The Los Angeles Times has this blockbuster story Friday about the arrest of the CEO of BackPage.com on charges of pimping based on a 3-year investigation by California AG Kamala Harris. Harris has criticized the website for profiting from the sex trafficking of adults and children.
From the story:
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, 55, is also accused of multiple counts of pimping and pimping minors, according to court papers.
A spokeswoman for Harris said late Thursday that Lacey, 68, and Larkin, 67, were not in custody but a warrant had been issued for their arrest. Both men are residents of Arizona and are the former owners of Phoenix New Times and the Village Voice.
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 said.
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.
The Harris investigation comes a year after Voice Media divorced itself from BackPage.com according to this article in Adweek Magazine. Voice Media owned the VillageVoice, LA Weekly and our own OCWeekly so each paper and its corresponding website derived revenue from BackPage.com during this partnership which Adweek reports delivered significant revenue to the publication chain. It’s not known the breakdown of BackPage revenue to each publication.
From that 2012 Adweek story:
“Village Voice Media, which publishes 13 alternative weekly newspapers including the Village Voice and LA Weekly (as well as their corresponding websites), is finally cutting ties with classifieds section Backpage.com—a constant thorn in the company’s side as well as a major source of its revenue. But it remains to be seen whether the group can replace that revenue along with ads that the bad publicity cost the company.
Backpage.com became the web’s leading destination for prostitution ads after Craigslist shut down its own “adult services” section due to pressure from outside groups. Backpage was also accused of aiding sex trafficking, which resulted in public outcry from government and law enforcement officials and led blue-chip advertisers like Pfizer and American Airlines to boycott Village Voice publications due to their connection with Backpage.
Backpage brought in at least $28.9 million in the past year with its adult services ads alone, according to an estimate from interactive media consultants AIM Group. That, in turn, accounted for fully one-seventh of the company’s revenue, the Los Angeles Times reported. The loss of the Backpage advertising, said AIM group founding principal Peter Zollman, “is going to be a pretty heavy blow for the print.”
So leading up to the end of September 2012, BackPage.com represented one-seventh of the paychecks for Voice Media outlets assuming all newspapers shared revenue generated by the advertisements equally. For fun, let’s say an OC Weekly employee earned $1,000 a week then. That means $142.86 of each week’s paycheck was derived from the backs of women and men in the sex industry, some of which against their will due to sex trafficking and some of which under the age of 18. Today’s LA Times story reports BackPage.com ads in California alone account for $51 million this year. You have to wonder how was business prior to 9/24/2012.
The OC Weekly has since been acquired by a Newport Beach publisher of boating magazines earlier this year, nearly a year after Voice Media put it up for sale. The publication still carries small display ads for Orange County strip clubs, massage parlors and classified ads for “adult services.”
While OC Weekly editor Gustavo Arellano is very good at — rightfully — admonishing his favorite targets in OC, he’s remarkably silent on his publication’s former association with the world’s leading online brothel.