Legal News

Manhattan District Attorney?s Private Bank Accounts Publicized

By Amir Efrati

The Manhattan DA’s office spends a lot of its time going through other people’s bank records in order to put together money-laundering and other financial prosecutions.

They’ve gotten so good at it, that since 2007, the office, now led by Cy Vance (pictured, left), has obtained $450 million worth of pre-indictment settlements, mainly from big corporations looking to avoid criminal charges. To see a recent WSJ profile of Vance and details of why it is putting some fright into financial institutions, click here.

But the tables were turned last fall when New York City began an audit of a handful of the office’s bank accounts that weren’t overseen by the city and were used to hold a portion of the proceeds of those big settlements.

Today the city announced the results of the audit. (Click here to read it.) While it didn’t find any misuse of funds by the DA’s office, it finally answered a burning question: how much did the DA’s office keep for itself?

The answer: As of the end of last year, the office held $86 million in 58 different accounts, the audit found.

The DA money helps fund its investigations and makes up for a budget shortfall, according to Erin Duggan, the DA’s spokeswoman. Duggan said the overall annual budget for the office is about $100 million but the city and state only provide $75 million to $80 million.

Former prosecutors at the DA’s office told the Law Blog that some of the money from those accounts also were used for bonuses and raises, including during past recessions.

The audit stems from an alleged dispute last fall between Vance’s predecessor, Robert Morgenthau (pictured, right), and New York City Mayor Michael Bloomberg, over how the money collected from the DA’s financial settlements was being doled out to city and state governments. The dispute was well chronicled in the NYT here and here.

Today the DA’s office agreed to register the accounts with the city and said spending would be accounted for more extensively in the future.

Full post as published by Law Blog - WSJ.com on March 24, 2010 (boomark / email).