You know the saying follow the money,that's what federal investigators apparently did, followed a trail of deposits from the governor's bank account to a business called "qat."
What investigators quickly learned was that qat was a rouse for a high-price prostitution ring.
The case started when banks noticed the frequent transfers from several accounts and filed suspicious activity reports with the Internal Revenue Service, the official said. The accounts were traced back to Spitzer, prompting public corruption investigators to open an inquiry.
The court affidavit that could bring down Governor Eliot Spitzer: It details an alleged pattern of sexual encounters, the latest with a "petite, very pretty brunette."
That was in Washington's Mayflower Hotel last month on Feb. 13. Spitzer was in town to testify before congress.
In the affidavit -- he is believed to be "Client 9."
Two law enforcement officials say that safety considerations mentioned in the affidavit related to Spitzer's preference to not wear a condom and insistence by the prostitute named Kristen that he wear one.
Investigators say he paid for everything -- "train tickets from Manhattan. Cab fare, mini-bar and the hotel bill" -- whatever it took to get the prostitute from New York to D.C.
"The prostitute is crossing state lines to form prostitution, and that is a violation of federal law. And that, he can certainly be liable for that, because criminally liable for that," said Fmr. Asst. District Attorney Dr. Schwartz.
The money was the problem. The encounter with "Kristen" shows a transaction of $4,300. The money was paid to a business account -- a collection point for a service called "The Emperor's Club."
Repeated pay-outs from the governor's account had made his bank suspicious.
The bankers alerted federal authorities -- that led to a wiretap -- and that ignited the scandal.
Attorney General Michael Mukasey was made aware of the investigation because it involved a high-ranking political official.
"We're talking about $5,000 a shot, we're not talking about pennies....Let's say he used it 20 times, you're talking about $100,000 being funnelled into a corrupt organization,"
The operators of the Emperor's Club are charged with "conducting prostitution and money laundering."
Charges against Spitzer have not been decided and it depends mostly on "how aggressive the U.S. attorney wants to be," the law enforcement official said. Charges could including anything from Mann act violations to banking violations to possibly wire fraud.
