Backpage CEO pleads guilty to prostitution and money laundering charges

Backpage CEO pleads guilty to prostitution and money laundering charges

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.

According to his plea agreement, Ferrer admitted that he had always been aware that the great majority of Backpage's "escort" and "adult" advertisements are, in fact, advertisements for prostitution services, which are not protected by the First Amendment and which are illegal in 49 states and in much of Nevada.

The 93-count indictment by a federal grand jury in the southwestern state of Arizona, where the company was launched in 2004, was unsealed on Monday.

Backpage CEO Carl Ferrer pleaded guilty to the charges in Sacramento County Superior Court. Ferrer also agreed to cooperate in the ongoing California prosecution against the founders who have not pleaded guilty.

Ferrer pleaded guilty to a single count of conspiracy to commit money laundering and three counts of money laundering.

In response, Ferrer admitted that he worked with his co-conspirators to find ways to fool credit card companies into believing that Backpage-associated charges were being incurred on different websites, to route Backpage-related payments and proceeds through bank accounts held in the name of seemingly unconnected entities, and to use cryptocurrency-processing companies for similar purposes. It came three days after Backpage was seized - its homepage now displays a notice that it was seized under an enforcement action by the Federal Bureau of Investigation, U.S. Postal Inspection Service and the Internal Revenue Service.

More news: Arenado one of five ejected in Rockies-Padres brawl

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 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.

The two plea deals, which cover both Ferrer personally and Backpage.com LLC, were unsealed just a day after President Donald Trump enacted a law that targets Backpage and its ilk. He called Ferrer's plea "a game-changer in combatting human trafficking in California, indeed worldwide".

The Dutch-owned company is incorporated in DE, but its principal place of business is in Dallas.

"I'm pleased that Congress has taken additional steps by passing my SESTA legislation to let sex trafficking victims seek justice and allow state and local law enforcement to swiftly prosecute websites that violate federal sex trafficking laws", Portman said.

SESTA aims to halt sex trafficking, particularly of children, by restricting what kind of information can be posted on websites like Backpage, where people often advertise sexual services.

Related Articles