Backpage founders charged with using crypto to launder $500M

Backpage founders charged with using crypto to launder $500M

Backpage founders charged with using crypto to launder $500M

Last week, was indicted on conspiracy, facilitating underage prostitution, and money laundering charges.

The indictment contains no sex-trafficking charges, but it's the money the prosecutors are going after, saying when it altered ads, that Backpage conspired to profit from prostitution.

The unsealed indictment, returned by a federal grand jury in Arizona, lays out details concerning 17 alleged victims, including both adults and minors as young as 14 years old, who were trafficked on the site. Since it launched in 2004, Backpage has laundered some of the $500 million in prostitution revenue it's received; nearly every dollar the website made was through illegal activity, according to the indictment.

Sex ads posted on the site have included those involving children being trafficked by adults.

The top online human trafficking site,, was seized by the federal government two weeks after the U.S. House and Senate passed a bill to stop online human sex trafficking.

One company memo simply read, "Do not acknowledge the prostitution".

"With Backpage being shut down it's only taking, it's only hitting a little piece of the possibility of saving minors", said McClure.

"I believe it will bring down the market for a period of time", said Smith, "I believe that some will try to move overseas".

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Backpage says it bars customers from offering illegal services and periodically used "computerized filters" and human moderators to edit wording of ads that explicitly offered sexual services in return for money.

But Backpage had evaded prosecution, in large part by invoking the Communications Decency Act.

The indictment said Lacey and Larkin retained "significant control" of the website and continued to receive tens of millions of dollars in Backpage-related distributions since "purportedly" selling their interest in the website in 2015.

Members of the House and Senate both launched bills previous year to amend Section 230, and a combined version of those passed both houses last month.

In 2017, a coalition of state and territorial attorneys general asked Congress to make it easier for state and local law enforcement officials to investigate and prosecute online facilitators of child sex trafficking.

Manson says while many more websites like Backpage exist, he hopes since it was shut down, it scares those creating and still operating similar online platforms. The bill also amends another section of federal anti-trafficking law to ban "knowingly assisting, supporting, or facilitating" sex trafficking.

The indictment said the site contended it tried to prevent prostitution ads, but investigators determined that was not the case.

Defendant Andrew Padilla, the chief operating officer, allegedly wrote co-defendant Joye Vaught, a supervisor, that "i$3 f we don't want to blow past 500 [referrals to NCMEC] this month, we shouldn't be doing more than 16 per day".

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