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Texas AG charges CEO of Backpage the largest promoter of online sex trafficking

October 7, 2016  |  Posted by: Francesca Falzarano
Texas AG charges CEO of Backpage the largest promoter of online sex trafficking

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Texas Attorney General Ken Paxton spearheaded the largest online human trafficking bust in the state’s history by arresting the CEO of Backpage.com will shut down as a result of the raid.

Paxton contends that the victims that are sex trafficked include both involuntary and voluntary participants. Carl Ferrer, the leader of the organization, was apprehended at a Houston airport.

Backpage.com is an international “advertising” site.

The Texas AG and a spokesperson from the California Attorney General’s office gave a news conference at approximately 4 p.m. to announce the raid and arrest.

Attorney General Paxton referred to the site as a “deep-seated evil” “in our backyard” that had left to the trafficking of both children and adults.

Ferrer, who is 55-years-old, was arrested on Thursday afternoon after he arrived off of a flight from Amsterdam. The Texas and California Attorney Generals collaborated on a lengthy investigation and discovered evidence that supported that child and adult sex trafficking victims were being coerced into prostitution. Backpage.com reportedly engaged in this through escort ads posted on its site.

“Making money off the backs of innocent human beings by allowing them to be exploited for modern-day slavery is not acceptable in Texas,” the AG declared. “I intend to use every resource my office has to make sure those who profit from the exploitation and trafficking of persons are held accountable to the fullest extent of the law.”

According to WFAA, Nearly 35 members of the Texas AG’s Law Enforcement Unit engaged in the apprehension of Backpage’s CEO. They also issued a search warrant for the Dallas headquarters of the corporation.

Backpage is deemed one the largest advertising sites of adult escort services in the United States. The company is a Dutch-owned LLC that was incorporated in Delaware with its principal location of operations in Dallas.

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Backpage.com CEO Carl Ferrer was arrested in Texas on a pimping charge. (POLICE PHOTO)

The site is considered a worldwide classified advertisement site in which individuals can post or find an adult escort, among other things.

An affidavit for a search warrant read, “It is currently the single largest purveyor of Internet sex ads in the United States… profits from this line of business register in the millions yearly.”

A search warrant affidavit requested items that were assumed to be tools or instruments used in committing the crime, including money laundering and prostitution/pimping.

All financial and business-related documents concerning Backpage.com, along with companies that have an invested share in the website were targeted, along with all business and financial records pertaining or related to the company’s shareholders, namely Carl Ferrer, Michael Lacey, and Jim Larkin.

The affidavit filed by a peace officer also requested all identifying records and images related to the business and its parent companies. Cell phones, SIM cards, and equipment related to phones in the care, custody, or control of Ferrer were also seized.

Any reports explaining what person or persons manage control over the business, all computer hardware, and all digital storage device passwords created to restrict access to the site were also mentioned in the affidavit.

Additionally, the testimony urged that “members of the California Department of Justice and California Attorney General’s Office be permitted to accompany Texas Attorney General’s Office agents in the execution of this search warrant… Any evidence seized will be shared with California Attorney General’s Office and any law enforcement personnel working in their direction.”

Sergeant Cora Gray, the affiant, is appointed to the Human Trafficking and Transnational/Organized Crime Section of the Criminal Investigations Division at the Office of the Attorney General.

The Sergeant is an expert in the field of trafficking and has, over the previous four years, carried out hundreds of searches on Backpage.com and followed tips to find missing and abused children.

The probable cause revealed in the affidavit for the issue of search warrant included:

The adult escort ads on Backpage.com are displays of prostitution. Those involved in prostitution pay Backpage.com for their ad space, soliciting potential clients for their services.

Backpage acquired over 90% of their profits from the adult escort ad part of their classified advertising. In California, that adds up to about $50 million in earnings for the period between January 2013 to May 2015, earning them a whopping $1.5 to $2.5 million on a monthly basis.

Carl Ferrer has been explicitly informed by authorities about prostitution advertisements on Backpage.com and is regularly implicated in hundreds of subpoenas and requests that Backpage.com receives each year for its association with the prostitution and sex trafficking of both adults and minors on the site.

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Backpage is best known for its adult section. (Screenshot)

The pimping statute in California rules that it is a crime “knowing another person is a prostitute,” to “live, derive support or maintenance from the earnings or proceeds of a person’s prostitution,” and to “solicit or receive compensation for soliciting for the person.”

Pimping in the state of California is considered a felony punishable by three to eight years of time behind bars.

Pimping is also considered a criminal offense according to the Texas Penal Code section for Money Laundering because it is a crime “punishable by confinement for more than one year under the laws of another state.” The gift cards, credit and debit cards, Bitcoin, and cash used to buy prostitution ads on Backpage all qualify as “funds” under the Penal Code in Texas.

Under the Texas Money Laundering law, the court can consider all $50 million made by Backpage.com’s adult escort faction in the state of California when categorizing this crime because it is seen as a continuing business model and a continuing course of conduct.

The investigation was launched after reports surfaced from law enforcement agencies, the National Center for Missing and Exploited Children (NCMEC), and press stories about minors who were frequently utilized for commercial sex on the website.

The affidavit also notes: “Since 2012, NCMEC has worked on more than 400 cases involving children sold for commercial sex on Backpage.com.

During this same period, NCMEC has reported 2,900 instances to California law enforcement where suspected child sex trafficking occurred via Backpage.com.”

Authorities announced that Backpage.com refers to itself in public presentations and internal documents as the second biggest online classified advertising service in the U.S.

Back in January, Attorney General Paxton spearheaded the creation of the Human Trafficking and Transnational/Organized Crime (HTTOC) unit. The group works in conjunction with prosecutors around the state to apprehend human traffickers.

Recently, HTTOC collaborated with the Nueces County District Attorney’s Office to achieve a 40-year sentence for a 15-year-old victim’s trafficker.

Early last month, Attorney General Paxton met with a group of trucker drivers who are dedicated to assisting with the spotting and reporting of human trafficking on highways.

Law enforcement officials and truck drivers working in conjunction with one another have proven to be a useful tool to prevent the trafficking and abuse of many young girls.

Paxton’s office has carried out over 50 training sessions across the state since the beginning of the year. Over 4,000 truck drivers and other Texans have been instructed on what to look for when facing potentially trafficked victims.

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