founder: I knew all along we'd been a front for prostitution

Looks like the feds finally got their man, but it took an act of Congress to do it. For years, prosecutors have alleged that the online classified-ads site not only served as a front for prostitution but actively collaborated in it. The alt-media founders have argued that they only provide a platform for ads. After Congress made it easier to prosecute website providers by changing Section 230 of the 1996 Communications Decency Act, one co-founder threw in the towel in a plea deal made public today:

The CEO and co-founder of the classified ad website cut a plea deal with state and federal prosecutors, admitting that he knew that the site had become a massive online marketplace for prostitution.

Carl Ferrer, 57, agreed to plead guilty to charges in state courts in Texas and California and federal charges in Arizona in a bid to resolve an array of criminal investigations he was facing over his role in the site.

The plea deal appears to limit Ferrer’s total potential prison time to no more than five years.

“I have long been aware that the vast majority of these advertisements are, in fact, advertisements for prostitution services (which are not protected by the First Amendment and which are illegal in 49 states and much of Nevada),” Ferrer acknowledged in a written statement that was part of the plea bargain.

The allocution in the plea bargain makes it clear that the conspiracy intended to evade state laws against prostitution. Previous to this week’s action against Backpage, Ferrer and other principals insisted that they tried to eliminate illegal trafficking by scrutinizing paid advertisements. Prosecutors alleged in previous indictments that their interventions were only a smoke screen, and that the company took an active role in crafting the ads to avoid detection. Guilty as charged, Ferrer says in his statement:

Note well that Ferrer makes it clear that this was not the work of a couple of employees who went rogue, but that the entire company culture was crafted for that purpose. The conspiracy goes beyond just the ads, too. Ferrer admits to forming a conspiracy to launder money to hide the overwhelming amount of cash that the escort and prostitution rings provided, and to ensure that the revenue streams survived efforts by credit card companies to block prostitution:

The DoJ filed the plea deal on April 5th. The very next day, the FBI seized Backpage’s website and all of the domains associated with their businesses and indicted seven principals. Ferrer’s name was not among them, which had some expecting this news of a plea deal to emerge at some point. In between, though, prosecutors took Ferrer on a road trip:

Federal and state authorities quietly took Ferrer on a three-state guilty plea tour beginning last week, but it was only revealed Thursday. Court records show that Ferrer pleaded guilty conspiracy to facilitate prostitution and money laundering in federal court in Phoenix on April 5, with the hearing and documents sealed. also pleaded guilty to a money laundering conspiracy in Phoenix. Ferrer then traveled to his home state of Texas this week, where state Attorney General Ken Paxton announced Thursday that Ferrer pleaded guilty to money laundering and Backpage pleaded guilty to human trafficking.

On Thursday, Ferrer turned up in Sacramento, where he was first charged along with Lacey and Larkin in 2015, and again pleaded guilty to money laundering. He was then released on bond. His California plea agreement indicates prosecutors will seek no more than five years in prison, and federal prosecutors agreed that any sentence in Arizona would run concurrently to that. Court documents in Texas weren’t available, but Paxton said in a news release Ferrer would be sentenced to up to five years as well. …

In his California plea, Ferrer agreed to take down every Backpage website he could within five days, and to forfeit all domains related to Backpage within 14 days. The federal indictment seeks to seize 10 residences in California, Arizona, Texas and Illinois and 25 bank accounts, as well as 35 website domains.

Apparently crime doesn’t pay, but it rents for a long time.

With Ferrer’s cooperation, the cases against the other defendants will likely go rather smoothly. The question will be whether those who defended Backpage in the past will still be inclined to do so after reading Ferrer’s allocution. The Women’s March might be hardest hit.