Backpage Owners Promoted Prostitution, Used Bitcoin to Launder Money

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PHOENIX - Seven people, including some with Phoenix connections, have been indicted in federal court on prostitution crimes relating to the operation of the Backpage.com website. 

The 93-count grand jury indictment was unsealed Monday afternoon. It alleges that Backpage.com earned more than $500 million from the human trafficking industry and that operators sent the proceeds to foreign countries. 

Federal prosecutors say [they’ve identified] there were at least 17 victims of trafficking, including a 14-year-old.

One victim was allegedly murdered by a customer. Details surrounding the murder are unknown at this time.

Two of the defendants, James Larkin and Michael Lacey, are also the former publishers of the “Phoenix New Times”, and they still maintain homes in Arizona.

The FBI confirms agents raided Lacey's home in Sedona on Friday. ABC15 also witnessed the FBI removing bags of evidence from Larkin's home in Paradise Valley.

The U.S. government electronically shut down Backpage.com Friday, in connection with the case.

The website offers a wide variety of good and services for sale. However, critics say the vast majority of ads posted were in the “adult services“ section. Authorities have said for years that many of the ads are thinly disguised offers for prostitution.

Backpage.com operators are accused of promoting prostitution and, using Bitcoin to launder the proceeds to other countries including Iceland, Hungary, and the Netherlands.

The indictment said many ads published on Backpage.com depicted children who were sex trafficking victims.

While the site maintains it diligently tries to prevent prostitution ads, it still allows them and has declined to take steps to confront the problem, the indictment said.

The seven people charged in the federal indictment are accused of trying to sanitize ads by removing photos and words that were indicative of prostitution and then publishing a revised version of the notices.


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