A screen shot of the website Backpage.com is seen after federal agents seized it on April 6. | Damian Dovarganes/AP Photo Backpage.com CEO admits guilt in plea deal with feds, states Carl Ferrer pleaded guilty to charges of money laundering and conspiring to facilitate prostitution

The CEO and co-founder of the classified ad website Backpage.com cut a plea deal with state and federal prosecutors, admitting that he knew that the site had become a massive online marketplace for prostitution.

Carl Ferrer, 57, agreed to plead guilty to charges in state courts in Texas and California and federal charges in Arizona in a bid to resolve an array of criminal investigations he was facing over his role in the site.


The plea deal appears to limit Ferrer's total potential prison time to no more than five years.

"I have long been aware that the vast majority of these advertisements are, in fact, advertisements for prostitution services (which are not protected by the First Amendment and which are illegal in 49 states and much of Nevada)," Ferrer acknowledged in a written statement that was part of the plea bargain.

During a lengthy Senate investigation, Ferrer and other Backpage officials insisted they were policing the website aggressively to remove such advertising.

However, Ferrer admitted in the plea deal that those efforts were just window dressing.

"I worked with my co-conspirators to create 'moderation' processes through which Backpage would remove terms and pictures that were particularly indicative of prostitution and then publish a revised version of the ad," he said in the plea document. "It was merely intended to create a veneer of deniability for Backpage."

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Ferrer agreed to cooperate with federal authorities in shutting down Backpage's websites. Officials did that last Friday, taking over the web domains and redirecting visitors to pages controlled by the U.S. Postal Inspection Service.

Ferrer entered a guilty plea to a federal conspiracy charge in a sealed courtroom in Phoenix last Thursday, one day before the feds shut down the sites. Authorities also revealed they'd obtained a 93-count grand jury indictment charging seven individuals connected with Backpage with money laundering and using the internet to facilitate prostitution.

Ferrer was not among the defendants charged in that case, raising suspicion that he was cooperating with authorities. However, it is unclear from the federal court filings whether he has agreed to testify against his colleagues, including fellow Backpage co-founders Michael Lacey and James Larkin.

A Justice Department spokesperson declined to comment on whether such cooperation provision of Ferrer's plea deal.

Ferrer appeared in state court in Sacramento Thursday to plead guilty to four felony money laundering charges stemming from the case.

Ferrer's sentencing in federal court in Phoenix is set for July 9.

In 2016, California authorities brought pimping charges against Ferrer, Lacey and Larkin, but the case was dismissed by a judge who said it violated First Amendment rights and a federal law limiting regulation of the internet.

California prosecutors reframed their case last year and persuaded a judge to allow the state to pursue money laundering charges against the trio.

Meanwhile, state attorneys general and anti-sex-trafficking activists persuaded Congress to pass a law eliminating internet providers' legal immunity for knowingly facilitating advertising related to sex trafficking. The Allow States and Victims to Fight Online Sex Trafficking Act, signed by President Donald Trump on Wednesday, also makes it a federal crime to run a web platform with the intent to promote or facilitate prostitution.