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Backpage CEO pleads guilty to conspiracy, money laundering charges

13 April 2018

As part of the plea agreement, the site also plead guilty to federal money laundering charges in Arizona, while Ferrer plead guilty to a federal conspiracy charge. Authorities said advertising related to those services was "extremely lucrative".

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 site allowed users to post ads for "escorts" and investigators say numerous ads are actually for underage girls.

President Donald Trump this week signed a law making it easier to prosecute website operators in the future. He also agreed to co-operate in the ongoing California prosecution of founders Michael Lacey, and James Larkin. "But this illegality stops right now". 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.

The indictment, unsealed Monday, charges that personal ads on the site allowed prostitution and sex trafficking, netting more than $500 million since the site's creation in 2004.

The 61-page indictment, returned under seal March 28 by a federal grand jury, claimed that "virtually every dollar flowing into Backpage's coffers represents proceeds of illegal activity". Those two have been charged with facilitating prostitution and money laundering. 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. The site also had listings for adult escorts and other sexual services. Prosecutors allege Backpage's operators illegally funneled almost $45 million through multiple companies and created websites to get around banks that refused to process their transactions.

The statement did not state, however, where the pleas were entered or if they were entered in Texas. Ferrer's plea agreement, and the corporate plea agreements, also consent to the forfeiture of certain assets and items of property, including various domain names associated with the Backpage website.

The former CEO is said to now be cooperating in further federal cases against the website's founders, Michael Lacey and James Larkin.

On April 6, Vaught had her initial court appearance before U.S. Magistrate Judge Eileen Willett of the District of Arizona and was released from custody pending trial.

Backpage CEO pleads guilty to conspiracy, money laundering charges