Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 1 of 84 Page ID #:1 1 2 3 4 5 6 7 8 9 10 11 NICOLA T. HANNA United States Attorney LAWRENCE S. MIDDLETON Assistant United States Attorney Chief, Criminal Division STEVEN R. WELK (Cal. State Bar No. 149886) Assistant United States Attorney Chief, Asset Forfeiture Section JOHN J. KUCERA (Cal. Bar No. 274184) Assistant United States Attorney Asset Forfeiture Section 1400 United States Courthouse 312 North Spring Street Los Angeles, California 90012 Telephone: (213) 894-3391 Facsimile: (213) 894-0142 E-mail: John.Kucera@usdoj.gov Attorneys for Plaintiff United States of America 12 13 UNITED STATES DISTRICT COURT 14 FOR THE CENTRAL DISTRICT OF CALIFORNIA 15 WESTERN DIVISION 16 17 18 19 UNITED STATES OF AMERICA, Plaintiff, v. VARIOUS INTERNET DOMAIN NAMES, 20 21 22 23 24 25 26 27 28 Defendants. No. CV 18-8592 VERIFIED COMPLAINT FOR FORFEITURE 18 U.S.C. §§ 981(a)(1)(A) & (C) [U.S.P.I.S.] Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 2 of 84 Page ID #:2 1 PERSONS AND ENTITIES................................................6 2 FUNDS HELD IN THE NAME OF POSTING SOLUTIONS:...................9 3 FUNDS HELD IN THE NAME OF CEREUS PROPERTIES LLC:...............9 4 ASSETS HELD BY OR FOR THE BENEFIT OF BY MICHAEL LACEY:.........9 5 ASSETS HELD BY OR FOR THE BENEFIT JAMES LARKIN:...............11 6 ASSETS HELD BY OR FOR THE BENEFIT OF JOHN BRUNST:.............13 7 ASSETS HELD BY OR FOR THE BENEFIT OF SCOTT SPEAR:.............14 8 FUNDS HELD IN THE NAME OF PRIMUS TRUST........................15 9 FUNDS HELD IN THE NAME OF GOLD LEAF SRO.......................15 10 FUNDS HELD IN THE NAME OF PROTECCTIO SRO......................15 11 FUNDS HELD IN THE NAME OF VARICOK COMPANY SRO.................15 12 FUNDS HELD IN THE NAME OF AD TECH BV..........................16 13 FUNDS HELD IN THE NAME OF PROCOP SERVICES BV..................16 14 FUNDS HELD IN THE NAME OF GULIETTA GROUP BV...................17 15 16 FUNDS HELD IN THE NAME OF UNIVERSADS BV.......................17 17 FUNDS HELD IN THE NAME OF CASHFLOWS EUROPE LIMITED............17 18 ASCIO/WMB INC DOMAIN NAMES....................................18 19 SURRENDERED DOMAIN NAMES......................................18 20 OTHER BACKPAGE SURRENDERED ASSETS.............................21 21 NATURE OF THE ACTION AND CLAIMS FOR RELIEF.........................23 22 JURISDICTION AND VENUE.............................................24 23 I. The Formation and Evolution of Backpage.......................26 24 II. The Sources and Manipulation of Backpage Criminal Proceeds....28 25 26 27 A. Backpage Promotion of Prostitution and Sex Trafficking...28 B. Payments for Advertising on Backpage.....................37 C. Bases for Forfeiture.....................................42 28 III. Assets Representing, Traceable To, and Involved In 2 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 3 of 84 Page ID #:3 1 Specified Unlawful Activity...................................43 2 A. 3 Account 1 (Prosperity ‘7188 Funds).......................43 CEREUS PROPERTIES ASSETS...........................................45 4 B. Account 2 (Compass ‘3873 Funds)..........................45 5 C. Account 3 (Compass ‘4862 Funds)..........................46 6 7 MICHAEL LACEY ASSETS...............................................46 D. Account 4 (FFS&L of SR ‘3620 Funds)......................46 E. Accounts 5-10 (RBA ‘2485, ‘1897, ‘3126, ‘8316, ‘8324, and ‘8332)...............................................46 10 F. Account 11 (SFFCU ‘2523 Funds)...........................47 11 G. Account 12 (IOLTA ‘4139).................................47 12 H. The Sebastopol Property..................................48 13 I. San Francisco, California Property 1.....................49 14 J. San Francisco Property 2.................................49 15 K. San Francisco Property 3.................................51 L. Sedona Property..........................................51 M. Paradise Valley Property 1...............................51 N. Paradise Valley Property 2...............................52 8 9 16 17 18 19 JAMES LARKIN ASSETS................................................52 20 O. Accounts 13, 15, 16, 17, AND 18 (RBA ‘1889, ‘2592, ‘1938, ‘1897, ‘8103, ‘8162, AND ‘8189)...................52 P. Accounts 19 AND 20 (PCTC ACCOUNT ‘0012 FUNDS, PERKINS COIE ‘0012)..............................................53 Q. Account 21 (ACF ‘2020)...................................54 25 R. Accounts 22 AND 23 (BA ‘8225 and ‘7054)..................55 26 S. Saint Helena Property....................................55 27 T. Chicago Property.........................................56 28 U. Paradise Valley Property 7...............................56 21 22 23 24 3 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 4 of 84 Page ID #:4 1 JOHN BRUNST ASSETS.................................................56 2 V. Account 24 (COMPASS BANK ‘3825)..........................56 3 W. Account 25, 26, 27, 28, 29, 30 (AB ‘6878, ‘4954, ‘7982, ‘7889, ‘7888 AND ‘6485)...........................57 4 5 SCOTT SPEAR ASSETS.................................................58 6 X. Accounts 31, 32, AND 33 (NBA ‘0178, ‘0151, and‘3645).....58 7 Y. Account 34 (Live Oak Bank Account ‘6910).................58 8 Z. Account 35 and 36 (Ascensus Broker Services ‘4301 and‘8001)................................................59 9 PRIMUS TRUST ASSETS................................................59 10 AA. Account 37 (K&H Bank Account ‘1210)......................59 11 AD TECH BV ASSETS..................................................60 12 13 14 BB. Accounts 56, 57, and 58 (Fio Bank ‘5803, ‘5801, and ’5805)...................................................60 CC. Accounts 47, 48, 49 and 50 (BF Accounts ‘K000 K, ‘K000 U, ‘K000 E, and ‘K001 K).................................61 15 16 17 18 GOLD LEAF SRO FUNDS HELD AT FIO BANK...............................61 DD. Account 38, 39, and 30 (Fio Bank ‘2226, ‘2231, and ‘2230)...................................................61 PROTECCTIO SRO FUNDS HELD AT FIO BANK..............................62 19 20 EE. Accounts 41, 42, and 43 (Fio Bank ‘4194, ‘4196, and ‘4198)...................................................62 21 VARICOK SRO FUNDS HELD AT FIO BANK.................................62 22 FF. 23 24 25 26 27 28 Accounts 44, 45, and 46 (Fio Bank ‘8083, ‘8086, and ‘8080)...................................................62 PROCOP SERVICES BV FUNDS HELD AT KNAB BANK.........................63 GG. Account 51 (KB ‘7664)....................................63 GULIETTA GROUP BV FUNDS HELD AT RABO BANK..........................64 HH. Accounts 52 and 53 (RB ‘2452 and ‘4721)..................64 