Michael Lacey and James Larkin, Backpage shareholders, also face felony charges of conspiracy to commit pimping.
“Raking in millions of dollars from the trafficking and exploitation of vulnerable victims is outrageous, despicable and illegal,” California Attorney General Kamala D. Harris said in a statement. “Backpage and its executives purposefully and unlawfully designed Backpage to be the world’s top online brothel.
The arrests come after a lengthy joint investigation by the California and Texas attorney general offices, which found that many of the prostitution ads posted to Backpage involved victims of sex trafficking, including children under the age of 18, according to Harris’s office.
Backpage operates like Craigslist, hosting ads for a range of goods and services, but the investigation found that most of the company’s revenue is raised through its “adult services” section. There, prostitution and escort ads offer sex for money using “coded language and nearly nude photos,” according to Harris’s office. Backpage collects fees from those who post the escort ads.
The investigation found that Backpage has expanded operations since 2010, creating sites in “hundreds of cities throughout the world.” Between January 2013 and March 2015, 99 percent of Backpage’s global income was generated from the “adult section,” according to Harris’s office. During that same period, Backpage reported a growing gross monthly income of $2.5 million per month in California, which accounted for $51 million in revenue.
The investigation, conducted by the California Department of Justice, began three years ago after media and law enforcement reports and tips from the National Center for Missing and Exploited Children. Since 2012, NCMEC has reported 2,900 instances of suspected child sex trafficking, aided by Backpage, to California authorities.
According to Harris’s office, Ferrer expanded Backpage’s influence by creating other prostitution-related sites, like EvilEmpire.com and BigCity.com. Ferrer took data from Backpage users and mirrored the content on the two related sites, the investigation found, which allowed the chief executive to “expand Backpage’s share of the online sex advertising market.”
John F. Clark, president and chief executive of NCMEC, praised the California and Texas attorney offices for the investigation and arrest of Ferrer.
“As the leading nonprofit working to end the sexual exploitation of children, NCMEC knows that the primary way children are sold for sex in this country is through the use of online classified advertising websites, such as Backpage.com,” Clark said in a statement. “The criminal action initiated today will lead to new hope for children who are sold for sex online.”