Sources: Spitzer's been with several prostitutes

Gov. Eliot Spitzer had at least seven or eight liaisons over the last several years with prostitutes supplied by an international call girl ring based in New Jersey, according to sources familiar with the investigation into Spitzer's relationship with the ring.

The liaisons between Spitzer and a number of different prostitutes occurred around the country, including in Washington, D.C., and Florida, the sources said. For each encounter, Spitzer paid several thousand dollars, the sources said; The Associated Press cited a source that said the total could be as high as $80,000.

The circumstances of Spitzer's alleged dealing with the ring were uncovered by agents from the IRS Criminal Investigation Division and the FBI, tracing the flow of money from Spitzer's bank accounts to business fronts for the ring, conversations overhead on wiretaps, the governor's travel records and informants who worked for the ring.

A transcript of wiretap conversations revealed that he allegedly arranged for the Emperors Club to send a prostitute from New York City to the Renaissance Mayflower Hotel in Washington, where he planned to stay Feb. 13 before testifying to a congressional committee. The transcript is part of a federal complaint.

Spitzer ended up as the subject of an investigation into the prostitution because his bank branch in Manhattan turned him in to the Internal Revenue Service as someone who might be engaged in suspicious currency transactions, according to sources familiar with the investigation.

Agents of the IRS Criminal Investigation Division initially started a probe, fearing that the governor was the victim of some sort of blackmail scheme or that he was being victimized by an impostor, the sources said.

Spitzer last year had wanted to wire transfer more than $10,000 from his branch to what turned out to be the front for the prostitution ring, QAT Consulting Group, which also uses a number of other names, in New Jersey, the sources said.

But Spitzer had the money broken down into several smaller amounts of less than $10,000 each, apparently to avoid federal regulations requiring the reporting of the transfer of $10,000 or more, the sources said. The regulations are aim to help spot possible illegal business activities, such as fraud or drug deals.

Apparently, having second thoughts about even sending the total amount in this manner, Spitzer then asked that the bank take his name off the wires, the sources said.

Bank officials declined, however, saying that it was improper to do so and in any event, it was too late to do so, because the money already had been sent, the sources said.

The bank, as is required by law, filed an SAR, or Suspicious Activity Report, with the Internal Revenue Service, reporting the transfer of the money that exceeded $10,000, but had been broken down into smaller amounts, the sources said.

"The bank did the right thing," said one source familiar with the situation. The name of the bank could not immediately be determined.

But the source added that "we then got lucky" in singling out Spitzer and the ring.

Millions of SARs are generated each week and flow into the Internal Revenue Service nationwide, but an analyst at the regional IRS office in Hauppauge noted Spitzer's particular SAR and singled it out for attention to criminal investigators, the sources said.

The assumption, the sources said, was that Spitzer was being victimized either by a blackmailer or an impostor. The agents also speculated that perhaps the governor was involved in some sort of political corruption, the sources said.

The agents, located at an IRS office at 1180 Veterans Memorial Hwy. in Hauppauge, joined with prosecutors in the Southern District in New York to determine the circumstances surrounding the transfer of the money and the nature of the company it was going to. The Southern District was chosen because the bank transaction had occurred in Manhattan.

Eventually, FBI agents also joined the investigation because they have greater authority to look into possible political corruption and use wiretaps.