CASHFLOWS EUROPE LTD FUNDS HELD FOR GULIETTA GROUP B.V., UNIVERSADS B.V., PROCOPSERVICES B.V. and PROTECCIO SRO........64 4 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 5 of 84 Page ID #:5 1 II. Account 55 (SP ‘1262)....................................64 2 JJ. Account 54 (LHVP ‘4431)..................................65 3 BACKPAGE-CONTROLLED DOMAIN NAMES...................................66 4 KK. ASCIO/WMB Inc Domain Names...............................66 5 LL. SURRENDERED DOMAIN NAMES.................................68 6 7 BACKPAGE SURRENDERED ASSETS........................................78 MM. Assets Surrendered To The United States By Backpage......78 NN. 9 BACKPAGE FUNDS PREVIOUSLY HELD AT DAVIS WRIGHT TREMAINE.................................................80 10 FIRST CLAIM FOR RELIEF.............................................81 11 (18 U.S.C. § 981(a)(1)(C)).........................................81 12 SECOND CLAIM FOR RELIEF............................................81 13 (18 U.S.C. § 981(a)(1)(A)).........................................81 14 THIRD CLAIM FOR RELIEF.............................................82 15 (18 U.S.C. § 981(a)(1)(A)).........................................82 8 16 VERIFICATION.......................................................84 17 18 19 20 21 22 23 24 25 26 27 28 5 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 6 of 84 Page ID #:6 1 2 The United States of America brings this complaint against the above-captioned asset(s) and alleges as follows: 3 4 5 6 PERSONS AND ENTITIES 1. The plaintiff is the United States of America (“plaintiff” or the “government”). 2. The defendants are atlantabackpage.com; backpage.be; 7 backpage.com; backpage.com.br; backpage.cz; backpage.dk; backpage.ee; 8 backpage.es; backpage.fi; backpage.fr; backpage.gr; backpage.hu; 9 backpage.ie; backpage.it; backpage.lt; backpage.mx; backpage.net; 10 backpage.no; backpage.pl; backpage.pt; backpage.ro; backpage.si; 11 backpage.sk; backpage.us; backpage-insider.com; bestofbackpage.com; 12 bestofbigcity.com; bigcity.com; chicagobackpage.com; 13 denverbackpage.com; newyorkbackpage.com; phoenixbackpage.com; 14 sandiegobackpage.com; seattlebackpage.com; tampabackpage.com; 15 admoderation.com; admoderators.com; adnet.ws; adplace24.com; 16 adplaces24.com; adpost24.com; adpost24.cz; adquick365.com; 17 adreputation.com; ads-posted-mp.com; adsplace24.com; adspot24.com; 18 adspots24.com; adsspot24.com; adtechbv.co.nl; adtechbv.com; 19 adtechbv.nl; advert-ep.com; adverts-mp.com; axme.com; back0age.com; 20 backpa.ge; backpaee.com; backpage-insider.com; backpage.adult; 21 backpage.ae; backpage.at; backpage.ax; backpage.be; backpage.bg; 22 backpage.bg; backpage.ca; backpage.cl; backpage.cn; backpage.cn; 23 backpage.co.id; backpage.co.nl; backpage.co.nl; backpage.co.nz; 24 backpage.co.uk; backpage.co.ve; backpage.co.za; backpage.com; 25 backpage.com.ar; backpage.com.au; backpage.com.ph; backpage.cz; 26 backpage.dk; backpage.ec; backpage.ee; backpage.ee; backpage.es; 27 backpage.fi; backpage.fi; backpage.fr; backpage.fr; backpage.gr; 28 backpage.gr; backpage.hk; backpage.hk; backpage.hu; backpage.hu; 6 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 7 of 84 Page ID #:7 1 backpage.ie; backpage.in; backpage.it; backpage.jp; backpage.kr; 2 backpage.lt; backpage.lv; backpage.lv; backpage.me; backpage.mx; 3 backpage.my; backpage.net; backpage.nl; backpage.no; backpage.no; 4 backpage.nz; backpage.pe; backpage.ph; backpage.pk; backpage.pl; 5 backpage.porn; backpage.pt; backpage.ro; backpage.ro; backpage.se; 6 backpage.sex; backpage.sg; backpage.si; backpage.si; backpage.sk; 7 backpage.sk; backpage.sucks; backpage.tw; backpage.uk; 8 backpage.uk.com; backpage.us; backpage.vn; backpage.xxx; 9 backpage.xyz; backpagecompimp.com; backpagecompimps.com; 10 backpagepimp.com; backpagepimps.com; backpagg.com; backpagm.com; 11 backpagu.com; backpaoe.com; backpawe.com; backqage.com; backrage.com; 12 backxage.com; bakkpage.com; bcklistings.com; bestofbackpage.com; 13 bestofbigcity.com; bickpage.com; bigcity.com; bpclassified.com; 14 bpclassifieds.com; carlferrer.com; clasificadosymas.com; 15 clasificadosymas.net; clasificadosymas.org; 16 classifiedsolutions.co.uk; classifiedsolutions.net; 17 classyadultads.com; columbusbackpage.com; connecticutbackpage.com; 18 cracker.co.id; cracker.com; cracker.com.au; cracker.id; 19 cracker.net.au; crackers.com.au; crackers.net.au; ctbackpage.com; 20 dallasbackpage.com; denverbackpage.com; easypost123.com; 21 easyposts123.com; emais.com.pt; evilempire.com; ezpost123.com; 22 fackpage.com; fastadboard.com; guliettagroup.nl; htpp.org; 23 ichold.com; internetspeechfoundation.com; 24 internetspeechfoundation.org; loads2drive.com; loadstodrive.com; 25 loadtodrive.com; losangelesbackpage.com; mediafilecloud.com; 26 miamibackpage.com; minneapolisbackpage.com; mobileposting.com; 27 mobilepostings.com; mobilepostlist.com; mobilposting.com; naked.city; 28 nakedcity.com; newyorkbackpage.com; paidbyhour.com; petseekr.com; 7 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 8 of 84 Page ID #:8 1 petsfindr.com; phoenixbackpage.com; posteasy123.com; postfaster.com; 2 postfastly.com; postfastr.com; postonlinewith.com; postonlinewith.me; 3 postseasy123.com; postsol.com; postszone24.com; postzone24.com; 4 postzones24.com; rentseekr.com; results911.com; sandiegobackpage.com; 5 sanfranciscobackpage.com; seattlebackpage.com; sellyostuffonline.com; 6 sfbackpage.com; simplepost24.com; simpleposts24.com; svc.ws; 7 truckrjobs.com; ugctechgroup.com; universads.nl; 8 villagevoicepimps.com; websitetechnologies.co.uk; 9 websitetechnologies.com; websitetechnologies.net; 10 websitetechnologies.nl; websitetechnologies.org; weprocessmoney.com; 11 wst.ws; xn--yms-fla.com; ymas.ar.com; ymas.br.com; ymas.br.com; 12 ymas.bz; ymas.bz; ymas.cl; ymas.cl; ymas.co.bz; ymas.co.bz; 13 ymas.co.cr; ymas.co.cr; ymas.co.ni; ymas.co.ni; ymas.co.ve; 14 ymas.co.ve; ymas.com; ymas.com.br; ymas.com.br; ymas.com.bz; 15 ymas.com.bz; ymas.com.co; ymas.com.co; ymas.com.do; ymas.com.do; 16 ymas.com.ec; ymas.com.ec; ymas.com.es; ymas.com.es; ymas.com.gt; 17 ymas.com.gt; ymas.com.hn; ymas.com.hn; ymas.com.mx; ymas.com.ni; 18 ymas.com.ni; ymas.com.pe; ymas.com.pe; ymas.com.pr; ymas.com.pr; 19 ymas.com.pt; ymas.com.uy; ymas.com.uy; ymas.com.ve; ymas.com.ve; 20 ymas.cr; ymas.cr; ymas.do; ymas.do; ymas.ec; ymas.ec; ymas.es; 21 ymas.es; ymas.org; ymas.pe; ymas.pe; ymas.pt; ymas.us; ymas.us; 22 ymas.uy; ymas.uy; and ymas.uy.com (collectively, the “Defendant 23 Assets”). 