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Justice Department settles $215M case over Backpage.com assets

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U.S. Attorney E. Martin Estrada | U.S. Department of Justice

The Justice Department has reached a $215 million settlement agreement in the civil forfeiture case related to Backpage.com, an internet forum previously used for prostitution ads, including those involving minors. The assets to be forfeited include cash, cryptocurrency, and real estate in San Francisco. These assets will be part of a remission process aimed at compensating victims, with further details to be announced later.

United States Attorney Martin Estrada remarked on the significance of the 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 the forfeiture would allow victims to recover and serve as a warning to those profiting from such activities.

Backpage was known for dominating illegal sex work advertising online for 14 years. Although it offered various ad categories, over 90% of its revenue came from adult-related sections. Its CEO admitted that most adult ads were for prostitution.

In April 2018, Backpage LLC and related entities pleaded guilty in Arizona federal court to conspiracy to engage in money laundering. Key figures such as Michael Lacey and Scott Spear received prison sentences while John "Jed" Brunst also faced imprisonment. Lacey is currently free on bail pending appeal.

Court documents revealed that Backpage facilitated prostitution through marketing strategies like reciprocal link programs with forums where users could review specific acts. They also used automated filters and human moderators to sanitize ad content while maintaining plausible deniability about their nature.

The investigation was conducted by several agencies including the United States Postal Inspection Service, FBI, and IRS Criminal Investigation. The United States Attorney’s Office for the District of Arizona provided substantial assistance during prosecution efforts led by Assistant United States Attorney Jonathan S. Galatzan.

The case is filed under 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.).

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