Investment adviser Jeffrey Slothower of Southampton found guilty of fraud

A Southampton investment adviser was convicted Thursday of defrauding two clients out of more than $1 million and using the money to pay off credit card debt and to purchase a BMW and a Hamptons Country Club membership, federal prosecutors said.

Jeffrey Slothower, 46, a former registered investment adviser and founder of Battery Private, an investment advisory firm, was convicted by a jury in Central Islip of federal wire fraud, investment adviser fraud and money laundering. Slothower faces up to 30 years in prison.

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

Slothower's defense attorney, Evan Sugar of Federal Defenders of New York, did not respond to a request for comment Thursday evening.

In 2017, Slothower solicited business from a couple from California whose money he had previously managed when he worked at another financial services firm, promising them he could beat any rate of return they were receiving without any market risk, prosecutors said.

Slothower offered to invest the victims' money into what he described as bonds backed by homeowners association fees, paying an 8% return, authorities said.

In late January 2017, the first client sent Slothower more than $500,000, which Battery Private said would be held in the company's "capital reserves," officials said.

But instead of investing the money or holding it in reserve, Slothower funneled it into his personal bank accounts, prosecutors said, using the proceeds to buy a $125,000 Mercedes-Benz SUV and membership dues at Long Island National Golf Club, a private East End country club.

As part of the scheme, Slothower made payments to the victim he falsely represented as quarterly distributions from his investment, records show.

Enticed by the supposedly steady rate of return, the first victim's spouse also agreed to invest in the same HOA bonds, sending Slothower more than $500,000 in December 2017, prosecutors said.

Similar to the first victim, Slothower failed to invest the funds or hold them in reserve, instead using the money to pay tens of thousands of dollars in personal credit card debt traced to a $6,500 Chanel purse, a $13,000 Rolex watch and more than $11,000 in Ralph Lauren clothing, officials said.

Slothower made payments to the second victim, again representing the money as quarterly distributions from the supposed investment, prosecutors said.

Finally, in June 2018, the first victim made an additional investment of about $84,000 into the purported HOA bonds. Slothower, prosecutors said, used that money to pay membership dues at the private golf club and to make quarterly payments to the couple he falsely represented as their investment return.

By Robert Brodsky

robert.brodsky@newsday.com@BrodskyRobert

Robert Brodsky is a breaking news reporter who has worked at Newsday since 2011. He is a Queens College and American University alum.