CEO of shuttered sex classifieds site Backpage pleads guilty

Backpage — accused of being the biggest website for prostitution in the world, with its classifieds used to promote paid-for sex with minors and victims of human trafficking — was abruptly shut down by US authorities on April 6.

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.

According to the plea agreement terms the company’s CEO Carl Ferrer, 57, agrees to cooperate in the prosecution of alleged co-conspirators Michael Lacey, 69, and James Larkin, 68.

Although the pair sold their interests in Backpage in 2015, the indictment said they had since “retained significant control over the website,” receiving tens of millions of dollars.

“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,” said Attorney General Jeff Sessions. “But this illegality stops right now.”

In the plea agreement Ferrer — identified in the indictment only by the initials “C.F.” — acknowledged wrongdoing, saying he worked with 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.”

“Such editing did not, of course, change the essential nature of the illegal service being offered in the ad — it was merely intended to create a veneer of deniability for Backpage.”

The terms of the agreement also require Ferrer to assist US authorities to shut the operation down, as well as forfeit to the government corporate assets and other property owned or controlled by Backpage-linked entities.

Ferrer additionally pleaded guilty to state money laundering charges in California as well as Texas, where the company itself pleaded guilty to human trafficking, according to the attorneys general in those states.

The US Congress passed a bill last month that allows victims of sex trafficking to seek justice against website owners who knowingly promote or facilitate the practice.

Supporters hailed the passage of the Stop Enabling Sex Traffickers Act (SESTA) as a major victory.

But the measure is not without its critics — some say it would undermine a basic underpinning of the internet which enables websites to host information from third parties without liability.