Backpage CEO pleads guilty to conspiracy, money laundering charges

14 April, 2018, 20:15 | Author: Chad Mckenzie
  • Sex website CEO pleads guilty in Sacramento to money laundering in Backpage case | The Sacramento Bee

Online classifieds site Backpage.com made $500 million from displaying prostitution advertisements, prosecutors said Monday.

Last week, Backpage began displaying a message saying the federal government had seized the website.

Backpage.com co-founder Michael Lacey was arrested April 6 and accused of facilitating prostitution by running ads for sexual services and laundering the revenues.

"Scott says the shutdown of these sites could impact police investigations".

As the largest online sex trafficking marketplace in the world, Backpage facilitated the sex trafficking of innocent women and children through sites it ran for 943 locations in 97 countries and 17 languages. The bill would also enable state and local authorities to prosecute websites that break federal sex trafficking laws.

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In his plea agreement, Carl Ferrer, 57, admitted that he had always been aware that the great majority of Backpage's "escort" and "adult" advertisements were for prostitution services, the department said in a statement. "But this illegality stops right now".

From the Texas Attorney General's Office.

The indictment disputed the site's claims that it barred ads offering illegal services and patrolled ads with computer filters and human moderators to weed out prostitution. For example, he worked with his co-conspirators to create "moderation" processes through which Backpage would remove terms and pictures that were particularly indicative of prostitution and then publish a revised version of the ad. Backpage.com allegedly did so thorough escort ads on its website.

The CEO of the company, Carl Ferrer is also pleading guilty to money laundering charges, which will result in up to five years in prison.

He also says he conspired with others at Backpage.com to launder the proceeds from such ads after credit card companies and banks refused to do business with the site.

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Last year, Lacey, Larkin, and website's chief executive, Carl Ferrer, were acquitted of pimping conspiracy charges by a judge in California, who ruled that the site was protected under laws for sites publishing content by third parties.

The plea agreement provides that, if Ferrer fails to comply with either of these requirements, the plea agreement shall be null and void and the United States may bring additional charges against Ferrer. Ferrer's name did not appear in that indictment.

The seven defendants charged in the 93-count indictment were all arrested on Friday, April 6.

The conviction in the Texas criminal court comes just days after the Department of Justice seized the website and indicted founders Michael Lacey, 69, and James Larkin, 68. Vaught was released pending trial.

But his attorney, Paul Cambria, told Reuters following the proceedings that US District Judge Bridget Bade had agreed to release him on $1 million bond, with home monitoring, if financial papers were in order.

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Lacey is scheduled for a detention hearing Wednesday in federal court in Arizona, followed by Larkin on Thursday.

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