Carl Ferrer, the CEO of classified advertising site Backpage.com, was arrested on Thursday and charged with pimping of a minor and other charges. The California and Texas state attorneys general said the charges were the result of a three-year investigation that showed Backpage generating millions of dollars from ads for escorts or prostitution.
The California attorney general said charges of conspiracy to commit pimping were also filed against Michael Lacey and James Larkin, the site’s controlling shareholders. A statement accompanying the arrest warrant said Ferrer, Lacey and Larkin own Backpage through a Netherlands-based parent company established in late 2014, UGC Tech Group C.V., even though they announced then that it had been sold.
Ferrer was arrested in Houston as he got off a flight from Amsterdam, where the company has offices. Backpage is the leading site in the U.S. for escort ads, which is generally thinly disguised ads for prostitution, and it has been accused of protecting sex traffickers of children. The company has often denied those allegations.
Liz McDougall, the company’s attorney and primary spokesperson, did not immediately reply to a request for comment. The company has previously argued that ads it publishes are protected speech under the U.S. Communications Decency Act, which allows websites to avoid liability for third-party ads placed by others.
In a news release, California Attorney General Kamala D. Harris said the company was “essentially operating as an online brothel and generating millions of dollars off the illegal sex trade.”
“Raking in millions of dollars from the trafficking and exploitation of vulnerable victims is outrageous, despicable and illegal,” said Attorney General Harris. “Backpage and its executives purposefully and unlawfully designed Backpage to be the world’s top online brothel.”
Federal and state agents raided the offices of Backpage in the Dallas, Texas, community of Oak Lawn and searched for financial and other information.
Earlier this week, the U.S. Supreme Court let stand a ruling that supported Backpage in its fight against Cook County, Ill., Sheriff Thomas J. Dart. That ruling, by the Seventh U.S. Circuit Court of Appeals, accused the sheriff of lying in an attempt to put Backpage out of business.
But in mid-September, the U.S. Supreme Court refused to block a subpoena against Backpage by a Senate committee trying to obtain information and records about how the company reviewed its escort ads.