Patterico's Pontifications

3/10/2008

Another Spitzer Post — If this Report is True, His Problems Are A Lot Bigger Than First Seemed the Case — Updated

Filed under: General — WLS @ 5:56 pm

Posted by WLS:

According to this abcnews story, Spitzer’s involvement with this ring was not uncovered by virtue of some happenstance over-hear on a wiretap involving a prostitution ring. Rather, the feds targeted Spitzer himself based on a suspicious activity report filed by his bank, which noticed him paying large amounts of money in ways that it thought were evidence of criminal conduct. This report says Spitzer is suspected of “structuring” which is the intentional structuring of financial transactions involving cash in amounts less than $10,000 for the purpose of avoiding the filing of “Currency Transaction Reports” with IRS and FBI. They indicted the prostitution ring based on what they uncovered in looking into Spitzer, but the facts suggest to me that Spitzer has received a target letter indicating that he is the target of a federal criminal investigation for his conduct.

Combine this with the play between the sheets, and I think NY has a new governor by late morning tomorrow.

– WLS

Updated 3/11 — After having taken a few minutes to read through the documents posted, what I can say is this.  The SDNY has charged 4 people in connection with violations of federal law connected to their operation of an international prostitution ring.  This investigation included a wiretap that went up in Dec. 2007, and was probably up for 90 days — which is pretty normal.

They are looking into an intentity called “QAT Consulting,” which is the “business” name used by the prostitution ring to run through credit card bills and pay its taxes (according to the operators). 

Because much of this business is done in cash, both the johns and the pros have to handle large quatities of cash, which can tend to make banks suspicious and leads them to file STRs with the FBI and the IRS where they identify the account, account holder, and any principals named on the account.  

But I suspect that separate and apart from this investigation there was a second investigation initiated of Spitzer based on STRs filed.  The suspicion was that his deposits for the benefit of one or more shell companies operating as “QAT Consultants” were transactions designed to shield something.  Some of the reporting suggests the investigators thought he might be laundering bribe money into shell companies, and they went looking into QAT to see if they could find how the money was getting back to Spitzer.

I think it was at that point that the two seperate investigations came together – one looking at QAT Consultants as a prostitution ring, and the other trying to figure out why Spitzer was deposition large amounts of cash with a shell company that did no business so far as anyone could tell. 

Then Spitzer turns up on the wiretap around February — though I doubt that was the first time they caught him on the wiretap.  In addition to recording each incoming and outgoing call to the Prostitution ring, the technology allows the government to ”trap” the incoming number or to record the number called by the phone being monitored.  So the agents on the wiretap would have known almost instantly that the call was coming from a cell phone (or hardline) linked to Spitzer. 

From there its pretty ordinary police work. 

57 Comments

  1. WLS, if he pleads to one count of violating 31 U.S.C. § 5313(a), with no priors or aggravation and good cooperation, could that work out to a no-time recommendation? I’m guessing that’s the deal, but I just don’t know how the 5-year max for that statute would play out under the sentencing guidelines.

    Comment by Beldar (433d17) — 3/10/2008 @ 6:28 pm

  2. This really is fortuitous for the citizens of the State of NY, and pretty much Americans in general. This guy was quintessentially all that is wrong with politics, wrapped up in a smarmy slimy package.

    Comment by JD (626b4c) — 3/10/2008 @ 6:34 pm

  3. I feel so badly for his wife and three teenage daughters. They are the biggest victims in this whole sordid mess.

    Comment by Ann (da3ab8) — 3/10/2008 @ 6:39 pm

  4. I turned off the news, but my better half had to ask which party he was in. I told her that if they are not identified, it is nearly always a Dem, because had it been a Republican, there would have been a huge flashing light with Republican sex scandal all over the screen.

    Comment by JD (626b4c) — 3/10/2008 @ 6:46 pm

  5. JD, every news report I saw ID’s him as a Democrat.

    Who is the lt. gov. that will replace him?

