Southampton Investment Adviser Accused By Feds Of Misappropriating Over $1 Million

Jeffrey Slothower, founder of a Manhattan-based investment advisory firm and a Southampton resident, was arrested by federal authorities in Southampton on Monday, December 6, accused of fleecing clients out of over $1 million. He faces charges of wire fraud, money laundering and investment advisor fraud.

President and founder of a firm called Battery Private, Slothower pursued clients he’d advised prior to starting Battery — a California couple, according to an indictment unsealed in federal court on Monday.

Beginning in 2016, he was able to convince the pair to invest over $1 million, by promising them a greater return on their money than others offered. But, according to the indictment, he used the pair’s money for personal expenses, including buying a $125,000 Mercedes Benz G Class SUV, paying some $19,000 in private golf club fees, giving his wife, former Miss Brazil Sasckya Slothower, $10,000, paying off his mother’s $13,000 car loan, and purchasing real estate.

According to Southampton Town records, in 2017, he paid $753,000 for property on Sandy Hollow Road in North Sea. According to a concurrent complaint filed by the Securities and Exchange Commission, one of his Southampton income properties is in foreclosure.

The financial advisor promised quarterly payments on the supposed investment returns, and made them at first, out of the $546,727 the husband, listed as Victim 1 in the indictment, had given him.

By late 2017, the wife, Victim 2, wanted in on the investment, which Slothower said would offer a significant return. She sent a wire transfer in the amount of around $540,000 to Slothower — some of which was used to pay off credit cards and put into the defendant’s personal bank account, the indictment alleges.

Having received $10,000 quarterly payments, in 2018, the husband wired another $84,000 to Slothower, which he would supposedly invest for Victim 1. Instead, the indictment notes, he paid another $11,622 to a private golf club, in addition to sending back small amounts as “returns” to the couple.

Those dried up by 2018’s fourth quarter, however. For several months, according to the indictment, Slothower offered excuses for the delays.

“As alleged, Slothower executed a calculated scheme in which he repeatedly lied to his current and prospective clients about putting their money into legitimate investments, when, in reality, he stole their money to fund his lavish lifestyle,” stated U.S. Attorney for the Eastern District Breon Peace in a release announcing the arrest. “This office will vigorously investigate and prosecute corrupt financial advisers like the defendant who abuse their clients’ trust and violate the law to enrich themselves.”

“Slothower joins the long-running list of those who exploit their position as investment advisors to siphon funds from their investors directly into their own pockets. This type of behavior is not only damaging to investors but to the overall economy as well. The FBI continues with our dedicated efforts to investigate those who commit this type of fraud wherever and whenever we can,” added FBI Assistant Director-in-Charge Michael Driscoll in the release.

Last August, the Securities and Exchange Commission filed a complaint against Slothower and Battery Private about the same alleged scheme, as well as a second that involved, according to the complaint, “misrepresentations and omissions in connection with private sales of a penny stock owned by Battery Private. Additionally, Slothower exaggerated Battery Private’s Regulatory Assets Under Management on the firm’s Form ADV filings in order to represent that Battery Private was an SEC-registered investment adviser.”

According to the SEC filing, “Slothower is the sole owner, chief executive officer and chief compliance officer of Battery Private. Battery Private has never had any employees.” The California couple, Victims 1 and 2, are now divorced.

The SEC complaint notes that prior to the transfer of $546,727 to Battery Private’s account, its balance was $3,333. Prior to the transfer of $540,00 from Victim 2, the account’s balance was 89 cents.