Carl Allen Ferrer, the CEO and one of the co-founders of Backpage, a now defunct online classified advertisement site, pled guilty to “conspiracy to commit offence or to defraud United States” in violation of 18 U.S.C. § 371. In his plea agreement, he acknowledged that the majority of revenue for the site came from illegal advertisements and that Backpage used bank accounts for shell companies and cryptocurrency processing companies (i.e., CoinBase, Crypto Capital, GoCoin, Kraken, and Paxful) to conceal the source of its revenue. He also acknowledged in his plea agreement that he conspired to sanitize advertisements by removing words and photos that were indicative of prostitution. As part of the plea deal, Ferrer is required to forfeit the company’s assets and property, take all the steps in his power to permanently shut down Backpage, and testify that Backpage engaged in money laundering and facilitated prostitution. At the time of writing, he has not yet been sentenced.
In addition to USD bank accounts, cryptocurrencies, and other financial instruments, property, including domain names, servers, real property, intellectual property, and other corporate assets and property, was seized.
18 U.S.C. § 981(a)(1)(C)
United States District Court for the District of Arizona
The defendant entered into a plea agreement. At the time of writing, the defendant has not been sentenced.
The defendant was the CEO and co-founder of Backpage.
18 U.S.C. § 371
Conspiracy to commit offense or to defraud United States
United States District Court for the District of Arizona
This case involves the prosecution of an Internet intermediary, Backpage, that was involved in the commission of serious crimes. Particularly, Backpage facilitated crimes such as money laundering and the facilitation of prostitution.
In addition to the defendant, in a separate case, a “sales and marketing director” of Backpage, D.H., also pled guilty to conspiracy to facilitate prostitution in a scheme that was designed to provide free advertisements to sex workers in order to draw them away from Backpage’s competitors. The trials of another six persons affiliated with Backpage (M.L, J.L. S.S., J.B., A.P., and J.V), which include the other two co-founders of Backpage (M.L and J.L.), were postponed until 2021.