24 3. The Defendant Assets are held in the names of Backpage.com. 25 4. Contemporaneously with the filing of this complaint, 26 plaintiff is filing related actions seeking the civil forfeiture of 27 the following assets (collectively, the “Subject Assets”): 28 8 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 9 of 84 Page ID #:9 1 2 FUNDS HELD IN THE NAME OF POSTING SOLUTIONS: a. $3,374,918.61 seized from Prosperity Bank account ‘7188 3 (“Prosperity ‘7188 Funds” or “Account 1”) held in the name of Posting 4 Solutions, LLC. 5 6 1 FUNDS HELD IN THE NAME OF CEREUS PROPERTIES LLC: b. $5,462,027.17 seized from Compass Bank account ‘3873 7 (“Compass ‘3873 Funds” or “Account 2”), held in the name of Cereus 8 Properties, LLC, an entity owned or controlled by Scott Spear. 9 c. $407,686.14 seized from Compass Bank account ‘4862 10 (“Compass ‘4862 Funds” or “Account 3”), held in the name of Cereus 11 Properties, LLC. 12 13 ASSETS HELD BY OR FOR THE BENEFIT OF BY MICHAEL LACEY: d. $689,884.48 seized from First Federal Savings & Loan of San 14 Rafael account ‘3620 (“FFS&L of SR ‘3620 Funds” or “Account 4”), held 15 in the name of Michael Lacey (“Lacey”); 16 17 18 19 20 21 22 23 e. $515,899.85 seized from Republic Bank of Arizona account ‘2485 (“RBA ‘2485 Funds” or “Account 5”), held in the name of Lacey; f. $75,835.31 seized from Republic Bank of Arizona account ‘1897 (“RBA ‘1897 Funds” or “Account 6”), held in the name of Lacey; g. $500,000.00 seized from Republic Bank of Arizona account ‘3126 (“RBA ‘3126 Funds” or “Account 7”), held in the name of Lacey; h. $600,000.00 seized from or frozen in Republic Bank of Arizona Certificate of Deposit (“CDARS”) 2 account’8316 (“RBA ‘8316 24 25 26 27 28 1 Attached hereto as exhibit A is an index of the Subject Assets that consist of funds or securities on deposit at or seized from financial institutions. 2 CDARS is a program that allows a depositor to spread funds across several banks in order to maintain account balances below the Federal Deposit Insurance Corporation’s insurance limits at any particular bank. 9 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 10 of 84 Page ID #:10 1 2 Funds” or “Account 8”), held in the name of Lacey; i. $302,177.57 seized from or frozen in Republic Bank of 3 Arizona CDARS account ‘8324 (“RBA ‘8324 Funds” or “Account 9”), held 4 in the name of Lacey; 5 j. $300,000.00 seized from or frozen in Republic Bank of 6 Arizona CDARS account ‘8332 (“RBA ‘8332 Funds” or “Account 10”), held 7 in the name of Lacey; 8 9 10 11 k. $734,603.70 seized from or frozen in Credit Union account ‘2523 (“SFFCU ‘2523 Funds” or “Account 11”), held in the name of Lacey; l. $2,412,785.47 seized from or frozen in place at Money Gram, 12 having originated from Midfirst Bank account ‘4139 (“IOLTA 3 ‘4139” or 13 Account 12), held in the name of attorney, “J.B.” for the benefit of 14 Lacey; 15 m. All right and title to the real property located in 16 Sebastopol, California titled in the name of Finca Manzana for 17 Sebastopol, LLC (“Sebastopol Property”), APN 076-100-0008-000, 18 including all appurtenances, improvements, and attachments thereon, 19 as well as all leases, rents, and profits derived therefrom; 20 n. 4 All right and title to the real property located in San 21 Francisco, California titled in the name of Lacey and Alyson Talley 22 (“San Francisco Property 1”), APN 07-1008-057-01, including all 23 appurtenances, improvements, and attachments thereon, as well as all 24 leases, rents, and profits derived therefrom; 25 o. All right and title to the real property located in San 26 27 28 3 An “IOLTA” is the common name for an Interest on Lawyer Trust Account. 4 Pursuant to Local Rule 5.2-1, only the city and state of residence addresses are set forth in this Complaint 10 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 11 of 84 Page ID #:11 1 Francisco, California titled in the name of 2 Francisco, LLC (“San Francisco Property 2”), APN 0563-029, including 3 all appurtenances, improvements, and attachments thereon, as well as 4 all leases, rents, and profits derived therefrom; 5 p. Casa Bahia for San All right and title to the real property located in San 6 Francisco, California titled in the name of Lacey (“San Francisco 7 Property 3”), APN 0097C011, including all appurtenances, 8 improvements, and attachments thereon, as well as all leases, rents, 9 and profits derived therefrom; 10 q. All right and title to the real property located in Sedona, 11 Arizona titled in the name of Creek Hideaway, LLC (“Sedona 12 Property”), APN 405-06-001B, including all appurtenances, 13 improvements, and attachments thereon, as well as all leases, rents, 14 and profits derived therefrom; 15 r. All right and title to the real property located in 16 Paradise Valley, Arizona titled in the name of Lacey (“Paradise 17 Valley Property 1”), APN 173-11-006C, including all appurtenances, 18 improvements, and attachments thereon, as well as all leases, rents, 19 and profits derived therefrom; 20 s. All right and title to the real property located in 21 Paradise Valley, Arizona titled in the name of Lacey (“Paradise 22 Valley Property 2”), APN 164-05-122, including all appurtenances, 23 improvements, and attachments thereon, as well as all leases, rents, 24 and profits derived therefrom; 25 26 ASSETS HELD BY OR FOR THE BENEFIT JAMES LARKIN: t. $1,546,076.35 seized from Republic Bank of Arizona account 27 ‘1889 (“RBA ‘1889 Funds” or “Account 13”), held in the name of James 28 Larkin (“Larkin”); 11 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 12 of 84 Page ID #:12 1 u. $1,001,731.18 seized from Republic Bank of Arizona account 2 ‘2592 (“RBA ‘2592 Funds” or “Account 14”), held in the name of 3 Larkin; 4 v. $206,156.00 seized from Republic Bank of Arizona account 5 ‘1938 (“RBA ‘1938 Funds” or “Account 15”), held in the name of 6 Larkin; 7 w. $501,248.14 seized from Republic Bank of Arizona account 8 ‘8103 (“RBA ‘8103 Funds” or “Account 16”), held in the name of 9 Larkin; 10 x. 11 12 $251,436 seized from Republic Bank of Arizona account ‘8162 (“RBA ‘8162 Funds” or “Account 17”), held in the name of Larkin; y. Any and all funds on deposit in Republic Bank of Arizona 13 account ‘8189 (“RBA ‘8189 Funds” or “Account 18”), held in the name 14 of Larkin. 