Founders of Backpage.com, Michael Lacey and James Larkin, along with Backpage’s Executive Vice President, Chief Financial Officer, Marketing Director, Operations Manager, and Assistant Operations Manager, have been charged with facilitating prostitution and money laundering after Backpage’s servers were seized by federal authorities last Friday. The 93-count indictment by the Department of Justice (DOJ) against Lacey, Larkin and the other five employees did not include Backpage’s current CEO, Carl Ferrer, due to claims that Lacey and other co-owners continued to maintain operational control of the site.
The DOJ claims Backpage knowingly kept ads on their sites advertising prostitution by blocking age-related keywords and deliberately hiding profits from illegal services by advising customers to use cryptocurrency or by transferring funds to foreign bank accounts or seemingly unrelated companies. Among the charges, the indictment lists one count of conspiracy to launder money, and 41 counts of instances Backpage has transferred sums as large as $5 million from one back to another in order to avoid detection. Part of the $500 million in proceeds relating to prostitution Backpage has made since the site was founded in 2004 was also believed to be laundered.
Backpage has argued that they have cooperated with law enforcement in the past and that the use of the site has helped find dozens of victims and offenders, with workers in the sex industry arguing that removing the site takes away the ability to screen clients and protect themselves. However, Attorney General Jeff Sessions, stated that in removing Backpage, authorities have “put an end to the violence, abuse and heartache that has been perpetrated using this site.”
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