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Business

Backpage.com Lawyers Want Executives' Pimping Charges Tossed

The case sets up the latest in a series of legal battles — one of which already reached the U.S. Supreme Court — over a federal law designed to protect free speech online

In this Jan. 10, 2017 file photo from left, Backpage.com CEO Carl Ferrer, former owner James Larkin, COO Andrew Padilla, and former owner Michael Lacey, are sworn-in on Capitol Hill in Washington, prior to testifying before the Senate Homeland Security and Governmental Affairs subcommittee hearing into Backpage.com's alleged facilitation of online sex trafficking, photo: AP/Cliff Owen
2 months ago

SACRAMENTO, California – The operators of Backpage.com pushed for pimping charges to be tossed out for the second time Tuesday, two weeks after the website that prosecutors dubbed an online brothel stopped advertising adult services in the face of a congressional investigation.

The case sets up the latest in a series of legal battles — one of which already reached the U.S. Supreme Court — over a federal law designed to protect free speech online by granting immunity to websites that post content created by third-party users.

The California attorney general’s office charged Backpage executives Carl Ferrer, Michael Lacey and James Larkin last month with conspiracy to commit pimping and 26 counts of money laundering. Ferrer also is charged with 12 counts of pimping, seven involving children.

They are accused of knowingly profiting from prostitution. The charges allege that the three laundered nearly $37 million derived directly or indirectly from illegal activity from July 2014 through August 2016, with the monthly take often topping $2 million.

The expanded charges came two weeks after Sacramento County Superior Court Judge Michael Bowman dismissed an earlier case, ruling that the website’s ads were free speech protected by the federal Communications Decency Act.

Attorneys for the men said the state is trying to make an end-run around that ruling and asked for Bowman to preside over the new case.

“It raises the same arguments that Judge Bowman has already ruled on,” Jim Grant, an attorney for the three men, told Judge Curtis Fiorini.

He later said the new charges amount to “additional bites of the apple by the state.”

The trio did not enter pleas. Defense attorneys moved to have the charges dismissed on the same grounds that Bowman accepted. Judge Fiorini told the men to return to court Feb. 9 to see which judge will handle the case.

Prosecutors say they have new evidence. They claim Backpage illegally funneled money through multiple companies and created various websites to get around banks that refused to process transactions.

The defense’s motion to dismiss the case accuses the attorney general’s office of “harassment rather than a good-faith prosecution.” It asks a judge to order the return of about 9 million documents, more than $230,000 seized during a three-year investigation and about $300,000 worth of computer equipment.

“The Communications Decency Act is not an all-purpose get-out-of-jail-free card,” the state responded in its court filing.

Former Attorney General Kamala Harris filed both sets of charges, initially as she campaigned for the U.S. Senate and then again shortly before taking her seat.

Xavier Becerra, sworn in as the new attorney general Tuesday, said he would review the case but pledged generally to prosecute sex traffickers “with every tool we have in our arsenal.”

The U.S. Supreme Court this month left in place a different lower-court ruling that said Backpage’s ads are protected by federal law because the site is publishing advertisements created by clients.

A U.S. Senate subcommittee separately is looking into whether the website is a front for prostitution. The site removed its adult section to protest what it asserts is government censorship.

Ferrer, 55, Backpage’s CEO, Lacey and Larkin refused to testify before Congress this month. Lacey, 68, and Larkin, 67, both from Arizona, once owned a chain of alternative newspapers, including the Village Voice in New York City.

The Permanent Subcommittee on Investigations released a report citing internal documents showing that up to 80 percent of Backpage ads are edited to conceal that they are for sexual transactions. That opposes the legal argument that the site is simply publishing ads produced by others.

Backpage has denied the allegations.

The Senate report said the company used a computer program to find and delete words such as “Lolita,” ”cheerleader,” ”teenager” and “young.”

DON THOMPSON

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