    Comment by kishnevi (162496) — 3/10/2008 @ 6:51 pm

  6. I quit watching, kishnevi, but the couple I saw that did ID him did so in passing. Compare and contrast to the Larry Craig story, which was not about teh buttsecks but about TEH HYPOKRISY !!! REPUBLICAN SENATOR IN BATHROOM SEX STING !!!!
    Eliot Spitzer dragged into prostitution ring scandal.

    Comment by JD (626b4c) — 3/10/2008 @ 6:55 pm

  7. If he is popped for “structuring”…wasn’t that section of law signed into effect by William Jefferson Clinton in the mid-90′s?

    If so, irony can be so ironic at times…

    Comment by mjn99999 (6e1275) — 3/10/2008 @ 7:06 pm

  8. “and I think NY has a new governor by late morning tomorrow.”

    What’s Rudy up to these days?

    Comment by Dana (582893) — 3/10/2008 @ 7:11 pm

  9. i marveled at this – he was discovered through his structured transactions at the bank (what we call smurfing on the street), can somebody here tell me just how many tens of thousand dollars worth of side professional pussy a big-state governor needs to stay in the groove?

    Comment by assistant devil's advocate (f35ae0) — 3/10/2008 @ 7:24 pm

  10. more than you can afford!

    Comment by ada's sockpuppet (f35ae0) — 3/10/2008 @ 7:30 pm

  11. How ironic that by insisting on cash transactions, Spitzer appears to have single-handedly brought down this prostitution ring. There’s an argument it was his most effective prosecution.

    Comment by DRJ (a431ca) — 3/10/2008 @ 7:34 pm

  12. Yeah, that’s it! That’s the ticket! I was working undercover!

    Comment by client #9 (5ce644) — 3/10/2008 @ 7:38 pm

  13. nk….(cough…hack….cough)

    that was (hahahahaha) unfair….your drinking problem….my wife is still laughing….I’m having…(breathe, reff, breathe) trouble gathering my self….

    I’ll have to sleep now….so I can recover….

    Comment by reff (59b2ad) — 3/10/2008 @ 7:41 pm

  14. How long until the folks at Kos or HuffPo start their conspiracy theories that this was all Karl Rove’s doing, meant to distract us from illegal wiretapping and the failed war in Iraq?

    Comment by JD (626b4c) — 3/10/2008 @ 7:42 pm

  15. JD, from the other Spitzer post…

    http://www.dailykos.com/storyonly/2008/3/10/185251/010/127/473813

    It’s already happened….

    Comment by reff (59b2ad) — 3/10/2008 @ 7:50 pm

  16. Oh, and thanks to Dana for the link…

    Comment by reff (59b2ad) — 3/10/2008 @ 7:50 pm

  17. reff – Predictable, yet disturbing nonetheless. Just remember, that asshate cancels out your vote.

    Comment by JD (626b4c) — 3/10/2008 @ 7:55 pm

  18. Sorry, reff.

    Comment by nk (5ce644) — 3/10/2008 @ 7:55 pm

  19. I can see Mrs. Spitzer picking up the NYTimes:

    Silda: Dear, I see here that you are picking up whores.

    Eliot: Huh. You know the Times, though. I think they were talking about Rudy.

    Silda: No, dear, it’s you.

    Eliot: Oh, yeah! The prostitutes. I forgot. Sorry about that.

    Silda: Well, I’m a little miffed, but I understand.

    Eliot: Thanks, dear!

    Silda: Oh…. how much did that cost?

    Eliot: Oh, you know… not even forty grand.

    Silda: FORTY GRAND?

    Eliot: You said it was OK!

    Silda: FORTY THOUSAND MOTHERFUCKING DOLLARS?

    Eliot: No, dear. Most of it was naughty-schoolgirl-fucking dollars, really.

    Silda: Out! Out! Out!

    –JRM

    Comment by JRM (355c21) — 3/10/2008 @ 8:05 pm

  20. Alan Dershawitz on one of the talk shows, stated that this was evidence of the corruption of the Bush Administration: Republican prosecutors going after a high-profile Democrat politician.
    What a piece!

