Spitzer: Why structuring matters more than sex.

March 13, 2008

The news of Eliot Spitzer’s fall from grace as the governor of New York following the exposure of his patronage of a high end prostitution outfit called the Emperor’s Club, is being largely reported on as a ‘sex scandal’. Interestingly enough if you can get beyond the issue of moral disgrace, the judicial core of the charges hinge upon the details of his financial transactions. In addition to possible charges for having violated the Mann Act, which banns the interstate transport of females for ‘immoral purposes’, federal investigators are pursuing Spitzer for having potentially engaged in ‘structured cash transactions’. As reported on in the New York TimesUnder the Bank Secrecy Act, all financial institutions are required to file currency transaction reports with the federal government for any deposit or withdrawal of more than 10,000.” (This is the reason why the blue and white U.S. customs cards ask people to report whether they are carrying in excess of $10,000 in financial instruments into the country.) Structuring’ (IRS Manual, Section 4.26.13.2.1) is the act of breaking up cash transfers over several transactions to avoid being detected and is considered a felony. In short then, it is the govenor’s methods of payment more so than his sexual practices that are of central legal concern. Apparently, however (according to the same NYTimes article quoted above) “If the governor was simply trying to conceal his activities from, say, his wife, it would be considered different from trying to deceive federal authorities.”

For a brief but informative NYTimes radio account of structuring click here, and then on clip featuring Gerald L. Shargel, a criminal defense attorney commenting on the legal issues of the case. For the story of the woman whose services unleashed the storm, see here.

One Response to “Spitzer: Why structuring matters more than sex.”

  1. typewritten Says:

    An interesting document, in this line of analysis, posted at FT Alphaville (a screen shot of the price schedule):
    http://ftalphaville.ft.com/blog/2008/03/10/11474/spitzer-the-trick-what-a-treat/


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