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Backpage Plea to Texas Sex Trafficking Charge Turns On CEO's Admission to Brokering Adult Prostitution

Backpage CEO Carl Ferrer turned over the company and seven other executives in exchange for leniency.

notice from law enforcement on Backpage.comnotice from law enforcement on Backpage.comThe classified ads site Backpage and its leaders now face more than 100 criminal charges between them. Many—including the Department of Justice (DOJ) and the Texas Attorney General's Office—are reporting this as a confirmation that the company encouraged the sexual exploitation of minors. Yet all of the federal charges pending against Backpage executives are for money laundering or facilitating prostitution, not sex trafficking.

The one trafficking charge in all this comes from Texas, where Backpage LLC plead guilty to "knowingly receiving a benefit from participating in a venture" that caused the compelled prostitution of Erika Brewster, then around age 16 or 17. On behalf of Backpage, CEO Carl Ferrer has entered a guilty plea to one count of trafficking in persons and one count of engaging in organized criminal activity (in addition to one count of money laundering on his own behalf).

In a statement, Ferrer said he knew that the "escort" section of Backpage was largely ads for prostitution, which is illegal in 49 states and most of Nevada. But he does "not concede" that Backpage or any other defendant entities "had knowledge that the victim in this case...was underage at the time the Backpage.com advertisements of her were posted."

Ferrer entered the guilty plea nonetheless, he said, because he was "aware that the Defendant Entities are guilty under the law 'regardless of whether the defendant knows the age'" of a victim.

As part of the plea, Texas Assistant Criminal District Attorney Kirsty Melton recommended that Ferrer pay the victim restitution and pay the state a fine of $20,000 per defendant entity, as well as "take all necessary steps to dissolve Backpage.com and related companies." She did not recommend that Ferrer serve any prison time.

Court documents in the cases against Ferrer and Backpage don't reveal any damning new information about the company, nor any new discoveries that allowed authorities to make their case this time—just the shrewd application of existing overbroad laws in combination with political and legal pressure. While seven other Backpage executives or owners are awaiting trial on charges of money laundering and facilitating prostitution, Ferrer took a plea deal, turning on his colleagues and turning over control of Backpage (and all of its subsidiaries, servers, information, and assets) to the government.

In the end, all Backpage has admitted to is allowing a forum for adult sex-related advertising that was not impermeable to minors or those looking to exploit them. And nothing in this particular joint state/federal investigation, the draconian Senate subcommittee investigation into Backpage last year, or the years of federal civil suits and state-level prosecutions of Backpage has revealed more than that.

But this time, Ferrer decided to break from his colleagues and play ball with the state rather than fight. In exchange for the plea deal, he'll provide information on the Travel Act and money-laundering cases against his colleagues, including Backpage co-founders (and longtime newspaper publishers) Michael Lacey and James Larkin.

Money-laundering may sound sinister in itself, but it's one of those charges (like conspiracy) that our nation's cops and courts often abuse. In this case, Backpage originally accepted payments for its adult-section ads (as well as payments for other services on the site, such as preferential placement of ads in other sections) via typical digital payment mediums, including Paypal and all the major credit cards. But thanks to hounding and intimidation by various government entities, Backpage was forced to stop accepting all those payment methods.

Illinois Sheriff Tom Dart intimidated Visa, MasterCard, and American Express into ceasing their relationships with Backpage, in a case that went all the way to a federal appeals court and wound up in a win for Backpage. In the end, the federal court held that Dart's act was unconstitutional.

Meanwhile, the Obama administration's Operation Choke Point encouraged banks to cease business with all sorts of legal businesses, including porn companies, gun and ammunition sellers, and sex-toy shops. Federal pressure and regulations, plus the efforts of folks like Dart, led Backpage to encourage people to use cryptocurrency for payments. The company also created intermediary companies to handle payments, so that the transactions wouldn't raise alarms with risk-paranoid bankers and financial processors.

Ultimately, the money-laundering that Backpage and Ferrer admitted wasn't about shielding assets in offshore tax havens or otherwise hiding the company's profits from government tax collectors. (The subsidiary companies, or "Defendant Entities," were legally registered and paid state and federal taxes.) But without subsidiaries and crypto, Backpage had no way to accept payment for "escort" ads or any of the many legal ads paid for and posted by users.

It's worrying enough that the government essentially criminalized Backpage making money at all. But the charges also imply that merely accepting or encouraging cryptocurrency payments is itself some sort of crime—or at least serves as an element of a crime, should it be found that someone has used your platform to accomplish an illegal transaction.

Photo Credit: notice from law enforcement on Backpage.com

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  • Just Say'n||

    "Meanwhile, the Obama administration's Operation Choke Point encouraged banks to cease business with all sorts of legal businesses, including porn companies, gun and ammunition sellers, and sex-toy shops."

    Just remember, all of these left-wing led boycotts of Indiana over RFRA and companies that do business with gun makers is just a silly culture war fight or something. And besides, they're private businesses. I see nothing wrong with the gulags if they are privately funded and operated.

  • ||

    Just remember, all of these left-wing led boycotts of Indiana over RFRA and companies that do business with gun makers is just a silly culture war fight or something. And besides, they're private businesses. I see nothing wrong with the gulags if they are privately funded and operated.

    Civil libertarianism FTW (lol).

