Coop's Corner

Spitzer: Now I know why I always hated IT.

(Credit: New York State)

I was sure that Henry Blodget's comment on the Eliot Spitzer prostitution scandal would come with a heavy dollop of schadenfreude.

After all, Spitzer as New York Attorney General forced Blodget to eat humble pie en route to an ignominious exodus from the securities industry. But in his new role as tech industry commentator, we're seeing a kinder, gentler side from the one-time Wall Street stock pumper.

On this blog at Silicon Alley Insider, Blodget opted for a "just the facts, ma'am," approach and reposted The New York Times' coverage as well as an excerpt from Spitzer's apology.

Bummer.

No matter. The more interesting angle in this affair is the role IT played in Spitzer's downfall. As my ZDNet compadre Larry Dignan writes, Spitzer's name got flagged during the course of a regular computerized activity report financial institutions now must regularly file.

"...what really snared Spitzer was a money laundering investigation that was flagged by suspicious activity reports (SARs) that banks have to file with the Treasury to surface everything from money laundering to terrorist activity. This network has been around for a while, but its importance escalated following the Sept. 11, 2001 terrorist attacks. According to the FBI's charges the prostitution ring that counted Spitzer as a customer was investigated due to some shady bank accounts, checks and wire transfers with big totals ($39,000, $400,000 and others).

You can also find out more about the Treasury Department's Financial Crimes Enforcement Network, or FinCEN, as it's more commonly known, by clicking on this resource guide on our sister site BNET, which tracks suspicious activity reports and currency transaction reports.