The CEO of Backpage.com the online, classified portal and two of the controlling shareholders of the company have been charged this week with pimping, which is a felony in California.
Authorities allege the online site operators were running what they called an “online brothel.”
Carl Ferrer, the Backpage CEO, operates the site from Amsterdam and Dallas. He was arrested upon arriving on a flight in Houston from the Netherlands.
Ken Paxton the Attorney General of Texas and Kamala Harris the Attorney General of California said that a joint investigation of three years revealed that victims of adult and child sex trafficking had been forced into prostitution via escort ads which appeared on the Backstage web site.
They alleged as well that Ferrer along with shareholders James Larkin and Michael Lacey earned millions from illegal sex trade.
The CEO is facing charges of pimping, pimping a minor and of conspiracy of committing pimping. Larkin and Lacey remained free as of Thursday night. It was not known when Ferrer was schedule to make an appearance in court.
Undercover California law enforcement officers posted online escort ads that led to johns who had used Backpage.
Authorities interviewed over half dozen victims of sex trafficking who said they had paid Backpage to put ads on that site that promoted prostitution.
The online site, which is similar to that of Craigslist, has come under heavy pressure from federal lawmakers as well as law enforcement for a number of years to put an end to ads for adult services.
Craigslist since 2010 has not posted erotic and adult service advertisements.
Backpage was at the center of hearings in the U.S. Senate into its ads. In September, the Supreme Court declined to block a subpoena from the Senate seeking information on how ads are screened by Backpage.
As well as its ads for adult services, Backpage publishes ads from people that rent apartments, sell cars or offer jobs.
The company’s reports to the internal revenue service show that between January 2013 and March 2015 close to 99% of the worldwide income at Backpage came from the adult section of the site.
The company took in more than $51 million in revenue during that time in just California.
In addition, during that same period, internal documents at Backpage showed that its gross income monthly for California was over $2.5 million each month.
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