15 time RBA will issue a check to the government for all funds in 16 Account 18; 17 z. RBA is holding the account until it matures, at which $621,832.06 in U.S. currency seized from Perkins Coie Trust 18 Company account ‘0012 (“PCTC ‘0012 Funds” or “Account 19”), held in 19 the name of Margaret Larkin (“M. Larkin”); 20 aa. $9,882,828.72 in securities or investment instruments 21 seized from Perkins Coie Trust Company account ‘0012 (“PCTC 22 Investment Funds” or “Account 20”), held in the name of M. Larkin; 23 bb. $34,149,280.00 seized from Acacia Conservation Fund LP 24 account ‘2020 (“ACF Funds” or “Account 21”), held in the name of 25 Ocotillo Family Trust; 26 cc. $278.73 seized from Bank of America account ‘8225 (“BA 27 ‘8225 Funds” or “Account 22”), held in the name of Troy C. Larkin 28 (“T. Larkin”); 12 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 13 of 84 Page ID #:13 1 dd. $1,038.42 seized from Bank of America account ‘7054 (“BA 2 ‘7054 Funds” or “Account 23”), held in the name Ramon Larkin (“R. 3 Larkin”); 4 ee. All right and title to the real property located in Saint 5 Helena, California titled in the name of Larkin and M. Larkin, 6 Trustees for Ocotillo Family Trust (“Saint Helena Property”), APN 7 030-050-028-000, including all appurtenances, improvements, and 8 attachments thereon, as well as all leases, rents, and profits 9 derived therefrom; 10 ff. All right and title to the real property located in 11 Chicago, Illinois titled in the name of John C. Larkin (“J.C. 12 Larkin”), M. Larkin and Larkin (“Chicago Property”), APN 20-14-201- 13 079-1054, including all appurtenances, improvements, and attachments 14 thereon, as well as all leases, rents, and profits derived therefrom; 15 ASSETS HELD BY OR FOR THE BENEFIT OF JOHN BRUNST: 16 gg. $359,527.06 seized from Compass Bank account number ‘3825 17 (“Compass ‘3825 Funds” or “Account 24”), held in the name of the John 18 Brunst Family Trust; 19 hh. $5,848,729.00 seized from Alliance Bernstein account ‘6878 20 (“AB ‘6878 Funds” or “Account 25”), held in the name of the Brunst 21 Family Trust; 22 ii. $372,878.00 seized from Alliance Bernstein account ‘4954 23 (“AB ‘4954 Funds” or “Account 26”), held in the name of the Brunst 24 Family Trust; 25 jj. $342,596.00 seized from Alliance Bernstein account ‘7982 26 (“AB ‘7892 Funds” or “Account 27”), held in the name of the Brunst 27 Family Trust; 28 kk. $306,277.00 seized from Alliance Bernstein account ‘7889 13 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 14 of 84 Page ID #:14 1 (“AB ‘7889 Funds” or “Account 28”), held in the name of the Brunst 2 Family Trust; 3 ll. $275,328.00 seized from Alliance Bernstein account ‘7888 4 (“AB ‘7888 Funds” or “Account 29”), held in the name of the Brunst 5 Family Trust; 6 mm. $527,624.00 seized from Alliance Bernstein account ‘6485 7 (“AB ‘6485 Funds” or “Account 30”), held in the name of the Brunst 8 Family Trust; 9 10 ASSETS HELD BY OR FOR THE BENEFIT OF SCOTT SPEAR: nn. $404,374.12 seized from National Bank of Arizona account 11 ‘0178 (“NBA ‘0178 Funds” or “Account 31”), held in the name of Scott 12 Spear (“Spear”); 13 oo. $1,925.80 seized from National Bank of Arizona account 14 ‘0151 (“NBA ‘0151 Funds” or “Account 32”), held in the name of Spear 15 and Ellona Spear (“E. Spear”); and 16 pp. $613,573.28 seized from National Bank of Arizona account 17 ‘3645 (“NBA ‘3645 Funds” or “Account 33”), held in the name of Spear 18 and E. Spear Family Trust. 19 qq. $260,283.40 seized from National Bank of Arizona account 20 ‘6910 (“NBA ‘6910 Funds” or “Account 34”), held in the name of Spear 21 and E. Spear Family Trust. 22 rr. $64,552.82 seized from or frozen in Ascensus Broker 23 Services ‘4301 (“ABS ‘4301 Funds” or “Account 35”), held in the name 24 of Natasha Spear (“N. Spear”). 25 ss. $56,902.99 seized from or frozen in Ascensus Broker 26 Services ‘8001 (“ABS ‘8001 Funds” or “Account 36”), held in the name 27 of N. Spear. 28 14 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 15 of 84 Page ID #:15 1 2 FUNDS HELD IN THE NAME OF PRIMUS TRUST tt. $16,500,000 seized from K&H account ‘1210 (“K&H ‘1210 3 Funds” or “Account 37”), held in the name of Primus Trust, with Lacey 4 being at least one of the beneficiaries of the Trust. 5 located in Hungary. 6 7 The bank is FUNDS HELD IN THE NAME OF GOLD LEAF SRO uu. €1,680,028.85 seized from Fio account ‘2226 (“Fio ‘2226 8 Funds” or “Account 38”), held in the name of the Gold Leaf SRO. 9 bank is located in the Czech Republic; 10 vv. £60.98 seized from Fio account ‘2231 (“Fio ‘2231 Funds” or 11 “Account 39”), held in the name of the Gold Leaf SRO. 12 located in the Czech Republic; 13 ww. “Account 40”), held in the name of the Gold Leaf SRO. 15 located in the Czech Republic; 17 The bank is $72.87 seized from Fio account ‘2230 (“Fio ‘2230 Funds” or 14 16 The bank is FUNDS HELD IN THE NAME OF PROTECCTIO SRO xx. €3,213,937.82 seized from Fio account ‘4194 (“Fio ‘4194 18 Funds” or “Account 41”), held in the name of the Protecctio SRO. 19 bank is located in the Czech Republic; 20 yy. “Account 42”), held in the name of the Protecctio SRO. 22 located in the Czech Republic; zz. “Account 43”), held in the name of the Protecctio SRO. 25 located in the Czech Republic; 27 28 The bank is £52.65 seized from Fio account ‘4198 (“Fio ‘4198 Funds” or 24 26 The $52.90 seized from Fio account ‘4196 (“Fio ‘4196 Funds” or 21 23 The The bank is FUNDS HELD IN THE NAME OF VARICOK COMPANY SRO aaa. €605,976.95 seized from Fio account ‘8083 (“Fio ‘8083 Funds” or “Account 44”), held in the name of the Varicok Company SRO. 15 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 16 of 84 Page ID #:16 1 2 The bank is located in the Czech Republic; bbb. £458.99 seized from Fio account ‘8086 (“Fio ‘8086 Funds” or 3 “Account 45”), held in the name of the Varicok Company SRO. 4 is located in the Czech Republic; The bank 5 ccc. $48.10 seized from Fio account ‘8080 (“Fio ‘8080 Funds” or 6 “Account 46”), held in the name of the Varicok Company SRO. The bank 7 is located in the Czech Republic. 8 9 FUNDS HELD IN THE NAME OF AD TECH BV ddd. Any and all funds seized from Bank Frick account ‘K000 K 10 (“BF ‘K000 K Funds” or “Account 47”) on or about June 1, 2018, held 11 in the name of Ad Tech BV. 12 of Liechtenstein; 13 The bank is located in the Principality eee. Any and all funds seized from Bank Frick account ‘K000 U 14 (“BF ‘K000 U Funds” or “Account 48”) on or about June 1, 2018, held 15 in the name of Ad Tech BV. 16 of Liechtenstein; 17 The bank is located in the Principality fff. Any and all funds seized from Bank Frick account ‘K000 E 18 (“BF ‘K000 E Funds” or “Account 49”) on or about June 1, 2018, held 19 in the name of Ad Tech BV. 20 of Liechtenstein; 21 The bank is located in the Principality ggg. Any and all funds seized from Bank Frick account ‘K001 K 22 (“BF ‘K001 K Funds” or “Account 50”) on or about June 1, 2018, held 23 in the name of Ad Tech BV. 24 of Liechtenstein. 25 26 The bank is located in the Principality FUNDS HELD IN THE NAME OF PROCOP SERVICES BV hhh. Any and all funds seized from Knab Bank account ‘7664 (“KB 27 ‘7664 Funds” or “Account 51”) on or about May 24, 2018, held in the 28 name of Procop Services BV. The bank is located in the Kingdom of 16 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 17 of 84 Page ID #:17 1 2 3 the Netherlands. FUNDS HELD IN THE NAME OF GULIETTA GROUP BV iii. Any and all funds seized from Rabo Bank account ‘2452 (“RB 4 ‘2452 Funds” or “Account 52”) on or about May 24, 2018, held in the 5 name of the Gulietta Group BV. 6 the Netherlands. 