Spitzer May Have Spent $80,000 on Hookers; Update: Resignation Expected Wednesday

This just gets better by the minute.

A person familiar with the investigation told The Associated Press that the probe began with a referral from banks to an Internal Revenue Service office on Long Island about suspicious transactions involving accounts ultimately traced to Spitzer. The IRS studied the records and then referred the case to federal prosecutors in October. It was then assigned to the public corruption unit of the federal prosecutor's office in Manhattan.

The precise details of what set off alarm bells for federal authorities are still unclear.

But authorities believe Spitzer may have spent tens of thousands of dollars, apparently transferring only personal funds — not campaign contributions or state taxpayer dollars — between accounts to pay for the prostitute service, according to a law enforcement official who spoke on condition of anonymity.

Another official said the amount could be as much as $80,000.

A half-million or so times every year, banks alert the federal government that a suspicious transaction has occurred. Although the public sometimes thinks it requires a transfer of $10,000 or more to attract attention, banks can label transactions suspicious even if they involve far less money, said Walter Pagano, a former IRS agent who has testified in court on white-collar crime.

Spitzer might have tried to keep his transfers below the $10,000 threshold, underestimating the scrutiny that banks give to lesser amounts.

Did I mention Spitzer is a Democrat?

The Blotter also reports the big pimp daddy for the escort service has IRS credentials.

The alleged leader of the prostitution ring that tripped up Eliot Spitzer is credentialed to represent clients before the Internal Revenue Service, an IRS spokesman confirmed Tuesday.

According to prosecutors, Mark "Michael" Brener, 62, had "ultimate decision-making authority" over the Emperor’s Club VIP prostitution service. They say he recruited "prospective prostitutes," handled the group’s marketing, and settled disputes between prostitutes and their clients.

He is also a licensed "enrolled agent" of the IRS, spokesman Rob Marvin confirmed. That means Brener was allowed to prepare and submit other people's taxes, represent others in tax court and in negotiations with the IRS, and receive information directly from the IRS on behalf of others.

Remarkably, some idiots surrounding Spitzer are delusional enough to think they can ride this out.

"If the public is fine, he'll stay," said a Democrat who spoke on condition of anonymity because of the sensitivity of the subject.

Uh, no, the public isn't fine, though it appears our long national nightmare may last only another day.

Disgraced love guv Eliot Spitzer may be sticking around one more day.

Albany sources tell The Post that it doesn't appear the hooker-happy first-term governor will step down today.

Latest Post online poll has 88% telling him to beat it. I'm surprised it's that low.

Hot Air links. Thanks!

Update: Now we have another Blotter account from a 22-year-old escort relating her story.

A 22-year-old escort found on another call-girl Web site told ABC News in a phone interview that Gov. Eliot Spitzer had been one of her customers two years ago when he was New York attorney general and that he was a nice guy who tipped well.

"He didn't do anything that wasn't clean," she said, adding that she knew who he was because he had made calls from the attorney general's office in Brooklyn, N.Y.

Lost in all the developments is Spitzer's friend George Fox, who reportedly isn't too happy his name was used as an alias.

George Fox, a friend and campaign contributor of New York Gov. Eliot Spitzer, said on Tuesday he was disappointed and distressed by a report that said Spitzer used his name as an alias when contacting a prostitution ring.

Fox, a hedge fund investor, said the discovery of his name in the sex scandal engulfing Spitzer "comes as a great surprise and disappointment."

"There is absolutely no connection between Mr. Fox and the governor's alleged activity beyond the unauthorized use of his name," said a statement issued by a public relations firm representing Fox.

"Mr. Fox considers Gov. Spitzer a close friend and is distressed by the news that has emerged," he said.

Fox, whose firm Titan Advisors invests $3.5 billion in some of the world's most prominent hedge funds, and Spitzer have been friends for two decades and Fox donated to Spitzer's 2006 campaign for governor.

Update II: Word from WCBS in New York is he'll resign tomorrow.

Gov. Eliot Spitzer is set to resign Wednesday, sources tell CBS 2 HD political reporter Marcia Kramer, but insiders say he's going to use the resignation as a bargaining chip to cut a deal with federal prosecutors and he won't step down until that happens. The talks have been going on since Tuesday morning.

The governor's fate rests in the hands of two people: U.S. Attorney Michael Garcia and Michele Hirshman, the head of his legal defense team. The deal they cut will determine Spitzer's future.

Criminal law experts say Spitzer will definitely have to resign the governorship and that what's involved in the deal is key.

So what's the best that could happen to him?

"No charges, absolute resignation, and contrition. I think the worst that could happen is a felony plea on one of a number of charges that they could lodge against him," said noted criminal attorney Ronald Fischetti, who has often had to negotiate with feds on behalf of clients.

Still, Fischetti said Spitzer stands no hope of ever regaining political respect again.

"I think his career politically is at an end," he said.

No kidding.

More at Hot Air.

Some advice for Spitzer from the always classy Erica Jong.

Update III: Hmm.

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