    Comment by Another Drew (8018ee) — 3/10/2008 @ 8:16 pm

  21. Talk Left reports that Spitz has lawyered up and that he will be resigning on Tuesday. The thing is, how often do they have him on tape since he was running a credit with this company and giving them more money to put on account for “the next time.” I hope he hits real hard as he hits rock bottom. The hypocrisy of this slime knows no bounds. And what is wrong with DC hookers that he had to arrange to bring Kristen from New York to DC to service him. And what’s with the “things not safe” remark by the hooker?

    You would think a man as rich as Spitz could squirrel away a honey pot in her own condo somewhere, rather than having to use high-priced call girls that need to be transported state to state. He couldn’t wait a day or two until he was back in NYC?

    To answer a question, the Lt. Gov, black and blind, will succeed him. From what I’ve heard today, he is well thought of by both parties.

    Wall Street is singing “There is a God” according to the NYT.

    Comment by Sara (3337ed) — 3/10/2008 @ 8:20 pm

  22. This report says Spitzer is suspected of “structuring” which is the intentional structuring of financial transactions involving cash in amounts less than $10,000 for the purpose of avoiding the filing of “Currency Transaction Reports” with IRS and FBI.

    OK…I ain’t a lawyuh and I don’t even in the vaguest terms condone what Eliot Mess did, but this “structuring” business has always puzzled me. The $10K threshold is supposed to trigger Fed scrutiny, but transactions of LESS than 10K can trigger an investigation as well.

    So is there actually an amount that low enough that it absolutely wouldn’t invite scrutiny at all, or is it all dependent on the zeal of the banker(s) and/or Feds (or lack of same)? It all seems uncomfortably elastic to a layman. Enlighten me.

    Comment by L.N. Smithee (da3035) — 3/10/2008 @ 8:21 pm

  23. LN – Trying to figure out what figure will keep you safe ? LOL

    Comment by JD (626b4c) — 3/10/2008 @ 8:24 pm

  24. LN -

    I think scrutiny can be triggered by the frequency of cash deposits, as well as by the amount.

    Comment by DRJ (a431ca) — 3/10/2008 @ 8:30 pm

  25. Anything that raises suspician on the part of your banker has to generate a report to the Feds.

    It would be a good idea to be on very friendly terms with your banker (you probably should know where his bodies are buried), if you ever intend to dance around the perimeters of the financial laws.

    Comment by Another Drew (8018ee) — 3/10/2008 @ 8:30 pm

  26. The funniest thing I read all day is a comment at JOM in regard to the Gov. Blagojevich/Rezko investigation in Obama’s home state of Illinois and now Gov. Spitzer of Hillary’s New York:

    It’s interesting to consider that the nomination for President may hinge on how many Superdelegates are in jail by the time the convention is held.

    Comment by Sara (3337ed) — 3/10/2008 @ 8:30 pm

  27. DRJ…
    Also, withdrawals.

    [Yes, good point ... especially in this case. -- DRJ]

    Comment by Another Drew (8018ee) — 3/10/2008 @ 8:31 pm

  28. Another Drew wrote: Alan Dershawitz on one of the talk shows, stated that this was evidence of the corruption of the Bush Administration: Republican prosecutors going after a high-profile Democrat politician. What a piece!

    Next thing you know, they’ll drag that dame from Alabama with the bad wig in front of a camera to claim that she was sent by Karl Rove to catch Spitzer in the act “if [she] could.”

    Taking your account of Dershowitz at face value: It’s as if the Bush Administration didn’t put Republicans Duke Cunningham or Bob Ney in prison. Every time I find myself applauding something he has said, he always pulls one of these out of his trap. That’ll teach me.

    Comment by L.N. Smithee (da3035) — 3/10/2008 @ 8:32 pm

  29. Spitzer always did prefer payments in ‘hard dollars’ to ‘soft dollars’.

    Comment by Andrew J. Lazarus (aec401) — 3/10/2008 @ 8:32 pm

  30. it’s ok for a public official to have a concubine as long as he makes full disclosure, supports her with public money and moves her into the mayor’s mansion.