7 8 9 FUNDS HELD IN THE NAME OF UNIVERSADS BV jjj. Any and all funds seized from Rabo Bank account ‘4721 (“RB ‘4721 Funds” or “Account 53”) on or about May 24, 2018, held in the 10 name of the UniversAds BV. 11 Netherlands. 12 13 The bank is located in the Kingdom of The bank is located in the Kingdom of the FUNDS HELD IN THE NAME OF OLIST OU kkk. Any and all funds seized from LHV Pank account number ‘4431 14 (“LHVP ‘4431 Funds” or “Account 54”) on or about June 15, 2018, held 15 in the name of Olist Ou (“Ou”). 16 of Estonia. 17 18 The bank is located in the Republic FUNDS HELD IN THE NAME OF CASHFLOWS EUROPE LIMITED lll. £747,664.15 seized from Saxo Payments account ‘1262 (“SP 19 ‘1262 Funds” or “Account 55”), held in the name of the Cashflows 20 Europe Limited (“Cashflows”). 21 the benefit of Gulietta Group B.V., Universads B.V, Procop Services 22 B.V., and Proteccio SRO, each of which is an entity owned or 23 controlled by Backpage (defined below). 24 enforcement officials have restrained the funds held by these four 25 companies and consolidated them into this Saxo Payments account. The 26 bank is located in the United Kingdom. Cashflows is holding these funds for 27 28 17 United Kingdom law Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 18 of 84 Page ID #:18 1 2 ASCIO/WMB INC DOMAIN NAMES 5 mmm. atlantabackpage.com; backpage.be; backpage.com; 3 backpage.com.br; backpage.cz; backpage.dk; backpage.ee; backpage.es; 4 backpage.fi; backpage.fr; backpage.gr; backpage.hu; backpage.ie; 5 backpage.it; backpage.lt; backpage.mx; backpage.net; backpage.no; 6 backpage.pl; backpage.pt; backpage.ro; backpage.si; backpage.sk; 7 backpage.us; backpage-insider.com; bestofbackpage.com; 8 bestofbigcity.com; bigcity.com; chicagobackpage.com; 9 denverbackpage.com; newyorkbackpage.com; 10 phoenixbackpage.com;sandiegobackpage.com;seattlebackpage.com; and 11 tampabackpage.com (collectively, the “Seized Domain Names”), and all 12 rights and privileges associated therewith. 13 14 SURRENDERED 6 DOMAIN NAMES nnn. admoderation.com; admoderators.com; adnet.ws; 15 adplace24.com; adplaces24.com; adpost24.com; adpost24.cz; 16 adquick365.com; adreputation.com; ads-posted-mp.com; adsplace24.com; 17 adspot24.com; adspots24.com; adsspot24.com; adtechbv.co.nl; 18 adtechbv.com; adtechbv.nl; advert-ep.com; adverts-mp.com; axme.com; 19 back0age.com; backpa.ge; backpaee.com; backpage-insider.com; 20 backpage.adult; backpage.ae; backpage.at; backpage.ax; backpage.be; 21 backpage.bg; backpage.bg; backpage.ca; backpage.cl; backpage.cn; 22 23 24 25 26 27 28 5 Backpage, which operated principally online, controlled numerous internet domain names. These domain names were registered by “ASCIO TECHNOLOGIES INC” DBA “NETNAMES,” a domain registrar. Domain registrars serve to ensure that a registered domain name is not licensed to more than one user. Domain registration allows the owner of the domain to direct internet traffic to a specific webserver. 6 On April 5, 2018, in the District of Arizona, Backpage.com, LLC and related entities plead guilty to 18 U.S.C. § 1956(h) (money laundering conspiracy). Pursuant to its guilty plea, Backpage surrendered certain assets, including those identified herein. 18 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 19 of 84 Page ID #:19 1 backpage.cn; backpage.co.id; backpage.co.nl; backpage.co.nl; 2 backpage.co.nz; backpage.co.uk; backpage.co.ve; backpage.co.za; 3 backpage.com; backpage.com.ar; backpage.com.au; backpage.com.ph; 4 backpage.cz; backpage.dk; backpage.ec; backpage.ee; backpage.ee; 5 backpage.es; backpage.fi; backpage.fi; backpage.fr; backpage.fr; 6 backpage.gr; backpage.gr; backpage.hk; backpage.hk; backpage.hu; 7 backpage.hu; backpage.ie; backpage.in; backpage.it; backpage.jp; 8 backpage.kr; backpage.lt; backpage.lv; backpage.lv; backpage.me; 9 backpage.mx; backpage.my; backpage.net; backpage.nl; backpage.no; 10 backpage.no; backpage.nz; backpage.pe; backpage.ph; backpage.pk; 11 backpage.pl; backpage.porn; backpage.pt; backpage.ro; backpage.ro; 12 backpage.se; backpage.sex; backpage.sg; backpage.si; backpage.si; 13 backpage.sk; backpage.sk; backpage.sucks; backpage.tw; backpage.uk; 14 backpage.uk.com; backpage.us; backpage.vn; backpage.xxx; 15 backpage.xyz; backpagecompimp.com; backpagecompimps.com; 16 backpagepimp.com; backpagepimps.com; backpagg.com; backpagm.com; 17 backpagu.com; backpaoe.com; backpawe.com; backqage.com; backrage.com; 18 backxage.com; bakkpage.com; bcklistings.com; bestofbackpage.com; 19 bestofbigcity.com; bickpage.com; bigcity.com; bpclassified.com; 20 bpclassifieds.com; carlferrer.com; clasificadosymas.com; 21 clasificadosymas.net; clasificadosymas.org; 22 classifiedsolutions.co.uk; classifiedsolutions.net; 23 classyadultads.com; columbusbackpage.com; connecticutbackpage.com; 24 cracker.co.id; cracker.com; cracker.com.au; cracker.id; 25 cracker.net.au; crackers.com.au; crackers.net.au; ctbackpage.com; 26 dallasbackpage.com; denverbackpage.com; easypost123.com; 27 easyposts123.com; emais.com.pt; evilempire.com; ezpost123.com; 28 fackpage.com; fastadboard.com; guliettagroup.nl; htpp.org; 19 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 20 of 84 Page ID #:20 1 ichold.com; internetspeechfoundation.com; 2 internetspeechfoundation.org; loads2drive.com; loadstodrive.com; 3 loadtodrive.com; losangelesbackpage.com; mediafilecloud.com; 4 miamibackpage.com; minneapolisbackpage.com; mobileposting.com; 5 mobilepostings.com; mobilepostlist.com; mobilposting.com; naked.city; 6 nakedcity.com; newyorkbackpage.com; paidbyhour.com; petseekr.com; 7 petsfindr.com; phoenixbackpage.com; posteasy123.com; postfaster.com; 8 postfastly.com; postfastr.com; postonlinewith.com; postonlinewith.me; 9 postseasy123.com; postsol.com; postszone24.com; postzone24.com; 10 postzones24.com; rentseekr.com; results911.com; sandiegobackpage.com; 11 sanfranciscobackpage.com; seattlebackpage.com; sellyostuffonline.com; 12 sfbackpage.com; simplepost24.com; simpleposts24.com; svc.ws; 13 truckrjobs.com; ugctechgroup.com; universads.nl; 14 villagevoicepimps.com; websitetechnologies.co.uk; 15 websitetechnologies.com; websitetechnologies.net; 16 websitetechnologies.nl; websitetechnologies.org; weprocessmoney.com; 17 wst.ws; xn--yms-fla.com; ymas.ar.com; ymas.br.com; ymas.br.com; 18 ymas.bz; ymas.bz; ymas.cl; ymas.cl; ymas.co.bz; ymas.co.bz; 19 ymas.co.cr; ymas.co.cr; ymas.co.ni; ymas.co.ni; ymas.co.ve; 20 