Backpage chief pleads guilty, will cooperate in prostitution case

[April 13, 2018]  By Dan Whitcomb

LOS ANGELES (Reuters) - Backpage.com's chief executive has pleaded guilty to state and federal charges stemming from a wide-ranging investigation into the sex ad website, agreeing as part of a deal with prosecutors to shut it down and cooperate in the case.

Carl Ferrer, 57, entered guilty pleas to conspiracy and money laundering charges in both Sacramento County Superior Court and U.S. District Court in Arizona under agreements with state and federal prosecutors that call for him to serve five years in prison.

"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 written statement announcing the pleas. "But this illegality stops right now."

Several people employed by Backpage.com were charged in a 93-count indictment unsealed on Monday that included among the accusations knowingly facilitating prostitution.

Backpage.com and its affiliated websites were seized on Friday by U.S. federal law enforcement authorities and taken off the internet.

As part of his agreements with the U.S. Department of Justice and with prosecutors from California and Texas, Ferrer has agreed to cooperate in the criminal case against Backpage co-founders Michael Lacey and James Larkin.

Prosecutors have accused the website of generating $500 million in prostitution-related revenue since its 2004 start, and of money laundering by routing funds through seemingly unrelated entities, using foreign accounts and converting it into and out of cryptocurrencies.

An image of the current home page of the website backpage.com shows logos of U.S. law enforcement agencies after they seized the sex marketplace site April 6, 2018. backpage.com via REUTERS

Lawmakers and law enforcement officials have long been working to crack down on the website, which was used primarily to sell sex and was the second largest classified ad service in the United States after Craigslist.

Also charged in the indictment were Backpage.com's executive vice president Scott Spear, chief financial officer John “Jed” Brunst, sales and marketing director Dan Hyer, operations manager Andrew Padilla and assistant operations manager Joye Vaught.

(Reporting by Dan Whitcomb)

[© 2018 Thomson Reuters. All rights reserved.]

Copyright 2018 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.