U.S. Shuts Down Backpage, a Classified-Ad Website, Indicts Co-Founders

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Federal officials said they were shutting down Backpage, a controversial classified-ad website that has long been accused by political leaders and law-enforcement officials of providing a platform for prostitution and sex trafficking.

As part of the federal operation, a grand jury in Arizona indicted seven people associated with Backpage on charges of facilitating prostitution and money laundering. They included Michael Lacey, 69 years old, and James Larkin, 68, the co-founders of Backpage.

Backpage lawyers didn’t respond to a request to comment on Monday. But Backpage and its attorneys have previously rejected assertions that it participates in fostering prostitution and have said it has taken steps to ensure its advertisers aren’t dealing with children.

The 93-count indictment identified at least 17 instances where people were allegedly trafficked for sex through Backpage, one of whom the indictment said was slain by a client. Some of the alleged victims were children, one as young as 14, officials said.

Other charges allege that people associated with Backpage have earned about $500 million in revenue related to prostitution since 2004, and that they engaged in a conspiracy to launder the illicit funds through overseas banks.

“This is not a website that accidentally let an occasional ad slip through cracks of its review system,” a Justice Department official said. “They engaged in consistent and concerted action to host ads they knew were related to prostitution.”

U.S. officials on Monday called Backpage the leading online forum for prostitution ads, including those showing the prostitution of children. Authorities have been trying for years to shut down Backpage, but have faced legal setbacks in part due to laws that limit the liability of websites for the activities of their users.

“For far too long, Backpage.com existed as the dominant marketplace for illicit commercial sex, a place where sex traffickers frequently advertised children and adults alike,” Attorney General Jeff Sessions said.

Backpage, already the subject of multiple criminal probes, had become a lightning rod for critics of websites accused of turning a blind eye to human trafficking. Congress recently passed a law limiting the legal immunity granted to websites for actions by their users.

Backpage CEO Carl Ferrer was arrested in 2016 and charged in California with offenses including multiple counts of pimping of minors. Mr. Ferrer, who wasn’t listed in Monday’s indictment, and other executives at the company haven’t been convicted of criminal wrongdoing in the case.

The case, initially pursued by California’s former attorney general, Kamala Harris, now a U.S. senator, suffered a setback when Sacramento County Superior Court Judge Michael Bowman ruled in favor of Mr. Ferrer and two other Backpage executives.

“Congress has spoken on this matter, and it is for Congress, not this court, to revisit,” said the judge, citing a law passed in the early days of the internet that granted immunity to websites for criminal activity they may facilitate. California later filed another lawsuit on criminal money-laundering charges, and that case is continuing.

Backpage has positioned itself as a champion of free speech. In a federal appeals-court decision in 2015, the company won a lawsuit against a sheriff’s office in Illinois that had pushed credit card companies to drop the website.

Members of Congress, including Sens. Claire McCaskill (D., Mo.) and Rob Portman (R., Ohio), have investigated the alleged role of Backpage in the sex-trafficking system.

The bipartisan law passed last month, led by Sen. Richard Blumenthal (D., Conn.) and Mr. Portman, would amend the Communications Decency Act of 1996 to roll back immunity that Congress had conferred on websites for the actions of their users.

Its passage marked a rare political defeat for big technology firms, which have become a powerful lobbying force in Washington in recent years. Since then, a number of websites have taken down forums allegedly involved in sex solicitation, including Craigslist and Reddit. Others, such as NightShift and CityVibe, have shut down.

Don Fort, who heads the criminal investigation office of the Internal Revenue Service, said that “these types of investigations can be made more challenging with the use of virtual currency, offshore banking and the anonymity of the Internet.” But, he added, “there is not a place [the wrongdoers] can hide where we will not find them.”

Large companies like Alphabet Inc.’s Google long resisted any change to the website immunity law, fearing it could lead to a greater erosion of congressionally granted legal protections. Technology advocacy groups have supported Backpage in some of its legal battles.

But a series of political misfortunes, including Russian use of online platforms to meddle in the 2016 election, have diminished the tech industry’s standing in Washington, making it easier for lawmakers to pass the legislation effectively targeting adult-services sites.

The moves against Backpage didn’t appear directly linked to the legislation, but instead resulted from a long-running investigation by federal and state authorities.

Still, Ms. McCaskill said the bill could help law enforcement agencies move against other sites. “This is great news for survivors, advocates and law enforcement,“ she said, adding that the move against Backpage was ”further proof” the legislation could help combat sex crimes.

“State and local law enforcement need this bill to enable them to take swift action against websites that knowingly facilitate sex trafficking of children online and to stop the next Backpage long before another website can claim so many innocent victims,” she said.

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