The Backpage.com Case — Federal Trafficking and Money Laundering Prosecution

The Case

The Backpage.com case is a US federal criminal prosecution targeting the principals of the classified-ad website Backpage.com, which the government said knowingly facilitated prostitution and sex trafficking — including the trafficking of minors — through its adult-services section. Rather than a single-victim crime, it is a sprawling enterprise case built on financial records, internal company communications and victim accounts, and it ended with guilty pleas and federal jury convictions in Phoenix, Arizona.

Backpage was launched in 2004 and grew into one of the largest online classified platforms in the United States. By the mid-2010s, federal investigators, state attorneys general and the US Senate were focused on its adult-services listings. A detailed Senate Permanent Subcommittee on Investigations report published in January 2017 concluded that Backpage had edited ads to conceal evidence of criminality, including prostitution and the sexual exploitation of children.

The Crime

According to the Department of Justice, between at least September 2010 and April 2018 Backpage's principals operated a business model that depended on prostitution-related advertising while publicly claiming to police illegal content. Prosecutors alleged the company laundered hundreds of millions of dollars in proceeds through shell companies, cryptocurrency conversions and foreign bank accounts to evade financial institutions that refused to process payments tied to its adult ads.

The conduct charged in the indictment included 50 counts of facilitating prostitution and money laundering. The DOJ described the operation as a "$500 million prostitution-promotion scheme" spanning nearly a decade.

The Victims

This is not a single-victim case, and the core prosecution does not publish a complete public victim list. Instead, the DOJ and federal courts refer broadly to individuals — including many women and children — whose trafficking was facilitated through Backpage advertisements. The First Circuit's decision in *Doe No. 1 v. Backpage.com* describes plaintiffs who were all minors at the relevant times and were trafficked through ads posted on the site.

Following the criminal case, the Department of Justice established a formal compensation process so that trafficking survivors could seek recognition and restitution. Information about eligibility and applications was published through an official DOJ victim compensation announcement.

Investigation

The investigation was multi-agency and multi-year. The FBI, IRS Criminal Investigation, the US Postal Inspection Service and state partners worked alongside federal prosecutors in Arizona and California. Congressional oversight ran in parallel: the Senate subcommittee's findings, including evidence that Backpage altered ads to remove incriminating terms, fed directly into the criminal theory of the case.

On April 6, 2018, federal authorities seized Backpage.com, replacing the homepage with a notice from the Department of Justice. Days later, CEO and co-founder Carl Ferrer pleaded guilty and agreed to cooperate, providing investigators with detailed knowledge of the company's internal operations and finances.

Trial and Verdict

The first federal trial against the remaining principals ended in a mistrial in 2021. A retrial in the US District Court for the District of Arizona in Phoenix proceeded in 2023, although co-founder James Larkin died by suicide shortly before it began. In November 2023, a federal jury convicted co-founder Michael Lacey on an international concealment money-laundering count, and convicted former owners Scott Spear and John "Jed" Brunst on numerous counts of facilitating prostitution and money laundering.

Sentencing followed in 2024, with Lacey, Spear and Brunst receiving lengthy federal prison terms. Carl Ferrer's 2018 guilty plea remained in place under his cooperation agreement.

Today

Backpage.com remains offline, and the seizure notice has stood since April 2018. The case is widely cited as a turning point in how US federal law enforcement treats online platforms that profit from sex-trafficking ads, and it played a major role in the political debate that produced the FOSTA-SESTA legislation in 2018. Academic and policy analyses, such as the Carl Levin Center summary, continue to examine the case as a model — and a controversy — for platform accountability.

For survivors, the DOJ's victim compensation process is the principal ongoing mechanism tied to the prosecution, while civil litigation against related parties has continued in parallel.