Atty. Gen. Kamala Harris announced new criminal charges Friday against the operators of classified ad website Backpage.com, accusing them of laundering earnings from escorts as well as pimping children and adult women on their websites.
The charges come two weeks after a Sacramento judge threw out pimping charges against the same three men, ruling that websites such as Backpage.com — which Harris had condemned as the “world’s top online brothel” — are protected from lawsuits when they publish speech posted by other people.
But in the new 40-count criminal complaint, Harris accused the operators of personally creating profiles for thousands of women, including minors, to increase revenue from the illegal sex trade. The profiles appeared on their two other websites, BigCity and EvilEmpire, which were used to draw Web traffic to Backpage’s prostitution business, the complaint said.
The complaint listed 10 victims whose profiles were created without their knowledge. In one case, a woman contacted Backpage to remove her photograph from EvilEmpire, but was told by Backpage staff that the two companies were not affiliated and therefore her picture could not be removed, according to the complaint.
Backpage Chief Executive Carl Ferrer, 55, along with the site’s former owners Michael Lacey, 68, and James Larkin, 67, are charged with more than two dozen counts of money laundering and one count of conspiracy to commit pimping. Ferrer is also charged with 12 counts of pimping, seven of which involve minors. Harris said the charges are based on new evidence.
Lawyers for the men previously pointed to the federal Communications Decency Act, which frees online publishers from liability over user postings and has been repeatedly interpreted to trump state criminal laws. The men argued that Harris was well aware that they were protected because she signed a 2013 letter with other state attorneys general that unsuccessfully lobbied for an amendment to the law that would have allowed for state-level criminal prosecutions.
On Friday, an attorney representing the men said the latest complaint is a “rehash” of the same charges that were thrown out.
“Harris admitted in 2013 that her office cannot bring state-law charges against Backpage, and the Superior Court’s orders earlier this month confirmed this,” attorney James Grant said via email. “She cannot avoid First Amendment protections, federal law, or her obligations to follow the law, although her new complaint is a transparent effort to do exactly that.”
Backpage has long been a target in the crusade against human trafficking. The National Center for Missing and Exploited Children reported about 2,900 cases of suspected child sex trafficking via Backpage to law enforcement agencies in California since 2012, officials said.
The company has contended that it is a host — not a publisher — of content generated by third parties, namely, consenting adults.
In the latest case, the attorney general’s money-laundering charges stem from alleged efforts to hide prostitution-related transactions.
According to the complaint, the men created new companies and classified websites — including Ymas, Postfastr and Truckrjobs – to handle transactions for Backpage customers after credit card companies refused to process payments to the site because of its “overtly sexual content.”
When American Express notified Backpage operators in 2015 that the company would soon stop processing Backpage transactions, Ferrer directed his employees to guide cardholders on how to purchase “credits” through Postfastr, which could later be used on Backpage.
Over the next two months, American Express transactions from Backpage’s female escort section in California dropped from $48,289 to $31,786, while Postfastr.com credits purchased via American Express increased from $7,904 to $16,152, the complaint said.
Between Aug. 1, 2013, and Oct. 31, 2016, Backpage operators received more than $45 million from transactions initially purchased through the website’s escort categories in California, the complaint said.
In a statement, Harris said the three men preyed on and profited from vulnerable victims, including children.
“My office will not turn a blind eye to this criminal behavior simply because the defendants are exploiting and pimping victims on the Internet rather than on a street corner,” she said.
Founded in 2004, Backpage originated in the classified section in the back of alternative newspapers. It also lists apartments, cars and jobs.
When operators were charged the first time, Backpage denied any wrongdoing and accused Harris of pursuing a politically motivated prosecution as she entered the final weeks in her campaign for U.S. Senate. She was elected last month and is scheduled to be sworn in Jan. 3.
Sacramento County Superior Court Judge Michael G. Bowman ruled that the Communications Decency Act of 1996 protects websites such as Backpage.com from lawsuits when they publish speech posted by other people. He said the law “struck a balance in favor of free speech” in keeping Internet service providers protected from liability.
At the time, Harris said she was “extremely disappointed” by the ruling.
“To all those who have been victimized by pimps online and trafficked through Backpage.com, you are not alone and the fight for justice is not over,” she said. “We are exploring all legal options and will continue to advocate for all victims and to aggressively prosecute those who prey on and exploit the vulnerable.”
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