    Comment by rudy giuliani (f35ae0) — 3/10/2008 @ 8:33 pm

  31. JD wrote: LN – Trying to figure out what figure will keep you safe ? LOL

    Believe me, wondering what to do with $10K at a time is a problem I dream about having someday.

    Comment by L.N. Smithee (da3035) — 3/10/2008 @ 8:34 pm

  32. I see the trolls are out tonight.

    Comment by SPQR (26be8b) — 3/10/2008 @ 8:38 pm

  33. SPQR wrote: I see the trolls are out tonight.

    After the infestation of the Obamabots two weeks ago, just a couple of trolls is like swatting gnats.

    Comment by L.N. Smithee (da3035) — 3/10/2008 @ 8:42 pm

  34. Those Obamatrons … odd, they are. The trolls are actually not nearly as bad as I had expected. I figured all I would see everywhere would be Miss Cleo screeching Larry Craig at the top of her shrill voice. Not so much. Apparently, they are all back at their home bases, getting their talking points and conspiracy theories straightened out.

    Comment by JD (626b4c) — 3/10/2008 @ 8:49 pm

  35. Just think… Soon he’ll be so poor from legal fees, and all that…

    He’ll be reduced to <$1000 a night whores before long… Poor guy.

    Nothing as depressing as cheap hoes.

    Well, besides the whole “I am paying money to have sex” thing. That’s pretty fucking sad as it is…

    Comment by Scott Jacobs (d3a6ec) — 3/10/2008 @ 9:00 pm

  36. it’s ok for a public official to have a concubine as long as he makes full disclosure, supports her with public money and moves her into the mayor’s mansion.

    There’s a difference between “mistress” and “whore”. One you pay a nightly fee, the other it’s more of a months thing… :)

    Comment by Scott Jacobs (d3a6ec) — 3/10/2008 @ 9:02 pm

  37. Yep, Scott, renting sex is illegal. But leases for sex …

    Comment by SPQR (26be8b) — 3/10/2008 @ 9:04 pm

  38. It is all a Rove plot.

    They forced Spitzer to travel to Washington to fuck that whore.

    Think of how embarrassing that would be for Eliot to admit.

    Rove you magnificent bastard!

    Comment by daleyrocks (906622) — 3/10/2008 @ 9:26 pm

  39. renting sex is illegal. but leases for sex…

    what about a lease-option for sex? isn’t that your standard serially monogamous hookup?

    Comment by assistant devil's advocate (f35ae0) — 3/10/2008 @ 10:18 pm

  40. daleyrocks: I was about to write that at least in his unsatisfying press conference, Spitzer didn’t quote Marion Barry. Then it occurred to me: Even after Barry claimed “That b*tch set me up!” he eventually was elected mayor of D.C. again!

    Comment by L.N. Smithee (dacb40) — 3/10/2008 @ 11:30 pm

  41. Yes LN, but as far as we know, cocain isn’t involved in the Spitzer story, so that line wouldn’t work…

    Oh, if only he’d videotaped the acts, he would be safe…

    Comment by Scott Jacobs (d3a6ec) — 3/10/2008 @ 11:37 pm

  42. Silda looked allot hotter in previous photos when she thought hers was the only one for him.

    She looked like crap today, and should not have stood beside him to face this. You can bet there will be no hot activities in that house for a long while! I am not referring to the screaming knife throwing pan crashing and dish breaking episodes to come either.

    BUT.

    Too many women forget the keys to prevent their man from wandering to another warm body. After all ladies, you are dealing with but a man, right?

    Comment by TC (1cf350) — 3/11/2008 @ 1:49 am

  43. “Too many women forget the keys to prevent their man from wandering to another warm body. After all ladies, you are dealing with but a man, right?”

    It does look like the trolls are out.

