Backpage.com CEO pleads guilty to conspiracy and money laundering – Will testify against others and serve no more than five years in prison

FILE -- In this Jan. 10, 2017 file photo Backpage.com CEO Carl Ferrer appears before the Senate Homeland Security and Governmental Affairs Permanent subcommittee on Investigations looking into Backpage.com. Ferrer will serve no more than five years in state prison under a plea agreement announced Thursday, April 12, 2018. (AP Photo/Cliff Owen, file)

By DON THOMPSON,  Associated Press  SACRAMENTO, Calif. (AP) 04/13 — The chief executive of Backpage.com 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 and some goods for sale, 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.

Chief Executive Officer 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 an April 5 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 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.

FILE — In this Jan. 10, 2017 file photo, Backpage.com CEO Carl Ferrer leaves the Senate Homeland Security and Governmental Affairs subcommittee hearing on Capitol Hill in Washington. Ferrer will serve no more than five years in state prison under a plea agreement announced Thursday, April 12, 2018. (AP Photo/Cliff Owen, file)

 

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 multiple telephone and email messages from The Associated Press.

The U.S. 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, while 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 5-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 a statement announcing the plea deal. He called Ferrer’s plea “a game-changer in combatting human trafficking in California, indeed worldwide.”

Larkin and Lacey remain jailed in Arizona while awaiting hearings on whether they should be released after pleading 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, but Lacey and Larkin are the only ones in jail.

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. The state attorney general’s office, which is prosecuting the case, alleges that Backpage’s operators illegally funneled nearly $45 million through multiple companies and created websites to get around banks that refused to process their transactions.

But Brown threw out pimping conspiracy and other state charges against Backpage’s operators. Brown ruled that the charges are barred by a federal law protecting free speech that grants immunity to websites posting content from others.

President Donald Trump this week signed a law making it easier to prosecute website operators in the future.

Texas state agents raided the Dallas headquarters of Backpage and arrested Ferrer on a California warrant after he arrived at Houston’s Bush Intercontinental Airport on a flight from Amsterdam on Oct. 6, 2016. The Dutch-owned company is incorporated in Delaware, but its principal place of business is in Dallas.

Paxon called Thursday’s pleas “a significant victory in the fight against human trafficking in Texas and around the world.”

___

Associated Press writers Terry Wallace in Dallas and Jacques Billeaud in Phoenix contributed to this story.

https://www.apnews.com/b21197e3d1c44d6184caac0eafc0fa11/Backpage.com-CEO-pleads-guilty,-will-testify-against-others

Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Posted in: Arrests, Conspiracy, Convictions, Courts & Trials, Crime & Criminals, Dept. of Justice, Guilty Pleas, Human Trafficking, Illegal Activities, Investigations, Money Laundering/Tax Evasion, Plea Agreements, Prostitution, Sentencing, State Attorneys, Victims of Crime

Leave a Reply

Your email address will not be published. Required fields are marked *

Terms of Use for Posting Comments

Terms of Use

This site (the “Site”) is operated and maintained by Law Enforcement Education Foundation, Corporation (“Company”). Throughout the Site, the terms “we”, “us” and “our” refer to Company.  The words “user,” “you” and “your” as used herein refer to you.

Please read these terms and conditions of use (“Terms of Use”) carefully before contributing content. If you do not agree to these Terms of Use, please do not contribute content. Your use of the Site is subject to the Terms and Conditions found here .

By contributing content to the Site, you represent and warrant that you are at least eighteen (18) years old and that you have read and understand these Terms of Use and any amendments thereto and agree to be bound by them. If you are not at least eighteen (18) years old or you do not agree and accept these Terms of Use, you are prohibited from contributing content.

From time to time, we may permit users to submit content to the Site.  You hereby acknowledge and agree that by submitting remarks, comments, suggestions, ideas, graphics, feedback, edits, concepts, comments, photographs, illustrations and other materials (other than personal information and/or registration information) through the Site (individually and collectively, “Submissions”), you (i) grant us a nonexclusive, royalty-free, perpetual, transferable, irrevocable and fully sub-licensable right to use, reproduce, modify, adapt, translate, distribute, publish, create derivative works from and publicly display and perform such Submissions throughout the world in any media, now known or hereafter created, without attribution to you; (ii) grant us the right to pursue at law any person or entity that violates your and/or our rights in your Submissions; and (iii) forever waive any and all of your rights, including but not limited to moral rights, if any, in and to your Submissions, including, without limitation, any all rights or requirements of attribution or identification of you as the author of the Submission or any derivative thereof.  We reserve the right to remove any of your Submissions from the Site, in whole or in part, without notice to you, for any reason or no reason.

Submissions are made voluntarily. Any submissions which include personally identifiable information are subject to our Privacy Policy found here .  You may not upload or otherwise publish content on the Site that (i) is confidential to you or any third party; (ii) is untrue, inaccurate, false or other than an original work of your authorship; (iii) that relates to or impersonates any other person; (iv) violates the copyright, trademark, patent or other intellectual property rights of any person or entity; (v) contains any content, personally identifiable information or other information, or materials of any kind that relate or refer to any other person or entity other than the provider of the products, goods or services to which the Submission relates; or (vi) violates any law, or in any manner infringes or interferes with the rights of others, including but not limited to the use of names, information, or materials that (A) libel, defame, or invade the privacy of any third party, (B) are obscene or pornographic, (C) are harmful, threatening, offensive, abusive, harassing, vulgar, false or inaccurate, racially, sexually, ethnically or are otherwise objectionable or otherwise contrary to the laws of any place where such Submissions may be accessed; (D) constitute personal attacks on other individuals; (E) promote criminal, immoral or illegal activity; (F) promote or advertise any person, product or service or solicit funds; or (G) are deemed confidential by any contract or policy.

You are solely responsible for any Submissions you make and their accuracy. We take no responsibility and assume no liability for any Submissions posted by you or any third party.

Unless approved by us in writing in advance, you agree not to: (i) provide or create a link to the Site; or (ii) create any frames at any other sites pertaining to any of the content located on the Site.

We reserve the right, in our discretion, to update, change or replace any part of these Terms of Use for Posting Comments by posting updates and/or changes to our Site.  It is your responsibility to check this page periodically for changes.  Your continued use of, and/or access to the Site, following the posting of any changes to these Terms of Use for Posting Comments, constitutes your acceptance of those changes.