ymas.co.ve; ymas.com; ymas.com.br; ymas.com.br; ymas.com.bz; 21 ymas.com.bz; ymas.com.co; ymas.com.co; ymas.com.do; ymas.com.do; 22 ymas.com.ec; ymas.com.ec; ymas.com.es; ymas.com.es; ymas.com.gt; 23 ymas.com.gt; ymas.com.hn; ymas.com.hn; ymas.com.mx; ymas.com.ni; 24 ymas.com.ni; ymas.com.pe; ymas.com.pe; ymas.com.pr; ymas.com.pr; 25 ymas.com.pt; ymas.com.uy; ymas.com.uy; ymas.com.ve; ymas.com.ve; 26 ymas.cr; ymas.cr; ymas.do; ymas.do; ymas.ec; ymas.ec; ymas.es; 27 ymas.es; ymas.org; ymas.pe; ymas.pe; ymas.pt; ymas.us; ymas.us; 28 ymas.uy; ymas.uy; and ymas.uy.com (collectively, the “Surrendered 20 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 21 of 84 Page ID #:21 1 2 3 Domain Names”), and all rights and privileges associated therewith. OTHER BACKPAGE SURRENDERED ASSETS ooo. $699,940.00 surrendered on or about April 6, 2018, from ING 4 Bank account ‘7684, (“ING ‘7684 Funds”), held in the name of Payment 5 Solutions BV. 6 ppp. $106,988.41 surrendered on or about April 6, 2018, from ING 7 Bank account ‘2071 (“ING ‘2071 Funds”), held in the name of Payment 8 Solutions BV. 9 qqq. $499,910.01 surrendered on or about April 6, 2018, from US 10 Bank account ‘0239 (“US Bank ‘2039 Funds”), held in the name of 11 Affordable Bail Bonds LLC. 12 rrr. $50,000.00 surrendered on or about April 6, 2018, from 13 Enterprise Bank and Trust account ‘7177 (“EBT ‘7177 Funds”), held in 14 the name of Global Trading Solutions LLC. 15 sss. $1,876.36 surrendered on or about August 23, 2018, from ING 16 Bank account ‘2071 (“ING ‘2071 Funds”), held in the name of Payment 17 Solutions BV. 18 ttt. $50,357.35 surrendered on or about August 24, 2018, from 19 ING Bank account ‘7684 (“ING ‘7684 Funds”), held in the name of 20 Payment Solutions BV. 21 uuu. $248,970.00 surrendered on or about May 11, 2018, from 22 Citibank NA, account ‘0457 (“Citibank NA ‘0457 Funds”), held in the 23 name of Paul Hastings LLP. 24 vvv. $52,500.00 surrendered on or about June 25, 2018, from 25 Enterprise Bank and Trust account ‘7177 (“EBT ‘7177 Funds”), held in 26 the name of Global Trading Solutions LLC. 27 www. $65,000.00 surrendered on or about July 18, 2018, from 28 Enterprise Bank and Trust account ‘7177 (“EBT ‘7177 Funds”), held in 21 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 22 of 84 Page ID #:22 1 the name of Global Trading Solutions LLC. 2 xxx. $5,534.54 surrendered on or about August 9, 2018, from 3 Enterprise Bank and Trust account ‘7177 (“EBT ‘7177 Funds”), held in 4 the name of Global Trading Solutions LLC. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 yyy. $40,000.00 surrendered on or about July 16, 2018, from Crypto Capital zzz. 6 Bitcoins surrendered on or about April 6, 2018, from a Backpage controlled wallet; aaaa. 199.99995716 Bitcoins surrendered on or about April 6, 2018, from a Backpage controlled wallet; bbbb. 404.99984122 Bitcoins surrendered on or about April 6, 2018, from a Backpage controlled wallet; cccc. 173.97319 Bitcoins surrendered on or about April 26, 2018, from a Backpage controlled wallet; dddd. 411.00019 Bitcoins surrendered on or about April 13, 2018, from a Backpage controlled wallet; eeee. 2.00069333 Bitcoins surrendered on or about May 7, 2018, from a Backpage controlled wallet; ffff. 136.6544695 Bitcoins surrendered on or about June 15, 2018, from a Backpage controlled wallet; gggg. 2,673.59306905 Bitcoins Cash surrendered on or about April 26, 2018, from a Backpage controlled wallet; hhhh. 55.5 Bitcoins Cash surrendered on or about May 3, 2018, from a Backpage controlled wallet; iiii. 73.62522241 Bitcoins Cash surrendered on or about June 15, 2018, from a Backpage controlled wallet; jjjj. 16,310.79413202 Litecoins surrendered on or about April 26, 2018, from a Backpage controlled wallet; 22 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 23 of 84 Page ID #:23 1 2 3 4 5 kkkk. 783.9735116 Litecoins surrendered on or about June 15, 2018, from a Backpage controlled wallet; llll. 509.81904619 Bitcoins Gold surrendered on or about June 21, 2018, from a Backpage controlled wallet; and mmmm. $3,713,121.03 surrendered on or about August 13, 2018, 6 from Bank of America account ‘3414, held in the name of Davis Wright 7 Tremaine, LLP. 8 9 NATURE OF THE ACTION AND CLAIMS FOR RELIEF 5. This is a civil action in rem to forfeit assets derived 10 from or traceable to proceeds of one or more crimes defined as 11 “specified unlawful activity” (“SUA”); and/or involved in one or more 12 conspiracies to launder money, internationally launder money for 13 promotion of one or more SUA, and/or financial transactions involving 14 illicit proceeds. 15 the United States and abroad, including the Country of Hungary, the 16 Czech Republic, the Principality of Liechtenstein, and the Kingdom of 17 the Netherlands. 18 6. The property sought for forfeiture is located in The Subject Assets, including the Defendant Assets, 19 represent property derived from or traceable to proceeds to multiple 20 knowing violations of federal laws constituting SUA, including 18 21 U.S.C. §§ 1591 (Sex Trafficking of Children) and 1952 (Interstate and 22 Foreign Travel in Aid of Racketeering Enterprise). 23 Assets are therefore subject to forfeiture pursuant to 18 U.S.C. § 24 981(a)(1)(C). 25 7. The Defendant Further, the Subject Assets, including the Defendant 26 Assets, represent property involved in or traceable to one or more 27 transactions or attempted transactions in violation of: 28 a. 18 U.S.C. § 1956(a)(1)(B)(i) (Money Laundering for 23 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 24 of 84 Page ID #:24 1 Concealment) and a conspiracy to commit such offenses, in violation 2 of 18 U.S.C. § 1956(h); 3 b. 18 U.S.C. § 1956(a)(2) (International Money Laundering for 4 Promotion) and a conspiracy to commit such offenses, in violation of 5 18 U.S.C. § 1956(h); and 6 c. 18 U.S.C. § 1957 (Monetary Transactions with Proceeds of 7 SUA) and a conspiracy to commit such offenses, in violation of 18 8 U.S.C. § 1956(h) 9 The Defendant Assets are therefore subject to forfeiture pursuant to 10 18 U.S.C. § 981(a)(1)(A). 11 12 13 14 15 16 JURISDICTION AND VENUE 8. This civil forfeiture action is brought pursuant to 18 U.S.C. § 981(a)(1). 9. This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1345 and 1355. 10. Venue lies in this district pursuant to 28 U.S.C. §§ 17 1355(b)(1)(A) or 1355(b)(2) because acts and omissions giving rise to 18 the forfeiture took place in the Central District of California 19 and/or 28 U.S.C. § 1395(b), because certain of the Subject Assets are 20 located in the Central District of California. 21 22 INDIVIDUALS AND ENTITIES 11. Backpage.com, LLC, (“Backpage”) incorporated in Delaware in 23 2004, was an internet-based company that allowed customers to post 24 on-line classified advertisements. 