Backpage: The Elephant in the Room

At Backpage.com, the notorious internet virtual brothel, everyone from the highly paid owners to the lowest paid janitors could hardly have been in the dark about what business their company was in—the highly lucrative business of advertising and facilitating prostitution.

Everyone must have known they were awash in rivers of blood money flowing in from trafficking adults and underage innocents in Backpage ads.

Hugely profitable, morally repugnant, the website financed lush lifestyles and secret bank accounts overflowing with mountains of cash these peddlers of human misery made on the backs of adults and children trapped in lives of unspeakable abuse.

Tony Ortega, the obsessive anti-Scientology blogger, knew this for sure. Although he denied it, minimized it, excused it, in the end he knew exactly what Backpage was doing. And he apparently didn’t care.

As protests and government concern about Backpage grew, Ortega, then editor of The Village Voice, part of Village Voice Media that also owned Backpage, quickly leaped to its defense. Through his editorial bullhorn he blared that “prohibitionists bent on ending the world’s oldest profession” had “turned their guns upon Village Voice Media” and that “The First Amendment was shouted down in the name of children.”

Ortega even admitted that underage girls and boys were being trafficked thanks to the operation that provided his paychecks, insisting that it was only a “small number.”

He bragged in Village Voice that his bosses, Michael Lacey and James Larkin, were “smart enough to start Backpage.com.”

Not that smart, apparently—Larkin committed suicide in July before he could face trial and Lacey is facing charges that could put him in prison for the rest of his life.

The pair developed the New Times chain of alternative newspapers, starting with Phoenix New Times in 1970. They established Backpage in 2004, which earned a staggering $500 million during its 14 years of existence.

In 2018, the government shut down Backpage, and Lacey, Larkin and five Backpage executives were hit with 100 federal charges of facilitating prostitution, money laundering and conspiracy. The trial of Lacey and four of the former executives (one has since pled guilty) is currently underway in Phoenix.

The indictment states: “By 2008, Backpage was generating over $5 million in annual profit. This annual profit figure increased to over $10 million in 2009….Backpage’s annual profits grew to over $26 million in 2010, over $52 million in 2011, and over $78 million in 2012. These figures dwarfed the profits that VVMH’s [Village Voice Media Holdings] print publications were generating.”

In fact, Village Voice Media’s dying newspaper chain was kept alive by Backpage, which derived 93.4% of its revenue from advertising for prostitution, including ads selling children for sex.

Tony Ortega knew this well—the reason he became a hateful anti-Scientology blogger is that the Church’s role in exposing Backpage was threatening his salary. His obsession with Scientology—465 blog posts on The Village Voice website—led to his firing, but he walked off with two years’ payout as “hush money” and has written and said nothing about Backpage since.

Lacey and Larkin regularly received “bonuses” from Backpage bank accounts—$10 million each in 2014, for example.

They didn’t get to keep it, though. The government initially seized 26 properties, 89 bank accounts and 268 domain names as proceeds of criminal activities. A 2021 Government Accountability Office report estimated that $69.5 million to $75.8 million was seized from 70 accounts as well as an unknown amount from 53 other accounts, and $13.9 million to $16 million in cryptocurrency.

The GAO report stated: “Online marketing and communication platforms can enable sex trafficking—the commercial sexual exploitation of adults through force, fraud or coercion, or children under the age of 18…by making it easier for traffickers to exploit victims and connect with buyers.”

When federal agents raided Arizona homes owned by Lacey and Larkin, posh, pricey residences in upscale Paradise Valley and Sedona, they also seized jewelry, computers, valuable artwork and other items.

The indictment contains 48 counts of money laundering, which includes the use of bitcoin processing companies, converting Backpage proceeds into cryptocurrency, and a $16.5 million cash transfer to an account in a Hungarian bank.

The indictment sums it up: “Virtually every dollar flowing into Backpage’s coffers represented the proceeds of illegal activity.”