Elliot Spitzer

Today's Must Read

Paul Kiel | March 12, 2008, 9:55AM

How exactly did the feds end up snagging Eliot Spitzer? We've been asking the question since the story broke on Monday. Reports from a number of news outlets have been providing more and more details so that now, with the help of the feds' filings, it's possible to piece together a reasonably detailed timeline of how the investigation went down. So, without any more ado, here it is:

7/07: North Fork Bank in New York sends a Suspicious Activity Report to the Treasury Department about transfers in Spitzer's personal accounts. The "bank's report was triggered by Spitzer's attempt to structure a $10,000 cash transaction into three parts." Spitzer also reportedly asked the bank to "take his name off the wires." The report reportedly sits "unnoticed in a vast Treasury Department database in Detroit" for several months.

Fall, 2007: Another bank, HSBC, sends a Suspicious Activity Report to the Treasury Department "about suspicious transactions connected to two shell companies, which drew the attention of investigators. That touched off an inquiry that led investigators to discover the July report on Mr. Spitzer, which showed he had made several wire transfers to those companies, according to three people briefed on the inquiry."

10/07: The FBI and the IRS-Criminal Investigative Division launch an investigation "focusing on an organization suspected of conducting prostitution and money-laundering crimes in the United States and Europe" -- i.e. the Emperor's Club VIP.

1/8/08: Investigators begin wiretaps of Emperor's Club managers.

1/26/08: The FBI stakes out the Mayflower hotel in Washington, D.C. “after concluding from a wiretapped conversation that Spitzer might try to meet with a prostitute when he traveled to Washington to attend a black-tie dinner.”

2/7/08: Authorization for wiretaps expire.

2/11/08: Investigators renew wiretaps of Emperor's Club phones.

2/12/08: Wiretaps pick up Spitzer (reportedly "Client 9") discussing payments with Emperor's Club managers and setting up a rendezvous for D.C. the next evening.

2/13/08: Spitzer has his rendezvous with "Kristen."

3/5/08: Prosecutors arrest four managers of the prostitution ring. Investigator filings in support of the arrests detail the activities of "Client 9."

Update: This post has been updated to reflect later reporting.

Elliot Spitzer

How The "Emperor's Club" Probe Started

Paul Kiel | March 10, 2008, 4:41PM

There's sure to be some scrutiny of how federal prosecutors netted Gov. Eliot Spitzer, a rising star in the Democratic party, in a prostitution ring. Especially considering that prosecutors from Manhattan's U.S. attorney's public corruption section are working the case.

According to an affidavit by an FBI agent filed for a search warrant in the case the investigation, led by the FBI and IRS criminal investigators, began in October of last year and focused on the ring itself for prostitution and money laundering charges. The Emperors Club ring allegedly used more than 50 prostitutes and set up dates all over the country and international cities like London and Paris, and had more than $1 million in proceeds through its front company, called QAT.

The feds intercepted more than 5,000 telephone calls and text messages used by the company's alleged managers and 6,000 emails in the course of their investigation. The wiretaps lasted from January 8th through February 7th, when it expired, and then were renewed on Februrary 11th. As you can see from the excerpt from the affidavit posted below, investigators intercepted calls involving "Client 9," who is reportedly Spitzer, starting on February 12th and into February 13th.

It's not clear precisely how the investigation began. The FBI agent, Kenneth Hosey, does cite a conversation with a "law enforcement officer who had been involved in the investigation of a number of prostitution businesses in the New York City area." That officer (it's not clear if he works with New York City, the state or the feds) told Hosey that "in the end of 2006," he spoke with a confidential source who had worked as a prostitute in New York City. That source, who had gained immunity from prosecution, had told the law enforcement officer that she'd worked for the Emperors Club as a prostitute in 2006. Hosey said that further evidence had corroborated this. Again, it's not clear if this was a tip that led to the investigation, or just further information investigators discovered after the investigation began.

Update: Here's some clarity.

Elliot Spitzer

"Client 9"

Paul Kiel | March 10, 2008, 3:02PM

The New York Times cites "a person with knowledge of the governor’s role" that Eliot Spitzer is "Client-9" in last week's criminal complaint against four people who allegedly managed an international prostitution ring for wealthy clientele.

The New York Sun reported this morning that "prosecutors specializing in government corruption cases are leading the investigation."

Below are the relevant portions of a search warrant request filing filed by an FBI agent investigating the case (you can see the actual document here). The defendants mentioned below, Temeka Rachelle Lewis, Mark Brener, and Cecil Suwal, all are charged with managing and running the prostitution ring. QAT Consulting Company is alleged to be a front company used by the ring for transactions.

On February 12, 2008, at approximately 2:37 p.m., TEMEKA RACHELLE LEWIS, a/k/a 'Rachelle," the defendant, using the 6587 Number, called a prostitute who the Emperors Club marketed using the name "Kristen." During the call, LEWIS left a message for "Kristen" that the "deposit" had not arrived today, but that they should be able to do the trip if the deposit arrived tomorrow. (Call 9324R) . At approximately 4:03 p.m. , LEWIS received a call from "Kristen." During the call, "Kristen" said that she had heard the message, and that was fine. LEWIS and "Kristen" then discussed the time that "Kristen" would take the train from New York to Washington, D.C. LEWIS told "Kristen" that there was a 5:39 p.m. train that arrived at 9:00 p.m., and that "Kristen" would be taking the train out of Penn Station. LEWIS confirmed that Client-9 would be paying for everything - train tickets, cab fare from the hotel and back, mini bar or room service, travel time, and hotel. LEWIS said that they would probably not know until 3 p.m. if the deposit arrived because Client-9 would not do traditional wire transferring. (Call 9362) .

At approximately 8:12 p.m., TEMEKA RACHELLE LEWIS, a/k/a "Rachelle," the defendant, using the 6587 Number, received a call from Client-9. During the call, LEWIS told Client-9 that the "package" did not arrive today. LEWIS asked Client-9 if there was a return address on the envelope, and Client-9 said no. LEWIS asked: "You had QAT . . .," and Client-9 said: "Yup, same as in the past, no question about it." LEWIS asked Client-9 what time he was interested in having the appointment tomorrow. Client-9 told her 9:00 p.m. or 10:OO p.m. LEWIS told Client-9 to call her back in five minutes. (Call 9460R) .

At approximately 8:14 p.m., TEMEKA RACHELLE LEWIS, a/k/a "Rachelle," the defendant, using the 6587 Number, called MARK BRENER, a/k/a "Michael," the defendant, at the 0937 Number. During the call, LEWIS told BRENER that Client-9 had just called about an appointment for tomorrow, and that he had around $400 or $500 credit. SUWAL [defendant Cecil Suwal of New Jersey] said that she did not feel comfortable saying that Client-9 had a $400 credit when she did not know that for a fact. SUWAL and BRENER talked in the background about whether Client-9 could proceed with the appointment without his deposit having arrived. (Call 9462R). At approximately 8:23 p.m., LEWIS called Client-9, and told him that the 'office" said he could not proceed with the appointment with his available credit. After discussing ways to resolve the situation, LEWIS and Client-9 I agreed to speak the following day. (Call 9467R) .

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