The Justice Department has reached a settlement agreement in the civil forfeiture case involving Backpage.com, an internet forum known for hosting prostitution ads, including those depicting sex work of minors. The agreement involves $215 million in assets linked to Backpage's profits, which were previously seized by the government. These assets will be forfeited to the United States.
The forfeited assets include cash, cryptocurrency, and a parcel of real estate in San Francisco. They will be made available through a remission process to compensate victims of the crime. Details about this process are expected to be announced later. The forfeiture accounts for more than 80% of the value of property seized or restrained in this case.
United States Attorney Martin Estrada commented on the significance of this settlement: “This settlement agreement marks a significant milestone in a criminal case involving the sexual exploitation and trafficking of countless women and children.” He added that it demonstrates that those profiting from such activities face severe consequences.
Backpage was prominent in online illegal sex work advertising for most of its 14-year operation, with over 90% of its revenue stemming from adult-related ad sections. The company monetized these ads through various paid options like posting across multiple areas and increased promotion. The CEO admitted that most adult ads on the site were related to prostitution.
In April 2018, several Backpage-related entities pleaded guilty to conspiracy to engage in money laundering in Arizona federal court. Key figures like Michael Lacey, Scott Spear, and John “Jed” Brunst received prison sentences ranging from five to ten years for their roles in these activities.
Court documents revealed that from September 2010 until its seizure by U.S. authorities in April 2018, Backpage was a leading platform for prostitution ads. Conspirators promoted prostitution using strategies like reciprocal links with forums where "johns" could review acts with specific women and filtering terms indicating sex-for-money while allowing ad postings. This was an attempt at maintaining "plausible deniability." Over time, they earned over $500 million, which they laundered through shell companies abroad.
The investigation involved agencies such as the United States Postal Inspection Service, FBI, and IRS Criminal Investigation. The United States Attorney’s Office for the District of Arizona played a crucial role in prosecuting related criminal cases.
Assistant United States Attorney Jonathan S. Galatzan is handling this case under the Asset Forfeiture and Recovery Section.
The official case name is United States of America v. $1,546,076.35 In Bank Funds Seized from Republic Bank of Arizona Account 1889 et al., CV 18-08420 (C.D. Calif.).