It was all over so fast, like a winter storm that either sweeps up from the south to bite you in the bum or blows off the Great Lakes to smack you in the face. This time, a pile of snow dumped on Eliot Spitzer, Governor of New York and the bane of Wall Street. On March 10th the man who built his career cleaning up the financial services industry got nailed for being a client of an international prostitution ring; a week later, he was gone.  Interestingly, there’s a technology angle to this story.

For years, banks have been required to put in place surveillance systems to combat money laundering and block funds to undesirable recipients. 9/11 and the introduction of the USA Patriot Act simply raised the bar on Suspicious Activity Reporting. Sophisticated algorithms match names, addresses and aliases to generate more than 1 million SARs a year.  It was during an IRS inquiry that a few banks’ systems, including HSBC’s, detected Spitzer’s payments to QAT International, whose business involved foreign accounts, shell companies and links to pornographic web sites.

Like many businesses, QAT International had jumped on the convenience/anytime, anywhere bandwagon by enabling its customers to make appointments by phone or online and pay for services with cash, credit card, wire transfers or money orders. According to one report, our Eliot paid QAT $80,000 over the last decade.

As the saying goes: what goes around comes around. Cheers were heard on the floor of the New York Stock Exchange when the news broke. But the best was when Ken Langone, Home Depot founder and former NYSE director, was quoted in the press as saying: “We all have our own private hells. I hope his private hell is hotter than anyone else’s.”

Filed under: Technology