Backpage.com, CEO Plead Guilty to Charges

SACRAMENTO, Calif.—The chief executive of a website that authorities have dubbed an “online brothel” pleaded guilty Thursday to state and federal charges including conspiracy and money laundering. He also agreed to testify in prosecutions against others at Backpage.com, authorities said.

Authorities allege the site was often used to traffic underage victims, while company officials said they tried to scrub the website 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

said the company pleaded guilty to human trafficking. And a federal judge in Phoenix unsealed an April 5 plea deal revealing that Mr. Ferrer pleaded guilty to conspiracy and Backpage pleaded guilty to money-laundering conspiracy.

“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.”

Under his plea agreement, Mr. 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 past week against the company founded by the former owners of the Village Voice in New York City,

Michael Lacey,

69 years old, and

James Larkin,

68.

The company founders were among Backpage officials indicted by a federal grand jury in Arizona. Attorneys for the company and Messrs. Ferrer, Lacey and Larkin didn’t respond to multiple requests for comment from the Associated Press.

The U.S. Justice Department has seized and shut down the website, and Mr. Ferrer’s federal plea deal requires him to help the government seize all of the company’s assets.

Mr. Ferrer could face up to five years in prison and a $250,000 fine in the federal case in Arizona, while Backpage 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 Mr. Ferrer would face would run concurrent with his five-year terms in California and Texas.

Messrs. Lacey and Larkin remain jailed in Arizona while they await hearings on whether they should be released after pleading not guilty to federal charges alleging they helped publish ads for sexual services.

Messrs. Lacey and Larkin also earlier pleaded not guilty to the California charges after Sacramento County Superior Court Judge

Larry Brown

last year allowed the state to continue with money-laundering charges. Prosecutors allege 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 Judge Brown threw out pimping conspiracy and other state charges against Backpage’s operators. The judge 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.

—Copyright 2018 the Associated Press

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