    Comment by stef (ae4236) — 3/11/2008 @ 4:24 am

  44. I hope the MEDIA looks into all his financial dealings,especially with his dad’s money involved in his election as Governor. His poor wife had to stand by his side while he proclaimed his “Progressive” goals for New York will be put on hold by this private matter. What a piece of shit.

    Comment by mike191 (2af201) — 3/11/2008 @ 4:24 am

  45. I have heard other sites mentioning a Mann Act violation. Did the women cross a state line?

    Comment by agesilaus (9923ce) — 3/11/2008 @ 4:53 am

  46. It would seem she went to meet him in DC at least the one time (and likely there were others at other times).

    So yeah, ol’ boy is boned.

    And stef, there IS an old saying by Ron White: “You can’t not have sex with me for 6 months. I’ll go have sex with someone else – I’ve seen me do it… I’m an easy to please old dog, but if you don’t pet me once in a while it can be hard to keep me under the porch.”

    Not saying that getting more “attention” would have kept him from doing this. Likely, he just liked the idea of banging a younger, hotter woman than his wife.

    I don’t know, I don’t claim to be that breed of guy.

    Comment by Scott Jacobs (fa5e57) — 3/11/2008 @ 5:51 am

  47. Here’s a new dimension to this sordid situation: Spitzer’s nom de scum “George Fox” was not picked from thin air a la “Art Vandelay” — Eliot Mess has a friend and supporter of more than twenty years by that name. WNBC.com tracked him down.

    Is there nobody that this guy didn’t screw, both literally and figuratively?

    Comment by L.N. Smithee (b048eb) — 3/11/2008 @ 9:12 am

  48. Points for daleyrocks.

    Comment by SPQR (26be8b) — 3/11/2008 @ 9:53 am

  49. Yes, banks are required to notify the Feds about suspicious cash activity. Why didn’t Spitzer know this, or act accordingly? His blind arrogance is amazing.

    BTW this affects lots of people. When a friend asked why I left the employ of a school owned by (illegal I’m sure now) immigrants when they started to insist on paying me cash, I told her, either I put it in the bank and get nabbed by the bank and IRS or I leave it under my mattress and get a home invasion by a gang. Not worth it.

    Comment by Patricia (f56a97) — 3/11/2008 @ 10:29 am

  50. CTRs – Currency Transaction Reports — are filed by banks and other covered institutions whenever anyone engages in a “financial transaction” involving $10,000 or more in currency. There are exceptions which banks can make for customers that regularly do business on a daily basis in excess of $10,000 cash so that every deposit they make doesn’t trigger a CTR — one common such business is a big multiplex movie theater.

    STRs — Suspicious Transaction Reports — are filed by banks and other covered institution anytime an employee or customer is engaging in financial transcations which, in the view of the bank based on the banking practices of that customer or certain profiles banks use, appear to possibly be connected to criminal activity. This is generally referred to as the “know your customer” obligation of the bank. Each bank has a policy for implementing its obligations under the Bank Secrecy and Anti-Money Laudering Act. Banks are chartered and regulated institutions, and a failure by a bank to have an effective policy for uncovering and reporting suspicious activities can result in hefty fines by bank regulators such as the Federal Reserve or Office of Thrift Supervision.

    The CTRs and STRs are like “early warning” alarms that law enforcement uses to look a little closer at the person engaging in the transactions.

    That’s what happened to Spitzer.

    Comment by WLS (68fd1f) — 3/11/2008 @ 11:35 am

  51. Former Judge Tills resigns

    Federal Judge Investigated

    And the beat goes on! :)

    Comment by TC (1cf350) — 3/11/2008 @ 11:54 am

  52. Again from Ace, who has his teeth sunk deep into this, Spitzer has been a patron of prostitutes for six or seven years. Which leads to speculation whether he was taking out the competition when he busted the other two prostitution rings.

    And, BTW, Client #10 from Chicago is not me.

