Backpage.com raided, CEO arrested for sex-trafficking

(ABC NEWS) -- State agents raided the Dallas offices of adult classified ad portal Backpage.com and arrested Chief Executive Officer Carl Ferrer following allegations that adult and child sex-trafficking victims were forced into prostitution through escort ads posted on the site.

Ferrer, 55, was arrested on a California warrant after arriving Thursday in Houston on a flight from Amsterdam. Handcuffed and dressed in an orange jail jumpsuit, he waived extradition during a court hearing Friday morning in Houston.

Authorities also issued arrest warrants for the site's controlling shareholders: Michael Lacey, 68, and James Larkin, 67. It wasn't immediately clear Friday whether the men had been taken into custody.

"Making money off the backs of innocent human beings by allowing them to be exploited for modern-day slavery is not acceptable in Texas," Texas Attorney General Ken Paxton, a Republican, said in a statement.

California Attorney General Kamala Harris said Ferrer was arrested on felony charges of pimping a minor, pimping, and conspiracy to commit pimping. Under California's law, felony pimping is defined as making money off prostitutes or soliciting customers for prostitution.

"Raking in millions of dollars from the trafficking and exploitation of vulnerable victims is outrageous, despicable and illegal," said Harris, a Democrat who is running for the U.S. Senate in next month's election. "Backpage and its executives purposefully and unlawfully designed Backpage to be the world's top online brothel."

Ferrer also has been charged in Texas with a single count of money laundering, according to Texas Attorney General's Office spokeswoman Kayleigh Lovvorn. He was expected to be flown to California on Friday.

Ferrer's attorney, Philip Hilder, said Friday that his client believes the charges are "trumped up."

"He's looking forward to his day in court, where he gets to battle back on these charges," he said.

Lacey and Larkin are former owners of the Village Voice and the Phoenix New Times. It wasn't clear if they had attorneys. An attorney who previously represented the two men, Michael Manning, said he was not representing them in this case.

Backpage.com advertises a wide range of services, but the California arrest warrant alleges that internal business records obtained through a search warrant show that 99 percent its revenue came from its adult services section between January 2013 and March 2015. California officials said the site collects fees from users who use coded language and nearly nude photos to offer sex for money.

Worldwide revenue from sex ads topped $3.1 million in just one week last year, according to a court affidavit. It says Ferrer expanded Backpage.com's share of online sex marketing by creating affiliated sites including EvilEmpire.com and BigCity.com with related content.

Larkin and Lacey each received $10 million bonuses from the website in September 2014, according to the court filing. It says Backpage.com was created in 2004, but since 2014 has been owned by a Netherlands-based company that has Ferrer as its only named partner.

California authorities said the state's three-year investigation found many of the ads include victims of sex trafficking including children under the age of 18.

One of the advertisers, identified only as 15-year-old "E.S.," ''was forced into prostitution at the age of 13 by her pimp," according to an affidavit filed with the complaint. She used other online advertising services until they were shut down, the court filing says, when she turned to Backpage.com.

"I mean really, coming from someone my age, there is too much access, like it's too easy for people to get on it and post an ad," she told California Special Agent Brian Fichtner, according to his affidavit.

California officials said their investigation was prompted in part by the National Center for Missing and Exploited Children, which reported 2,900 instances to California authorities since 2012 when suspected child sex trafficking occurred using Backpage.com.

The criminal complaint includes allegations that five minors, three of them including "E.S." under age 16, paid to post advertisements on Backpage.com.

The charges against Ferrer could bring him nearly 22 years in prison, while Larkin and Lacey face a maximum six years.

A U.S. Senate subcommittee that has investigated the company estimated its annual revenues at more than $150 million.

Backpage.com is a Dutch-owned limited liability corporation incorporated in Delaware, but its principal place of business in Dallas.

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Thompson reported from Sacramento, California. Associated Press Writer Bob Christie contributed from Phoenix.


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