Carl Ferrer, chief executive officerof Backpage, a classified advertising website that accepts bitcoin and has been linked to facilitating sex trafficking, has been arrested on pimping charges, according to Reuters . Texas and California attorneys general said Ferrer was taken into custody in Houston, Texas on a California warrant.
Backpage is the second largest classified advertising site in the U.S. after Craigslist. U.S. senators have questioned the site over sex trafficking allegations. Civil lawsuits have also charged the site with sex trafficking, including involving children.
Ferrer will appear in a Texas court for an extradition hearing provided he chooses not to waive it, according to Kristin Ford, a spokeswoman for California Attorney General Kamala Harris.
Harris also announced criminal charges against James Larkin and Michael Lacey, Backpage’s controlling shareholders. Warrants have been issued for the two men, who were not in custody.
Ferrer’s lawyers could not be reached for comment.
The Senate voted 96 to 0 to hold the website in civil contempt for not complying with a subpoena to provide information about how it combats sex trafficking in ads on the website’s adult section.
Three teenage girls filed a civil suit against Backpage in 2012 in Washington State, claiming they were raped numerous times after the site ran ads about them. The three sued Backpage for sexual exploitation of children and claimed it posted rules to advise pimps how to run trafficking ads that evade law enforcement.
Backpage responded that its ads are intended to prevent illegal posts. It invoked the Communications Decency Act, claiming it was not responsible for the ads since the ads were from third parties.
Free speech advocates filed briefs in support of Backpage’s position.
The Washington State Supreme Court ruled last year that the teens’ suit could proceed.
Federal appeals courts dismissed a similar case against Backpage earlier this year in Massachusetts, claiming the Communications Decency Act embodies paramount free speech principles.
Bitcoin became the only form of payment for Backpage after American Express, MasterCard and Visa stopped processing transactions on the site, CCN.com reported in July of 2014.
The Dutch company that owns Backpage has repeatedly said it is not specifically trying to facilitate sex business, but it will also not censor paying customers who are not saying things that are illegal.
The Coin Café wallet and exchange in July 2014 advised users to go elsewhere to buy bitcoin if they wanted to do business with Backpage, CCN.com reported. Coin Café posted a notice advising Backpage users that it would halt any transactions to Backpage’s bitcoin wallet, submit the user’s identity information to state and federal authorities, and close their Coin Café account.
An “exclusive San Francisco escort,” Liara Roux, said she was impacted by the credit card companies’ decision to stop supporting Backpage and that bitcoin was one of the few payment methods accepted by Backpage, CCN.com reported. Roux noted that bitcoin had gotten a lot easier to use over the previous couple of years.
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