Wednesday, March 12, 2008

Will Spitzer Be Prosecuted?

It's all about the money

Now that Eliot Spitzer has resigned as Governor of New York, the big question is whether he will be charged for a criminal act. During the past two days since the story broke, speculation has run rampant that Spitzer might be using resignation as a bargaining chip against being prosecuted. From my own law enforcement experience, albeit drug law enforcement, I see a strong possibilty that Spitzer is in serious trouble.

According to published reports, the investigation arose when Spitzer's own bank alerted IRS to suspicious bank transfers (apparently to off-shore accounts). That led to a federal wiretap that identified the prostitution operation that involved the governor.

Those types of bank transfers have also been prominent in the drug trade, where traffickers used bank wire transfers to send drug proceeds or payments for drugs. The IRS, to their credit, educated banks decades ago as to what was happening and enlisted their cooperation in uncovering drug money movements.

Under federal law, financial institutions are required by law to report money transactions in excess of $10,000 to the IRS. Drug traffickers, aware of that requirement, resorted to sending smaller amounts under $10,000, often going to multiple banks and sending multiple shipments of funds. That is also a crime-called Structuring, in essence, attempting to circumvent the reporting requirements.

So now, the question is-what exactly did Spitzer do in sending money to a criminal enterprise in the amount of tens of thousands of dollars? Of course, many will argue that it makes no sense to prosecute a man for patronizing prostitutes, although others will argue-why prosecute prostitutes and not their customers? The Mann Act is also in play, but I think the money transfer to a criminal enterprise is Spitzer's most serious problem. At this point, it appears (though not yet proven) that the Governor of New York (and former Attorney General who prosecuted prostitution rings) has engaged in a conspiracy with a large scale criminal organization and violated currency transaction laws in order to cover up his illegal activity. Of importance is what quantities did Spitzer transfer to the Emperor's Club? Apparently, it was suspicious enough to cause the bank(s)in question to alert the IRS. If,in fact, the money transfers were illegal, and given the fact that they were sent to a criminal enterprise, then Mr Spitzer is in deep legal trouble.

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