During the course of an investigation into the escort agency, the federal government became aware of Spitzer's involvement with prostitutes due to a wiretap. Following the public disclosure of his actions, Spitzer resigned as Governor effective March 17, The investigation of Spitzer was initiated after North Fork Bank [ 1 ] reported suspicious transactions to the Treasury Department's Financial Crimes Enforcement Network as required by the Bank Secrecy Act , which was enhanced by Patriot Act provisions, enacted to combat terrorist activity such as money laundering.
Federal agents had him under surveillance twice in Governor Spitzer, referred to as "Client 9" in an affidavit filed in US Federal Court , [ 8 ] arranged to meet at the Mayflower Hotel in Washington on February 13, , with a prostitute named "Kristen".
Room at the Mayflower Hotel was booked under the name George Fox, a pseudonym that was allegedly the name of his close friend, a hedge fund investor. When he tried to get his name taken off the wires, the bank refused, saying that the money had already been wired out and that it would be improper to do so in any case.
The IRS Criminal Investigation Division then began a probe, initially fearing that Spitzer was the victim of either extortion or identity theft. The investigation led federal authorities to link the money transfers to the Emperors Club. On March 7, , The New York Times reported that the federal government had arrested four people in connection with an international online prostitution ring run by Emperors Club VIP.
On March 10, the Times reported that Spitzer had been "caught on a federal wiretap arranging to meet with a high-priced prostitute at a Washington hotel". I have acted in a way that violates my obligation to my family and violates my or any sense of right and wrong.
