17:08, April 13 60 0 abajournal.com

2018-04-13 17:08:11
Backpage CEO pleads guilty to conspiracy to facilitate prostitution and money laundering

A co-founder and CEO of Backpage.com has pleaded guilty to a federal charge of conspiracy to facilitate prostitution and money laundering, the Justice Department announced Thursday.

The executive, 57-year-old Carl Ferrer, was not named as a defendant in the indictment unsealed on Monday that charged Backpage co-founders Michael Lacey and Jim Larkin with money laundering and knowingly facilitating prostitution through the website. This indictment did refer to an individual called “C.F.” Five others were also indicted.

Ferrer also pleaded guilty to money laundering in Texas and California state courts, and agreed to cooperate with prosecutors, report the New York Times and the Washington Post. He had pleaded guilty to the federal charge on April 5, then pleaded guilty to the state charges the following week.

In addition, Backpage.com LLC and several other Backpage-related corporate entities entered guilty pleas to federal charges of conspiracy to engage in money laundering, according to the Justice Department announcement. Backpage is “the internet’s leading forum for prostitution ads,” according to the Justice Department.

State prosecutors agreed to seek no more than five years in prison, according to the plea agreements. Any federal sentence would run concurrently with the state sentences, according to the Associated Press.

In the factual basis to the plea agreement, Ferrer admitted he was aware that the great majority of Backpage ads for escort and adult services were in fact prostitution ads. He also acknowledged helping create a process that removed pictures and terms that implied ads were for prostitution, and that the removal was part of the corporate culture of concealing the true nature of the ads.

He also admitted working with conspirators to fool credit card companies that refused to do business with Backpage. He admitted working with others to route payments through what appeared to be unconnected entities and to use cryptocurrency-processing companies for payments.