Backpage.com, CEO plead guilty to state, U.S. charges

Posted April 14, 2018

The U.S. Senate also recently approved the Stop Enabling Sex Traffickers Act (SESTA), which would remove a legal loophole that shields websites that knowingly take part in human sex trafficking from legal liability.

The plea deal also included admissions from Ferrer that a large number of the site's ads were for sex services and that he schemed with others to launder proceeds from the ads after credit card companies and banks wouldn't do business with them.

The CEO, in a federal plea agreement unsealed in federal court in Arizona on Thursday, admitted that during the 14 years of the site's existence, "the great majority" of Backpage's allegedly hundreds of millions of dollars in revenue came from placing illegal ads for prostitution.

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While many have lauded the charges as a blow to prostitution and human sex trafficking, many critics have argued that banning the site, which was commonly used to solicit sex, will now force women to sell themselves on the streets.

Ferrer pleaded guilty to one count of conspiracy and three counts of money laundering. The guilty pleas are the latest in a cascade of developments in the last week against the company founded by the former owners of the Village Voice in New York City, Michael Lacey, 69, and James Larkin, 68.

In addition to those pleas, federal prosecutors in Arizona announced Thursday Backpage.com and CEO Carl Ferrer had pleaded guilty to conspiracy charges on April 5. Lacey, Larkin and the others were arrested after the Justice Department seized Backpage.com and all its affiliated websites Friday.

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Ferrer then traveled to Sacramento where he pleaded guilty to money laundering once more and was released on bond. Federal agents raided Backpage's Phoenix offices last week, a 96-count federal indictment followed and new legislation has been proposed that would make it easier for states to go after sex traffickers and the websites that harbor them.

The investigation was a joint effort between Justice, the FBI, the U.S. Postal Inspection Service and the Joint Regional Intelligence Center, along with several U.S. Attorney's offices. He said Ferrer's cooperation in the ongoing investigation into Dallas-based Backpage "could lead to other criminal charges" being filed against the company's associates. He called Ferrer's plea "a game-changer in combatting human trafficking in California, indeed worldwide".

Government officials touted the indictment and seizure of the popular classified ads website as a major step in the fight against sex trafficking.

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The site was the dominant hub for sex workers to advertise their services, and it had come under increasing scrutiny in recent years as the United States government made efforts to crack down on sex trafficking with legislation like the Stop Enabling Sex Trafficking Act (SESTA), which President Trump signed this week.