25 in a variety of categories, including adult, automotive, community, 26 dating, jobs, local places, musicians, rentals and services. 27 to its closure by federal law enforcement authorities in April 2018, 28 Backpage was visited by 75 to 100 million unique internet visitors 24 These advertisements were posted Prior Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 25 of 84 Page ID #:25 1 2 per month. 12. Between 2004 and April 2018, Backpage realized annual 3 profits of tens of millions of dollars from adult advertisements. 4 Historically, the adult category, where Backpage advertisers posted 5 sex trafficking ads, made up less than ten percent of all the 6 website’s advertisements. 7 percent of Backpage’s revenue. 8 9 13. However, those ads generated more than 90 Lacey was a co-creator of Backpage.com who was responsible for the website’s policies and strategic direction. Lacey maintained 10 significant control over the website during the relevant period 11 described in this complaint, and continued to receive tens of 12 millions of dollars in Backpage-related distributions even after 13 purportedly selling his interest in Backpage in 2015. 14 14. Larkin was a co-creator of Backpage.com who was responsible 15 for the website’s policies and strategic direction. 16 maintained significant control over the website during the relevant 17 period described in this complaint, and continued to receive tens of 18 millions of dollars in Backpage-related distributions even after 19 purportedly selling his interest in Backpage in 2015. 20 15. Larkin Carl Ferrer (“Ferrer”), though not an original owner, was a 21 co-creator and one of the original officers of Backpage, having 22 initially served as Backpage’s vice-president, and later as CEO. 23 Ferrer is also the CEO of several Backpage-related entities in the 24 Netherlands, including “Website Technologies,” “Amstel River 25 Holdings,” and “Ad Tech BV.” 26 16. John “Jed” Brunst (“Brunst”) was a minority owner of 27 Backpage who owned 5.67 percent of the company at the time of its 28 inception. Brunst served as the Chief Financial Officer of Backpage 25 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 26 of 84 Page ID #:26 1 and several of Backpage’s parent companies. 2 17. Spear was a minority owner of Backpage who owned 4.09 3 percent of the company at the time of its inception. 4 Executive Vice President of one of Backpage’s parent companies. 5 18. Spear served as “M.G.” had no formal position at Backpage, but was the 6 President, Chief Executive Officer, Treasurer, and Secretary of 7 Posting Solutions LLC, a wholly owned Backpage subsidiary with a 8 principal place of business in Dallas, Texas (“Posting Solutions”), 9 which accepted payments from Backpage advertisers. M.G. was also the 10 Chief Financial Officer of Website Technologies, and directed and 11 controlled many of the international and domestic financial 12 transactions of Backpage and its related entities. 13 19. Daniel Hyer (“Hyer”) served as Backpage’s Sales and 14 Marketing Director. 15 Backpage-controlled entities, including Website Technologies, until 16 Backpage’s closure. 17 18 20. Andrew Padilla (“Padilla”) served as Backpage’s Operations Manager. 19 20 He remained an account signatory for numerous 21. Joye Vaught (“Vaught”) served as Backpage’s assistant Operations Manager. 21 22. Lacey, Larkin, Ferrer, Brunst, Spear, M.G., Hyer, Padilla, 22 and Vaught are referred to collectively herein as “Backpage 23 Operators.” 24 25 26 EVIDENCE SUPPORTING FORFEITURE I. The Formation and Evolution of Backpage 23. Lacey and Larkin were the founders of the Phoenix New 27 Times, an alternative newspaper based in Arizona. 28 subsequently acquired several other alternative newspapers that they 26 Lacey and Larkin Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 27 of 84 Page ID #:27 1 operated through an entity called Village Voice Media Holdings 2 (“VVMH”). 3 served as VVMH’s Chief Financial Officer. 4 5 6 24. Spear served as VVMH’s Executive Vice President and Brunst As far back as the 1980’s, VVMH publications routinely included ads for prostitution. 25. By 2000, the popularity of the website www.craigslist.com 7 (“Craigslist”), which offered free classified ads that included 8 prostitution ads, began to disrupt VVMH’s business, which depended on 9 classified advertising revenue. 10 26. Lacey and Larkin, assisted by Ferrer, sought to address 11 this disruption by creating Backpage, which would compete directly 12 with Craigslist. 13 2004, in response to the Craigslist threat that was decimating daily 14 newspapers, VVMH launched its own online classified site, 15 Backpage.com, named after the back page of VVMH’s print publication.” 16 27. As stated in an internal Backpage document, “[I]n From 2004 until 2015, Lacey and Larkin bore primary 17 responsibility for Backpage’s policies and strategic direction. 18 2015, Lacey and Larkin purported to sell to Ferrer all or 19 substantially all of their respective interests in Backpage. 20 fact, Lacey and Larkin retained significant control over Backpage, 21 and both continued to receive millions of dollars of annual 22 distributions of Backpage revenue after the purported sale. 23 28. In In From its inception, most of Backpage’s earnings represented 24 the proceeds of illegal activity, specifically prostitution and sex 25 trafficking, including child sex trafficking. 26 credit card companies were refusing to process payments to or for 27 Backpage, and banks were closing Backpage’s accounts out of concern 28 the accounts were being used for illegal purposes. 27 By 2015, the major Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 28 of 84 Page ID #:28 1 29. In response to these measures, the Backpage Operators 2 initiated and pursued a wide variety of money laundering strategies 3 and techniques designed, in part, to conceal the source and location 4 of the revenues generated by Backpage ads, including ads for human 5 trafficking and illegal prostitution. 6 instructing customers to send checks and money orders to a Post 7 Office box, funneling those funds into bank accounts held in the 8 names of entities with no apparent connection to Backpage, and then 9 giving customers a corresponding “credit” to purchase Backpage ads; These strategies included (a) 10 (b) accepting Backpage proceeds through foreign bank accounts and 11 thereafter redirecting the funds to Backpage Operators in the U.S. 12 and abroad, or transferring the funds back to domestic bank accounts 13 (to conceal the nature, source, location, ownership and control of 14 those funds and promote Backpage’s ongoing illegal operations); and 15 (c) converting customers payments and the proceeds of Backpage’s 16 illegal business into and out of 17 II. digital currency. 