CEO Pleads Guilty, Will Cooperate With Feds On Money Laundering


The two plea deals, which cover both Ferrer personally and LLC, were unsealed just a day after President Donald Trump enacted a law that targets Backpage and its ilk. He pleaded guilty to one count of conspiracy and three counts of money laundering in California.

The indictment disputed the site's claims that it barred ads offering illegal services and patrolled ads with computer filters and human moderators to weed out prostitution.

In addition to modifying advertisements, Ferrer admitted that he and other Backpage officials duped credit card companies and banks that refused to process the company's payments. He also agreed to cooperate in the ongoing California prosecution of founders Michael Lacey, and James Larkin.

The company founders were among Backpage officials indicted by a federal grand jury in Arizona.

The Women's March organization is pushing back against the recent shutdown of notorious adult services website, arguing that the stoppage limits the options for sex workers looking to meet clients. Attorneys for the company and Lacey, Larkin and Ferrer did not respond to multiple telephone and email messages from The Associated Press.

CEO Carl Ferrer is pictured after his arrest on pimping charges in 2016.

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Also charged were Jim Larkin, co-founder of and a longtime Lacey associate.

But his attorney, Paul Cambria, told Reuters following the proceedings that US District Judge Bridget Bade had agreed to release him on $1 million bond, with home monitoring, if financial papers were in order. But a letter provided to the committee before the hearing said the site and its employees "agree that human trafficking is abhorrent and should be eradicated" and that it "has spent thousands of hours and millions of dollars" working with law enforcement to fight trafficking.

The acknowledgements of wrongdoing came shortly after Ferrer pleaded guilty on Thursday to a state money laundering charges in California and the company pleaded guilty to human trafficking in Texas. Prosecutors allege Backpage's operators illegally funneled almost $45 million through multiple companies and created websites to get around banks that refused to process their transactions.

The three deny the state charges.

The site was the dominant hub for sex workers to advertise their services, and it had come under increasing scrutiny in recent years as the United States government made efforts to crack down on sex trafficking with legislation like the Stop Enabling Sex Trafficking Act (SESTA), which President Trump signed this week. Also Thursday, Texas Attorney General Ken Paxton announced the company pleaded guilty to human trafficking.

State agents raided the Dallas headquarters of Backpage and arrested Ferrer on a California warrant after he arrived at Houston's Bush Intercontinental Airport on a flight from Amsterdam on October 6, 2016.