ABC News: Spitzer, Not the Prostitution Ring, Was the Subject of Investigation
Update: According to the New York Times, the Attorney General did authorize investigation of Spitzer:
The inquiry, like many such investigations, was a delicate one. Because the focus was a high-ranking government official, prosecutors were required to seek the approval of the United States attorney general to proceed. Once they secured that permission, the investigation moved forward.
ABC News reports New York Governor Eliot Spitzer was the initial subject of the Justice Department investigation and it was his suspicious money transfers that led to their discovery of the prostitution ring. ABC says the feds are likely to charge him with the crime of structuring financial transactions:
The federal investigation of a New York prostitution ring was triggered by Gov. Eliot Spitzer's suspicious money transfers, initially leading agents to believe Spitzer was hiding bribes, according to federal officials.
It was only months later that the IRS and the FBI determined that Spitzer wasn't hiding bribes but payments to a company called QAT, what prosecutors say is a prostitution operation operating under the name of the Emperors Club.
The suspicious financial activity was initially reported by a bank to the IRS which, under direction from the Justice Department, brought kin the FBI's Public Corruption Squad.
"We had no interest at all in the prostitution ring until the thing with Spitzer led us to learn about it," said one Justice Department official.
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