Victim-1’s spouse, who was then a Battery Private client. 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 or held in capital reserves as represented by Slothower. Instead, he 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. Slothower made payments to Victim-2 that were falsely represented as quarterly distributions from Victim-2’s investment.

In June 2018, still unaware of the fraudulent scheme, Victim-1 made an additional investment of approximately $84,000 into the purported HOA bonds. 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.

Slothower now faces up to 30 years in prison.