Backpage.com CEO pleads guilty, will testify
The CEO of Backpage.com has pleaded guilty to state and federal charges including conspiracy and money laundering, and agreed to testify in ongoing prosecutions against others at the website that authorities have dubbed a lucrative nationwide “online brothel,” authorities said.
“For far too long, Backpage.com existed as the dominant marketplace for illicit commercial sex, a place where sex traffickers frequently advertised children and adults alike,” U.S. Attorney General Jeff Sessions said in a statement. “But this illegality stops right now.”
Backpage brought in a half-billion dollars since it began in 2004, mostly though prominent risque advertising for escorts and massages, among other services, according to federal prosecutors. Authorities allege the site was often used to traffic underage victims, while company officials said they tried to scrub the site of such ads.
CEO Carl Ferrer will serve no more than five years in prison under a California agreement in which he pleaded guilty to one count of conspiracy and three counts of money laundering in California. Also Thursday, Texas Attorney General Ken Paxton announced the company pleaded guilty to human trafficking.
And a federal judge in Phoenix unsealed a plea deal revealing that Ferrer pleaded guilty to conspiracy, and Backpage.com pleaded guilty to money laundering conspiracy.
Under his plea agreement, Ferrer agreed to make the company’s data available to law enforcement as investigations and prosecutions continue. The guilty pleas are the latest in a cascade of developments in the past week against the company founded by the former owners of the Village Voice in New York City, Michael Lacey, 69, and James Larkin, 68.
The company founders were among Backpage officials indicted by a federal grand jury in Arizona. Attorneys for the company and Lacey, Larkin and Ferrer did not respond to telephone and email messages.
The Justice Department also seized and shut down the website, and Ferrer’s federal plea deal requires him to help the government seize all the company’s assets.
Ferrer could face up to five years in prison and a $250,000 fine in the federal case in Arizona. Backpage.com could face a maximum fine of $500,000 for its money laundering conspiracy plea in the Arizona case.
The federal plea deal says any prison sentence Ferrer would face would run concurrent with his five-year terms in Texas and California.
“Human trafficking is modern-day slavery, and it is happening in our own backyard,” California Attorney General Xavier Becerra said in announcing the plea deal. He called Ferrer’s plea “a gamechanger in combatting human trafficking in California, indeed worldwide.”
Lacey was freed from an Arizona jail after posting a $1 million bond. Larkin remains in jail, and has a bail hearing Monday. The men pleaded not guilty to federal charges alleging they helped publish ads for sexual services. Five employees of the site also were arrested and pleaded not guilty.
Lacey and Larkin also earlier pleaded not guilty in California after Sacramento County Superior Court Judge Larry Brown last year allowed the state to continue with money laundering charges.
But Brown threw out pimping conspiracy and other state charges against Backpage’s operators. The judge ruled that the charges are barred by a federal law protecting free speech that grants immunity to websites posting content from others.