  • Just Say'n||

    If only there had been a senator that tried to end Operation Choke Point. Oh, yeah, Rand Paul did. And he also voted against this legislation. (lol)

  • BestUsedCarSales||

    I'm really curious what she meant by that. It's such a strange side-comment that I'm starting to wonder if I just misunderstood what she meant.

  • BYODB||

    I can't tell with Rand if he's just that savvy or if he's just saying 'no' all the time and our government is so terrible that it happens to be the correct answer 9 out of 10 times. His dad was Dr. No, and I have to think he noticed that his dad didn't really accomplish anything while still being extremely popular in his tiny niche.

  • Just Say'n||

    In the case of Operation Choke Point it wasn't legislation, it was Rand and four other senators working to undue the executive action. So more proactive than merely voting

  • Don't look at me.||

    If they re publishing something, aren't they the press? Don't we have freedom of the press?

  • Diane Reynolds (Paul.)||

    Let this be a warning to FrontPageMag.com. They're in the back door, and now they're coming for you.

  • silver.||

    Back door entries is FrontPageMag.com's specialty. They'll be fine.

  • Elias Fakaname||

    What if they are simultaneously entered through both the back door and the front door?

  • BYODB||

    Schrödinger's Reach Around?

  • StackOfCoins||

    Operation SPITROAST

  • ||

    impermeable to minors

    As if such a thing could possibly exist.

  • Scarecrow Repair & Chippering||

    Ferrar took a plea deal, turning on his colleagues and turning over control of Backpage (and all of its subsidiaries, servers, information, and assets) to the government.

    He folded faster than a center page.

  • Libertymike||

    "Money-laundering may sound sinister, in itself...."

    Yes, to the ears of a slave.

  • Jerryskids||

    So now we start seeing the extent of "economic crimes". All within the state homeland, nothing outside the state homeland, nothing against the state homeland.

  • BYODB||

    Yes, we must always remember that the government setting the parameters of how you conduct business (right down to the minutia of every day operations) isn't really state control of an industry even when they throw you in jail for manufactured crimes.

    Some people actually believe it too, which might be the worst part.

  • Unicorn Abattoir||

    It's worrying enough that the government essentially criminalized Backpage making money at all.

    In his Senate office, Bernie Sanders dreams of the day when no company is allowed to make money.

  • TheZeitgeist||

    Like cocaine, a social broker network for hookers and johns simply too much $$$ to go quietly in the night.

    In the end, Big Whore will not be denied.

  • BYODB||

    So, now the government will go and arrest all these prostitutes so they can no longer do with their bodies as they wish. I'm sure making them unemployed will be a huge improvement....especially if they can collect welfare benefits while whoring themselves. That's what we call a win/win!


    And, of course, it is always assumed that no woman would ever whore herself out for money despite over 4000 years of evidence to the contrary. Women just naturally abhor sex outside of marriage, you see, and exchanging sex for maybe a fancy dinner is just beyond the pale.

  • Eidde||

    McDonald's - peck on the cheek

    Red Lobster - handjob

    Four Seasons- sex on the couch while watching football

  • Eidde||

    I'm so utterly disgusting.

  • BYODB||

    Crude but effective metaphor I think.

    Essentially what this type of thinking relies upon is the notion that women are incapable of enjoying or using sex to their advantage, which is really just a rehash of the Victorian era. The irony, of course, is that these types would abhor the Victoria era for the things they instinctively seem to otherwise agree with.

    Truly baffling. Having defeated social conservatives, Progressives then reveal themselves to be social conservatives.

  • TheZeitgeist||

    The irony, of course, is that these types would abhor the Victoria era for the things they instinctively seem to otherwise agree with.

    It does perfectly explain the celebrate-hijabs fetish currently trendy in such quarters.

  • BYODB||

    Yes, I've heard this line as well in how the hijab is empowering because it averts the male gaze. Nevermind that men forced them upon women since they didn't want other men ogling their property.

    I'm sure your hardcore Progressive would note that Muslim men realized earlier than most that they had to curb the baser instincts of men by...forcing women to do things apparently.

    They aren't positive how to spin this in favor of both Muslim men and white liberal women, but that won't stop them from trying to mash shit together until they end up with modern art.

  • UnrepentantCurmudgeon||

    In much the same way that having defeated progressives, conservatives then reveal themselves to be progressives. It's called "triangulating". Or something

  • VinniUSMC||

    At least you tried.

  • Just Say'n||

    You just suggested that you enjoy watching football while having sex. Think of the implications. Not that there's anything wrong with that

  • Jerryskids||

    It could be lingerie football, not the sort of football with sweaty, muscular young men running and jumping and wrestling around in skin-tight uniforms that showcase every rippling muscle and bulging...bulge. You don't know!

  • ||

    Think of the implications.

    Not that there's anything wrong with that.

  • Eidde||

    I was thinking of the levels of degradation to which the *woman* was subjecting herself.

  • Crusty Juggler||

    My Lawbertarian side is so turned on right now.

  • Crusty Juggler||

  • BestUsedCarSales||

    Even if he's technically not a cuck, that 3rd student is a cuck.

  • Just Say'n||

    I think we can all concur on that point

  • XM||

    Should Backpage and Paul Manafort combine their powers?

  • MSimon||

    BackMan?

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