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Backpage creators indicted on prostitution and money laundering charges

The Justice Department announced Monday that seven people associated with Backpage.com, a classified ads website that...

Posted: Apr 10, 2018 8:12 AM
Updated: Apr 10, 2018 8:12 AM

The Justice Department announced Monday that seven people associated with Backpage.com, a classified ads website that has long been criticized for failing to crack down on sex trafficking on its platform, have been indicted for facilitating prostitution, conspiracy and money laundering-related charges.

The department announced the news Monday afternoon after a federal judge in Arizona unsealed a 93-count indictment against Backpage creators Michael Lacey and James Larkin, and five others.

According to the indictment, Backpage earned over $500 million dollars in prostitution-related revenue from the site and illegally routed the proceeds through unrelated entities.

"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," Attorney General Jeff Sessions said in a statement. "But this illegality stops right now. Last Friday, the Department of Justice seized Backpage, and it can no longer be used by criminals to promote and facilitate human trafficking."

The website was seized on Friday and a banner appeared saying: "Backpage.com and affiliated websites have been seized as part of an enforcement action" by the FBI, US Postal Inspection Service and the IRS Criminal Investigation Division.

Lawmakers on Capitol Hill and advocacy groups have long called for an investigation into Backpage.com for allegedly facilitating prostitution and sex trafficking.

The lawsuit represents a major takedown of a "gigantic marketplace of online prostitution" by directly targeting those who facilitate the crime, a Justice Department official said.

The individuals are not being directly charged with commercial sex exploitation, but Backpage's involvement in facilitating prostitution was "no mistake" the official said, adding that the site turned a "blind eye" to sex trafficking that resulted from ads on the web pages.

"The Backpage defendants have admitted -- in internal company documents and during private meetings -- that they know the overwhelming majority of the website's ads involve prostitution," prosecutors allege in the indictment. "Many of the ads published on Backpage depicted children who were victims of sex trafficking. Once again, although Backpage has sought to create the perception that it diligently attempts to prevent the publication of such ads, the reality is that Backpage has allowed such ads to be published while declining -- for financial reasons -- to take necessary steps to address the problem."

Law enforcement officials said the case was brought in Arizona because Backpage was founded there, and that's where its servers and banking accounts exist.

A two-year Senate investigation into online sex trafficking found that found that Backpage.com knowingly aided criminal sex trafficking of women and young girls, simply scrubbing terms from ads such as "Lolita," "teenage," "rape," "Amber Alert," and publishing them on its site. After the investigation was published in January 2017, Backpage.com shut down its adult ads section.

The company has been targeted with several lawsuits over the years but has been largely protected by Section 230 of the 1996 Communications Decency Act, a legal protection that gives a broad layer of immunity to online companies from being held liable for user-generated content. Companies are supposed to act in good faith to protect users but critics argue it can be used as a shield. The law, however, does not, protect sites from federal liability against criminal law, like child-pornography laws.

Last month, however, the Senate approved bipartisan legislation called the Stop Enabling Sex Traffickers Act. The legislation would create an exception to Section 230, which would pave the way for victims of sex trafficking to hold websites accountable for facilitating abuse.

Two days after the Senate approval, Backpage competitor Craigslist removed its personal ads section.

CNN Money: Craigslist shuts down its personals section

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