A law enforcement official said Spitzer's high-powered defense team was believed to be negotiating a plea deal with prosecutors over his connection to a high-end prostitution ring, but attorneys would not comment Thursday about the discussions.

"Corruption cases often pose a dilemma for the prosecutor," said Evan Barr, a private practice lawyer who once handled such cases for the same Manhattan U.S. Attorney's Office that is now weighing how to proceed with Spitzer.

"If you charge a public figure under an obscure or rarely used legal theory, the critics will say the prosecution is politically motivated; if you decline to charge under the same circumstances, the critics will say the prosecutor is going easy on the would-be defendant because he or she is a prominent person," Barr said.

The city of Palo Alto on Wednesday lost an 11-year legal battle over whether police officers violated a man's civil rights and now faces the prospect of paying hundreds of thousands of dollars to finally settle the case.

The California Supreme Court turned down the city's request to review and overturn lower court rulings in Schmidlin vs. City of Palo Alto, the civil case in which Michael Schmidlin successfully contended police used excessive force when they arrested him March 29, 1997, on suspicion of public drunkenness.

Unless the city appeals to the U.S. Supreme Court, it could pay $24,000 plus interest to Schmidlin and at least $300,000 in legal fees to his lawyer, Mark Martel. That figure might swell to more than $500,000, said Martel, who will spend the next month or so calculating the exact cost.

City Attorney Gary Baum expressed disappointment when reached for comment Wednesday evening. "We did not feel the elements of excessive force had been met," he said. "Obviously, the (6th District) Court of Appeal and the Supreme Court disagreed with us."

The appeals court in December upheld a 2003 jury verdict against the three police officers Tim Martin, David Trujillo and Burt Milliken accused of excessive force. The officers said they believed Schmidlin was drunk and alleged he "displayed an uncooperative and resistive attitude toward complying" with their demands, according to court

MasterCard International said on Thursday it welcomed a U.S. appeals court's dismissal of an antitrust lawsuit by a group of merchants claiming that the company, Visa USA and three banks had conspired to set fees charged to businesses for credit card sales.

The ruling by the 9th U.S. Circuit Court of Appeals upholds a San Francisco federal judge's 2005 dismissal of the case led by hair salon operator Sheri Kendall and James Maser, who operated a restaurant in Alameda County.

MasterCard General Counsel Noah Hanft said in a statement that the company "welcomed" the appellate ruling on March 7.

"No U.S. court has found interchange to be illegal," he said, referring to the fees charged among card association member banks.

The plaintiffs' attorney, Richard Archer, had no comment on the ruling.

The 9th U.S. Circuit Court of Appeals ruled that the merchants had failed to present facts to support claims of a conspiracy among the credit card companies and Bank of America Corp, Wells Fargo & Co and U.S. Bancorp.

The merchants had accused the card associations of fixing prices on "merchant discount fees," which are transaction fees between merchants and banks, and interchange fees.

The court dismissed the case without leave to amend, which means the merchants cannot refile the case.

In a setback for terror victims, a French court lifted a freeze on Iranian state funds.

Victims of Iranian-sponsored attacks in Israel in 1995 and 1997 are suing Iran for compensation.

While the Paris Court of Appeal this week released the $117 million held in the Natexis Banques Populaire, it did not seek interest and court fees from the plaintiffs, their Paris-based attorney Christoph Martin Radtke told the JTA in a telephone interview.

The court told the attorneys to reapply for the Iranian funds once a decision is made on whether funds in the Iranian Central Bank may be confiscated to pay the damages in a U.S. court decision.

Federal judges in Washington ordered Iran to pay damages and interest of $87.5 million to 12 U.S. citizens injured in the two terrorist attacks in Israel. The U.S. courts determined that Iran was liable for the damages due to its sponsorship of Hamas, which orchestrated the attacks.

Radtke said the French court decided to release the Iranian funds because "the law that protects state accounts does not allow an exception for provisional seizure measures."

In January, Radtke in another Paris court sought the enforcement of the U.S. court judgments. He told JTA he hoped for a decision within a few months.

In an e-mail to the JTA, the plaintfffs' U.S.-based attorney, David Strachman of Rhode Island, said they "are really disappointed with the outcome" in the French court.

A Miami real estate appraiser has pleaded guilty to wire fraud for her involvement in the Southwest Ranches-area fraud scheme in Broward County, the office of the U.S. Attorney for the Southern District of Florida said.

Martine Yanisse Castrillon is one of 15 defendants charged with buying homes through straw buyers at an inflated price, and then getting cash back at the closings. So far, nine defendants have pleaded guilty to various federal charges in the indictment.

Castrillon admitted that she did fraudulent appraisals -- valuing the properties at the amount requested by another defendant, not the true market price -- and forged the name of the certified appraiser who was to review her work.

According to the indictment, co-defendants Lazara Villalba and Henry Quintero-Lopez would offer the owner's full asking price and then inflate the contract purchase price to allow their companies, New World International and D&H Investments of South Florida, to receive a finder's fee, assignment fee or additional funds to allegedly construct improvements to the properties. They would then recruit individuals, who, for a fee, acted as straw buyers of the properties. Villalba and a co-defendant would obtain fraudulent pay stubs, IRS documents, verification of employment and verification of deposit forms; documents would be submitted to cooperating mortgage brokers and the loans were approved to purchase the properties.

Castrillon faces a maximum of 20 years in prison on each of the wire fraud counts and a fine of up to $250,000 on each count. Sentencing is scheduled for May 22.