Cocaine and Hookers for Wall St. Execs, Subsidized by You

By Kenneth Garger 07/22/11


Capitalizing on the Emergency Economic Stabilization Act. Thinkstock

Wonder where the billions in bank-bailout money was used for? No need to worry. It seems that our tax dollars are indeed ttrickling down to support a wide number of small business—particularly small businesses like tony escort services, strip clubs, night-clubs and A-list drug dealers favored by Wall Street's high-rolling brokers and traders.

FBI investigations in thepast have found that many of Wall Street's top firms regularly spent millions of dollars a year on booze, drugs and hookers to entertain important clients and in-house executives. Of course, firms like Goldman Sachs and Lehman Brothers, routinely listed all these T&A expenses as T&E expenses. During their investigation of the mortgage crisis a few years ago, the FBI interviewed a number of powerful madams who testified that their services were hardly a secret on Wall Street. Indeed many of them regularly sent invoices for hundreds of thousands of dollars for traders' sex and drug parties directly to the firms for payment. While the Madam.s testimony, and reams of documents confiscated from top Wall Street houses, could have supported a number of charges against some of Wall St's most well-known big wigs, the Justice Department declined to pursue any further action, overruling the FBI's recommendations.

Having narrowly escaped punishment a few years ago, you may have thought that such decadent behavior would be frowned upon in these recessionary times, even though Wall Street is enjoying it's most profitable years ever. But unfortunately you'd be wrong. Last week, a vice team from the NYPD raided the glamorous headquarters ofHigh Class NY, an impressively profitable prostitution ring favored by high-powered Wall Street big wigs who regularly dropped $10,000 or more a night to procure hookers, cocaine and other readily available narcotics supplied by the escort service. According to a Reuters report report, and 17 people were indicted on 144 counts.

Brooklyn DA Charles Hynes said the ring raked in more than $7 million of financiers' cash over its three years in the sex and drug trade. Coincidentally it's coming up to three years since the Emergency Economic Stabilization Act of 2008 channeled billions to Wall Street, ensuring that many bankers would have no reason to curb their wildest excesses, despite the economic crisis rolling over the rest of us. 

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Ken Garger is a reporter for the New York Post. You can follow him on Twitter.