The feds might never have caught on to Eliot Spitzer‘s hooker-loving ways had the governor not second-guessed himself over payments he made to his pimp’s bank account.
Last year, Spitzer wired more than $10,000 from a Manhattan bank account to a front company for the Emperors Club VIP, which hired out prostitutes to high-end clients, according to a newsday.com report.
But in an apparent effort to evade federal regulations requiring that transactions involving $10,000 or more be disclosed to the government, Spitzer broke up the money into a series of smaller transfers on numerous occasions over at least a year, sources said.
Despite that, Spitzer got worried that he could be tied to the transfers and asked the bank to remove his name from the transactions. The bank reportedly refused, not only because of regulations, but also because the money had already gone out.
The unidentified bank then notified the Internal Revenue Service, as required by law, that Spitzer had sent more than $10,000 in a way that appeared designed to avoid disclosure requirements, the report said.
A law-enforcement source told The Post yesterday that financial transactions are “the crux of the investigation” into Spitzer, and that federal probers do not yet know the full extent of his possible chicanery.
“They’ve got to go through the money trails,” the source said.
The investigators want to find out where all the money – the cash used to pay the girls, rent the rooms, transportation to trysts – came from.
Spitzer’s apparent panic over the wire transfers set in motion a probe that led to the filing of criminal charges last week against people who ran the Emperors Club.
Within days, Spitzer’s name emerged as “Client 9,” the man who paid the escort service several thousands dollars for a sex tryst with a young woman in a Washington hotel room last month and for expected future trysts.
Further evidence that Spitzer went out of his way – albeit ham-handedly – to hide his penchant for perky prostitutes emerged Monday night from one of his most ardent foes.
Kenneth Langone, a renowned venture capitalist who fiercely objected to the way Spitzer cracked down on Wall Street as attorney general, told CNBC: “I know for sure [Spitzer] went himself to a post office and bought $2,800 in mail orders to send to the hooker.”
Langone said he knew a person who stood behind Spitzer in line at a post office when the governor allegedly made the purchase.
“He’s a hypocrite,” railed Langone to CNBC. “He destroyed reputations of people who had good reputations and deserved reputations.”
An official told the Associated Press yesterday that Spitzer spent as much as $80,000 with the Emperors Club.
H. James Pickerstein, a former acting US attorney for Connecticut, said that if Spitzer intentionally broke up cash transfers into several wire payments to get around the federal disclosure requirement, he could be prosecuted for the crime of “structuring.”
And if Spitzer made such payments, or used money orders to pay the prostitution ring, he could also face money-laundering charges for paying an entity he knew to be a criminal enterprise.
Sources have told The Post that federal investigators first believed when they began eyeing Spitzer that his questionable financial transactions might be linked to campaign-finance violations.
But they were surprised to learn that his funneling of several thousands of dollars to a front called QAT was to pay for prostitutes.
A criminal complaint against the Emperors Club, which did not identify him by name, said the governor was a regular client of the escort service, which offered customers a range of hookers costing up to $5,500 per hour.
Additional reporting by Larry Celona