The founders of Backpage.com, which was shut down by the federal government last week, have been charged with knowingly facilitating prostitution-related crimes through the website, as well as money laundering, according to an indictment unsealed in federal court on Monday.
Government officials touted the indictment and seizure of the popular classified ads website as a major step in the fight against sex trafficking.
The 93-count indictment alleges backpage.com earned $500 million in prostitution-related revenues since launching in 2004. The defendants were charged with hiding the sources of those funds through various schemes, including transferring the money in and out of bitcoin.
A federal grand jury in Arizona returned the indictment against seven defendants associated with the site, including Backpage founders Michael Lacey and James Larkin, on March 28, but it wasn’t unsealed until Monday.
Five of the defendants were arrested on Friday: Lacey, Larkin, Joye Vaught, John “Jed” Brunst, and Scott Spear. Lacey and Vaught made their first court appearance in a closed proceeding the day they were arrested, according to the newly unsealed case records. Prosecutors asked to keep Lacey in custody until a detention hearing scheduled for April 11; the judge denied a request by Lacey’s lawyer for an immediate ruling, and he remains in custody. Vaught was released pending trial.
The other three defendants were arraigned on Monday. Larkin is being held until a detention hearing on April 12, while the other two defendants were released pending trial. The status of the remaining two defendants, Dan Hyer and Andrew Padilla, was not immediately clear.
Visitors to backpage.com and backpage.ca, known for personal adult ads, were met on Friday with a message that stated, “backpage.com and affiliated websites have been seized as part of an enforcement action by the Federal Bureau of Investigation, the U.S. Postal Inspection Service, and the Internal Revenue Service Criminal Investigation Division.”
A Justice Department official said the defendants engaged in a “consistent and concerted effort” to host prostitution-related ads. Although the indictment does not charge the defendants with sex trafficking crimes — sex trafficking, which involves the prostitution of children and forced prostitution of adults, is legally distinct from prostitution more generally — the official said the case was part of the government’s larger efforts to combat trafficking.
The most serious of the charges carries a maximum sentence of up to 20 years in prison, the official added.
“For far too long, Backpage.com existed as the dominant marketplace for illicit commercial sex, a place where sex traffickers frequently advertised children and adults alike,” Attorney General Jeff Sessions said in a statement. “But this illegality stops right now.”