CEO Arrested for Pimping and Conspiracy

SACRAMENTO, Calif.—As the result of a criminal complaint filed in California Superior Court on September 26, CEO Carl Ferrer as well as Backpage shareholders Michael Lacey and James Larkin have been charged with nine counts of pimping, attempted pimping, pimping minors and criminal conspiracy for having accepted ads for escort services on their website, as well as two other websites that were allegedly created on Ferrer's orders, and, which carried ads similar to those found in Backpage's adult section.

"Raking in millions of dollars from the trafficking and exploitation of vulnerable victims is outrageous, despicable and illegal," said Attorney General Harris in a press release announcing the criminal charges. "Backpage and its executives purposefully and unlawfully designed Backpage to be the world’s top online brothel. Thank you to the California Department of Justice Special Agents, investigators, attorneys, and our partners in law enforcement who have worked tirelessly to bring the operators of this online brothel to justice and protect thousands of victims of trafficking."

In the complaint, the three defendants allegedly allowed the posting of ads offering the sexual services of five minor females under 16 years of age (aka "pimping"), though one of them garnered Ferrer an "attempted pimping" charge, for reasons which the complaint doesn't make clear. The trio are also charged with three counts of pimping adult women under two different California Penal Code sections, and one count of conspiracy, listing 17 "overt acts" including accepting ads on the Backpage website, failure to screen those ads for offering illegal services, creating the two additional websites to post identical ads, arranging for online bill paying (which in four of the overt acts were payments for the services of minors) and one of "accepting at least $2,000,000.00 per month in payments from people posting adult section advertisements in California."

However, according to A.G. Harris's statement, "Backpage’s internal revenue reports show that from January 2013 to March 2015, 99 percent of Backpage’s worldwide income was directly attributable to the 'adult' section. During this 29-month period, Backpage’s self-reporting demonstrates that gross monthly income from California rose to $2.5 million per month, with over $51 million in revenue derived from California in that period."

Ferrer was arrested yesterday in Houston after his flight from Amsterdam landed at the airport there, and in addition to the charges leveled by California, Texas is also charging Ferrer with money laundering, though the details of that are not currently available.

"Making money off the backs of innocent human beings by allowing them to be exploited for modern-day slavery is not acceptable in Texas," Attorney General Ken Paxton said in a statement.

On top of all that, Sen. Claire McCaskill (D-MO) told the St. Louis Post-Dispatch that despite the indictments, the congressional investigation into Backpage's practices will continue unabated.

"For the past 18 months, we have led a bipartisan investigation into the scourge of online sex trafficking," said McCaskill and fellow Sen. Rob Portman (D-OH) in a statement. "That investigation led us directly to Backpage, an online marketplace that has been involved in hundreds of reported cases of sex trafficking, including child exploitation. We certainly wish that Backpage had willingly cooperated with our investigation. Despite its refusal to do so, our investigation was the first to uncover Backpage’s practice of editing ads in manner that serves to conceal evidence of criminality. As law enforcement officials in Texas and California do their job, we will continue to press forward and complete our longstanding investigation."

Backpage has been fighting that Senate investigation for several months, though most recently, a federal judge in the District of Columbia issued an order enforcing the investigative committee's subpoenas for certain Backpage records which Ferrer had refused to produce, claiming attorney/client privilege.

Pictured: Carl Ferrer.