The online classified advertising site, Craigslist, is facing accusations that it has become a hub for underage prostitution after two young women placed an advertisement in the Washington Post saying they were repeatedly sold through the site to men who "paid to rape" them.

The allegations came as a federal judge threw out an attempt by Craigslist – named after its owner, Craig Newmark – to stop a criminal investigation over its "adult services" section which is alleged to carry thousands of prostitution ads daily.

In an open letter to Newmark placed in the Washington Post, the two women appealed for him to shut Craigslist's adult services section.

One of the women, who identified herself as MC, said she was forced into prostitution at the age of 11 by a man who trafficked "many girls my age".

"All day, me and other girls sat with our laptops, pasting pictures and answering ads on Craigslist, he made $1,500 a night selling my body, dragging me to Los Angeles, Houston, Little Rock – and on one trip to Las Vegas in the trunk of a car," the ad said. "Craig we write this letter so you will know from our personal experiences how Craigslist makes horrific acts like this so easy to carry out … and the men who arrange them very rich."

The second woman, identified as AK, said that last year she met a man twice her age who pretended to be her boyfriend. "He put my picture on Craigslist, and I was sold for sex by the hour at truck stops and cheap motels, 10 hours with 10 different men every night. This became my life," the ad said. "Men answered the Craigslist advertisements and paid to rape me. The $30,000 he pocketed each month was facilitated by Craigslist 300 times."

AK said she knew of more than 20 girls who were trafficked on the site: "Like me, they were taken from city to city, each time sold on a different Craigslist site."

The ad was partly paid for by Fair Fund, a group working with young women who have been sold for sex. It described Craigslist as "the Wal-Mart of online sex trafficking". Fair Fund said it had checked the women's accounts and could vouch for them. It said AK had met the US attorney general, Eric Holder.

Craigslist's chief executive, Jim Buckmaster, said it worked tirelessly with law enforcement agencies to identify ads that exploited children, manually reviewed every adult service ad before posting and required phone verification by the person placing it.

Two years ago, under the threat of legal action by about 40 US states, Craigslist began charging $10 (£6.25) per posting for adult services ads, whereas most of the site is free. Some of the revenue goes to charity. That did not reassure groups working with children forced into the sex trade.

Thousands of ads continue to be placed each day that list charges for encounters. Many include words that the Fair Fund says are flags for underage prostitution such as "fresh" and "inexperienced".

Last month, dozens of anti-prostitution groups led protests outside Craigslist's San Francisco HQ to demand an end to sex trade ads.

Several days before the Washington Post advert appeared,

Last week, Newmark was confronted in the street by a CNN reporter with ads from Craigslist that appeared to offer girls for sex, and the case of a 12-year-old girl forced into prostitution and sold on the site until she was freed in a police raid north of Washington in June. A 42-year-old man was charged with human trafficking. Newmark declined to respond.

The website is under criminal investigation in South Carolina, where the attorney general, Henry McMaster, described Craigslist's alleged promotion of prostitution as a "very serious matter". On Friday, a federal judge threw out an attempt by Craigslist to block the investigation. The same day, the attorney general of Connecticut, Richard Blumenthal, called for Craigslist to scrap sex adverts.

Buckmaster has accused McMaster and other law enforcement officials of "grandstanding" and attempting to impose an outdated sexual moral code.