At least one suspicious-activity report was filed on the three wire transfers initiated by Mr. Spitzer in 2007, said the people familiar with the transactions. But the transfers don't appear to have explicitly violated banking regulations: Mr. Spitzer didn't disguise his identity, and the three payments of roughly $5,000 each are too small to automatically trigger federal reporting requirements. ...
The Journal notes:
However, Mr. Spitzer could face legal jeopardy if two $5,000 payments were an attempt to divide a single payment of $10,000 or greater, thereby evading the federal threshold for automatic transaction reporting by banks.
His lawyers contend:
... the governor didn't violate federal money-laundering or structuring laws because he didn't hide the transactions, which were in his name and from his bank accounts.
If true, so much for the reports that he used campaign accounts to hide the transactions.
His lawyers argue that it would be unfair to charge Spitzer if the other 9 clients named in the Affidavit for the Complaint aren't also charged.
[Spitzer laywer Michelle] Hirshman -- a former assistant U.S. attorney in Manhattan -- also argued that if federal prosecutors brought charges against Mr. Spitzer, they would be required to similarly charge the nine other unnamed clients in a federal complaint unsealed last Thursday, to avoid what's known in legal circles as "selective prosecution." None of the other nine unnamed clients have been charged in the case.
As to who approved the investigation, the Journal says it was U.S. Attorney Michael Garcia, making no reference to higher-ups like Alberto Gonzales, Michael Mukasey or anyone at Main Justice.
And in the "it was only a matter of time" department, a Save Spitzer campaign is underway.
Update: Shame on the NY Daily News for this accusation:
Although the cash used to pay for a $4,300 prostitute named "Kristen" apparently came from Spitzer's account, he used taxpayer dollars to fly to and from his .illicit rendezvous.
He was in Washington to attend a Congressional hearing, that's official business. It's not like he just went to have a tryst.
First Updated Post
Spitzer Plea Negotiations, Resignation May Come Tomorrow
Update: Albany Times Union says resignation expected Weds.
Bump and Update: CNN reports plea negotiations are underway and a resignation will occur as soon as they finish them, possibly tomorrow. Spitzer wants a package deal, wrapping up federal and state liability. Jeff Toobin thinks he's holding out for a misdemeanor.
Update: An anonymous federal investigator says Spitzer's total call girl tab may reach $80k. Now there is speculation on tv that Spitzer didn't use his personal account but his campaign account so as to hide the expenses from his family and that's why the public integrity section didn't let it go. White Collar Crime Blog says:
It would not surprise me that federal investigators were looking into whether any campaign money was involved in the transactions, or at least campaign bank accounts, that could be used so that it was not as apparent when slugs of cash were used for personal purposes. Whether that violates any federal laws is an open question, but I suspect the U.S. Attorney's Office is going to take a very close look at the flow of the money to see what roads it traversed.
The New York Times, which broke the story, will have this article tomorrow on the investigation.
Original Post
ABC: Jail Time an Issue in Delaying Spitzer Resignation
First, via Newsday, some new details on the financial details of Gov. Eliot Spitzer's money-moving -- He called his bank to have his name taken off a wire transfer to the escort agency.
After the governor transferred $10,000 by breaking it into smaller amounts, he then called the bank asking that his name be removed from the transactions, the sources said.
Investigators tell Newsday the bank filed a report saying the transfer was suspicious and the I.R.S., thinking Spitzer might be being blackmailed, or that there might be an imposter involved, started an investigation.
Spitzer last year had wanted to wire transfer more than $10,000 from his branch to what turned out to be the front for the prostitution ring, QAT Consulting Group, which also uses a number of other names, in New Jersey, the sources said.
But Spitzer had the money broken down into several smaller amounts of under $10,000 each, apparently to avoid getting around federal regulations requiring the reporting of the transfer of $10,000 or more, the sources said.
The bank then, as is required by law, filed an SAR, or Suspicious Activity Report, with the Internal Revenue Service, reporting the transfer of the money that exceeded $10,000, but had been broken down into smaller amounts, the sources said.
Now, we're supposed to believe in coincidence:
...the source added that "we then got lucky" in singling out Spitzer and the prostitution ring.
Millions of SARS are generated each week and flow into the Internal Revenue Service nationwide, but an analyst at the regional IRS office in Hauppauge noted Spitzer's particular SAR and singled it out for attention to criminal investigators, the sources said.
Here's the latest report from ABC News which will be on ABC World News tonight.
Federal investigators say there is no evidence Spitzer used state money or campaign funds to pay the prostitutes, but that the way he moved an estimated $40,000 through various accounts violated federal money laundering laws.
So we have a total amount now of $40k, but no details as to how many times Spitzer moved the money or, except as to the first transfer, whether any others exceeded $10k.
Then there's this:
A prison term is one of the issues holding up the governor's resignation as well as whether or not he pleads guilty to criminal charges.
Other than that, lawyers close to the case say New York Gov. Eliot Spitzer is prepared to resign and has his letter written.
The only source for an amount of prison time in the ABC report is an ex-prosecutor not involved in the Spitzer case. Here's the structuring statute and the structuring sentencing guideline.
I don't see jail time for Spitzer, regardless of what they charge him with or what the guidelines say. Resignation? My prediction is that will happen if and when he gets that assurance.
I'm still troubled by the "coincidental" nature of the discovery. I'm still not convinced he committed any crime (other than a technical Mann Act violation which the feds say they aren't interested in.) I'm not taking the word of unnamed government investigators.
And when are we going to get the indentities of clients # 1 through 8 and #10?