    Comment by nk (5ce644) — 3/11/2008 @ 12:52 pm

  53. Your wife then? Do they have boy-whores? :)

    Taking out the competition, or taking care of people he owed money to…

    Comment by Scott Jacobs (fa5e57) — 3/11/2008 @ 1:00 pm

  54. Looking to supersede Ehrenstein on my fecal roster, Scott?

    Comment by nk (5ce644) — 3/11/2008 @ 1:54 pm

  55. It may be too early to comment on this breaking scandal regarding Eliot Spitzer, but since I have no desire to make political points over this issue, I will go ahead and give my take as things stand now. I will not recount the details as they have been reported, rather try to put it into perspective.

    First of all, it would not be fair to try and frame this in political terms-liberal vs conservative or Democrat vs Republican. Suffice to say that this story serves to prove the point that these transgressions by public officials cut across party lines. Today, we have a scandal by a Democratic politician, the Governor of the State of New York, Eliot Spitzer. In recent months or years, we have seen similar sexual scandals by Republican politicians, specifically, Mark Foley, Larry Craig and David Vitter. We have also seen the indictment of Democratic Congressman, William Jefferson of Louisiana, for bribery. Other bribery investigations are still in progress against both Republican and Democratic politicians. No doubt, many Republicans are cheering the news today. Spitzer is not regarded as a well-liked personality, and he has few defenders.

    In today’s press conference, Spitzer, while not going into details, all but confirmed that the breaking story against him has merit. Will he resign? He did not say, and speculation is strong that he is holding that option open as a bargaining chip against any possible indictment.

    Should Spitzer be indicted if he, is in fact, involved in patronizing a high-priced prostitution ring? I will let the evidence dictate that. Is there a crime possibly involved? Very possibly- especially if the New York Governor participated in ordering that a prostitute be sent from New York to Washington DC (across state lines) for his use-as is reported.

    More importantly, if all this is true, should Spitzer continue as Governor? In my view, unless this is all a big mistake or misunderstanding-no, he should not. Once a public official violates the law, he or she no longer belongs in public office. Let us not forget that, as New York Attorney General, Spitzer prosecuted prostitution rings-in 2004 holding a strongly-worded press conference in announcing prostitution indictments.

    Am I morally outraged at Spitzer’s conduct? No. He is hardly the only man who has cheated on his wife and utilized the services of prostitutes. But he is the Governor of New York and formally Attorney General. First of all, a man in Spitzer’s position who engages in this activity, automatically leaves himself/herself open to blackmail.

    In addition, sexual transgressions, may or may not violate the law, public sensibility, or what have you. Sometimes, with everyday people, it is no one else’s business. Not so with elected officials. Is it too much to ask that an elected official reign in his/her desires when they could interfere with their public service? As for patronizing prostitutes, there are legal ways to engage in that behavior. For example, Spitzer could have gotten on a plane and gone to a legal brothel in Nevada, thus not violating any laws. He could have traveled to any one of a number of foreign countries where prostitution is legal. Had that been the case, then I might argue that he should not have to resign. Unfortunately, Spitzer chose to engage in an illegal activity-supporting a lucrative and illegal enterprise and opening himself open to blackmail in the process.

    In the coming days, further developments are sure to come. What I don’t think will change is the principle behind this posting. While not trying to portray this as some typical Democratic scandal, hopefully, people like Nancy Pelosi or John Dean will think twice before talking about the so-called “Culture of Corruption” in the Republican Party. It affects both parties, and we as Americans, need to think about what is wrong with our system of politics that we are continually attracting people like Eliot Spitzer into “public service”.

    gary fouse
    fousesquawk

    Comment by fouse, gary c (7b7c7c) — 3/11/2008 @ 4:01 pm

  56. Merely asking a question, NK. I meant nothing by it, Hoss. You know i’m playin’…

    Comment by Scott Jacobs (d3a6ec) — 3/11/2008 @ 7:51 pm

  57. You can tell he is a democrat even if they didn’t post it- He was caught with a woman!

    Comment by Jim Henderson (1d9abc) — 3/12/2008 @ 4:39 pm

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