https://www.investmentnews.com/industry-news/news/former-investment-advisor-could-face-30-years-in-jail-for-fraud-money-laundering-253543

A former New York registered investment advisor has been convicted in connection with a scheme to misappropriate more than $1 million from clients – and faces up to 30 years in prison.

Jeffrey Slothower, founder of Battery Private, targeted two clients from California that he had advised when he was employed by a previous firm and told them that he could beat returns without market risk. He said he would invest one victim’s money in bonds backed by homeowner’s association fees with an 8% return.

The investor wired more than $500K to Slothower and Battery Private, assured that his money would be held in the firm’s “capital reserves.” But instead of making the promised investment or holding the funds in his firm’s account, Slothower bought a $125,000 Mercedes Benz SUV, and paid membership dues at Long Island National Golf Club, a private East End country club.  He paid what he said were quarterly dividends to the investor to cover his fraudulent activity.

The victim’s spouse was then convinced to make an investment from money they controlled, again more than $500K was wired to Slothower and his firm.

Repeating the behavior seen with the first victim, Slothower did not invest or securely hold the funds, but paid the second victim a false dividend while using their 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.

Both of the payments made by the victims were in 2017 with a further $84K paid in 2018 by the first victim, which was used to make false dividend payments to both victims and to pay golf club membership fees.

“This case was about greed and betrayal of clients who trusted the defendant and thought their money was safely invested with him,” stated United States Attorney Breon Peace.  “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.”

Slothower was charged in 2021 and was convicted last week by a federal jury in Central Islip of all three counts of an indictment charging him with wire fraud, investment adviser fraud and money laundering.

Peace thanked the Special Agents of the Federal Bureau of Investigation, New York Field Office, for their outstanding investigative work on the case.