Feds Seize $215 Million from Backpage.com in Major Forfeiture Win

Federal prosecutors revealed on Wednesday that they have secured $215 million in assets linked to profits from Backpage.com, as part of a forfeiture lawsuit settlement involving the controversial website that facilitated prostitution advertisements.

U.S. Attorney Martin Estrada emphasized the settlement’s significance, stating, “This agreement marks a pivotal moment in addressing the sexual exploitation and trafficking of countless women and children. The forfeited amount not only serves as a means for victims to recover but also signals that those profiting from such crimes face severe legal consequences.”

The forfeited assets, which comprise cash, cryptocurrency, and real estate in San Francisco, will be allocated to compensating victims of related crimes, according to a statement from the U.S. attorney’s office in Los Angeles. The total forfeiture is more than 80% of the property seized or restrained during the investigation.

Backpage.com, operational from 2004 until its seizure by the FBI in April 2018, was notorious for being the leading platform for prostitution advertisements. During its peak, over 90% of the website’s revenue stemmed from adult-related sections. The former CEO, Carl Ferrer, admitted in court that the majority of these ads were indeed for prostitution.

In Arizona, various entities associated with Backpage have pleaded guilty to conspiracy related to money laundering. Several members of the site’s management have faced imprisonment following their convictions.

Ferrer was candid during the trial, stating, “They were prostitution ads. We wanted customers that would respond to prostitutes — the Johns.” His testimony shed light on the operations behind the site, likening its business model to that of Craigslist.

At the height of its operations, Backpage generated approximately $150 million annually, primarily from female escort advertisements. Initially, ads were affordable, but as Backpage dominated the market, prices escalated significantly.

After over a week of jury deliberations, the panel remained deadlocked on 99 out of 100 felony counts against five defendants, including conspiracy and money laundering charges, leading to a split decision on the case.