CEO of Backpage, called 'world's top online brothel,' arrested on pimping charges in crackdown by Kamala Harris

The chief executive of the classified ad website Backpage.com was arrested Thursday on pimping charges, part of a broad crackdown led by state Atty. Gen. Kamala Harris, who criticized the website for profiting from the sex trafficking of adults and children.

Carl Ferrer was taken into custody in Houston after arriving on a flight from Amsterdam, according to a statement from Texas Atty. Gen. Ken Paxton, whose office joined in the criminal inquiry.

The two men who founded the Dallas company in 2004 and remain its owners, Michael Lacey and James Larkin, were charged along with Ferrer in a criminal complaint filed Sept. 26 in Sacramento County Superior Court. All three are accused of conspiracy to commit pimping, a felony.

Ferrer is also accused of multiple counts of pimping and pimping minors, according to court papers.

It was unclear if Lacey and Larkin, both residents of Arizona, were taken into custody.

Citing internal reports, prosecutors contend that nearly all of Backpage’s global income derived from its “adult” sections, with ads posted and paid for by users. The ads typically feature nearly nude photos and offer a menu of sex explained in coded language, prosecutors allege.

Investigators in Harris’ office focused on revenue generated from California, which accounted for about 15% of the company’s global income, according to court papers. During a 29-month period starting in January 2013, Backpage had a gross income of about $51 million in the state.

“Raking in millions of dollars from the trafficking and exploitation of vulnerable victims is outrageous, despicable and illegal,” Harris said. “Backpage and its executives purposefully and unlawfully designed Backpage to be the world’s top online brothel.”

During the three-year-long inquiry, authorities in California stated they found numerous instances in which the company received fees from ads for escorts under the age of 18. The minors lived in Los Angeles, Sacramento and Santa Clara counties, according to the criminal complaint.

Undercover agents responded to ads and met women and girls who described how they used — or were forced to use — the website to sell sexual intercourse.

A 27-year-old woman said she began using Backpage after Craigslist shuttered its escort section and the prostitution website MyRedbook.com was shut down by federal officials. 

A 15-year-old girl, who said she was forced into prostitution at age 13 by her pimp, bluntly told authorities that Backpage “profits off of women and men.” The teen, whose name was not disclosed, stated that the site simplified the online sexual marketplace.

“There is too much access,” she said, “like it’s too easy for people to get on it and post an ad.”

One woman said she made up to $1,000 a day, often buying her ads with Bitcoin purchased with Amazon.com gift cards.

Although the site allows classified ads for myriad categories — such as jobs, housing, furniture and clothing — investigators concluded that its “adult” section generated the vast majority of its income, according to internal revenue reports. 

Prosecutors said Lacey and Larkin helped oversee Backpage’s operations and received bonuses, including $10 million each in 2014. Ferrer oversaw all aspects of the company as chief executive, and prosecutors contend he derived money from the prostitution of women and children.

Separately, Ferrer was accused of taking content posted by Backpage customers and cross-publishing it on related websites including BigCity.com and EvilEmpire.com. Such a “scheme” allowed Ferrer to widen Backpage’s reach in the illicit online sex trade, prosecutors said.

Investigators on Thursday raided the company’s Dallas office.

The website has long been a target in the crusade against human trafficking. The National Center for Missing and Exploited Children has repeatedly faulted the site for encouraging an online environment for child sex trafficking and failing to implement preventative steps to stamp out abuse. 

The National Center for Missing and Exploited Children has reported about 2,900 cases of suspected child sex trafficking via Backpage to law enforcement agencies in California since 2012, officials said.

Larkin defended the company in a 2011 an interview with The Times, saying that the solution was not to eliminate the category of adult ads from the website.

 "What needs to be done is what we are doing: Hosts need to monitor and remove offending posts on a real-time basis, and cooperate rapidly when illegal posts are brought to their attention,” Larkin said.

photo CEO of Backpage, called 'world's top online brothel,' arrested on pimping charges in crackdown by Kamala Harris images

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