7 The Sources and Manipulation of Backpage Criminal Proceeds 18 A. 19 30. Backpage Promotion of Prostitution and Sex Trafficking Numerous Backpage ads were used to sell minors for sex and 20 forcibly traffic adult women for sex. 21 traffickers who used Backpage to advertise their victims were many 22 who were later convicted of sex trafficking offenses. 23 a. Among the pimps and sex For example, During 2014 and 2015, a pimp sold S.F., a minor girl, for 24 25 26 27 28 7 Digital currency (also known as crypto-currency) is generally defined as an electronic-sourced unit of value that can be used as a substitute for fiat currency (i.e., currency created and regulated by a sovereign government). It exists entirely on the Internet and is not stored in any physical form. It is not issued by any government, bank, or company, but is instead generated and controlled through computer software operating on a decentralized peer-to-peer network. Bitcoins, Bitcoins Cash and Litecoin are types of crypto-currency. 28 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 29 of 84 Page ID #:29 1 sex. The pimp advertised S.F. on Backpage’s “Escort” section in the 2 Los Angeles area of California and in Arizona. 3 phrases such as “New In Town” and “Sexy Dark Asian Bombshell with a 4 Nice & Tight {Booty}.” 5 multiple pictures showing her legs, stomach, shoulders and buttocks. 6 The pimp who placed the ad was ultimately arrested, convicted on 7 state sex trafficking charges, and sentenced to 196 years 8 imprisonment. 9 b. The ad contained The ad selling S.F. on Backpage included During 2014 and 2015, the same pimp sold A.C., a minor 10 girl, for sex. 11 sold for sex through a Backpage ad using phrases such as “NEW IN 12 TOWN,” “sexy sweet,” and “sweet like honey but super hot like fire.” 13 The Backpage ad selling A.C. included pictures of her showing her 14 legs, stomach, shoulder, and buttocks, and posed in sexually 15 provocative positions. 16 c. In November 2014, at the age of 17, A.C. was first Between November and December 2015, a pimp drove two women 17 and four minor girls (T.S., S.L., K.O., and R.W.) from Columbus, Ohio 18 to a hotel in St. Charles, Missouri. 19 girls to post ads on Backpage.com. 20 engaged in paid sex acts with Backpage customers who responded to the 21 ads. 22 showing their buttocks. 23 pressed against a mirror. 24 as images of girls posing clothed in front of a mirror. 25 these ads used phrases like “I’m sweet as a treat maybe even sweeter” 26 and “not a lot need to be said. my pic are 100% real.” 27 pimp was convicted of Federal sex trafficking charges and sentenced 28 to 300 months in prison. The next day, the pimp told the Some of the girls took calls and The ads the girls posted included pictures of them on a bed Another image featured a naked girl’s body Other pictures appeared more mundane, such 29 However, In 2017, this Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 30 of 84 Page ID #:30 1 d. In or around 2010, in Washington, J.S., a minor girl, was 2 sold for sex through the use of Backpage ads. 3 the ads, which contained words and phrases such as, 4 “W’E’L’L_W’O’R’T’H_I’T***^***150HR” and “IT WONT TAKE LONG AT ALL.” 5 The ads included pictures of J.S. in provocative positions showing 6 her breasts and buttocks. 7 for sex was sentenced to over 26 years imprisonment on Federal 8 charges related to sex trafficking. 9 e. J.S.’s pimp drafted On March 29, 2011, the pimp who sold J.S. Between 2011 and 2016, a female victim, D.O., who was 10 between the ages of 14 and 19 during those years, was sold for sex 11 through Backpage ads. 12 Backpage was the safest place to advertise because Backpage did not 13 require age verification. 14 phrases that were indicative of prostitution, such as “roses” (money) 15 and “back door” (anal sex). 16 D.O.’s Backpage ads forced D.O. to perform sexual acts at gunpoint, 17 choked her to the point of having seizures, and gang-raped her. 18 31. D.O.’s female pimp instructed D.O. that D.O.’s Backpage ads included words and Some of the customers who responded to Plaintiff alleges that all levels of Backpage management, 19 including the Backpage Operators, were aware of Backpage’s role in 20 promoting criminal activity. 21 a. For example: On September 21, 2010, a group of state attorneys general 22 (“AG”) wrote a letter to Backpage observing that “ads for 23 prostitution-including ads trafficking children-are rampant on the 24 site,” and arguing that “[b]ecause Backpage cannot, or will not, 25 adequately screen these ads, it should stop accepting them 26 altogether.” 27 Backpage to, “lose the considerable revenue generated by the adult 28 services ads,” but stated that “no amount of money can justify the The state AGs acknowledged that this step would cause 30 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 31 of 84 Page ID #:31 1 scourge of illegal prostitution, and the misery of the women and 2 children who will continue to be victimized in the marketplace 3 provided by Backpage.” 4 b. Also in mid-September 2010, Ferrer wrote an email 5 explaining that Backpage was unwilling to delete ads that included 6 terms indicative of prostitution because doing so would “piss[] off a 7 lot of users who will migrate elsewhere,” and force Backpage to 8 refund those customers’ fees. 9 c. In January 2017, the U.S. Senate Subcommittee on Permanent 10 Investigations (“Subcommittee”) conducted a lengthy investigation 11 into sex trafficking and Backpage, resulting in a 50-page report 12 entitled “Backpage.com’s Knowing Facilitation of Online Sex 13 Trafficking.” 14 virtually all of Backpage’s “adult” ads were actually solicitations 15 for illegal prostitution services and that “Backpage [] maintained a 16 practice of altering ads before publication by deleting words, 17 phrases, and images indicative of criminality, including child sex 18 trafficking . . . . 19 of innumerable advertisements for illegal transactions-even as 20 Backpage represented to the public and the courts that it merely 21 hosted content others had created.” 22 Subcommittee’s report, Backpage purported to shut down the “adult” 23 section of its website. 24 Backpage ads demonstrated that the prostitution ads simply migrated 25 to other sections of the website, where they remained accessible 26 until the site was forced to shut down. 27 28 d. The report concluded, among other things, that Those practices served to sanitize the content In response to the However, a review of several thousand On August 5, 2011, Backpage received a letter from the mayor of Seattle. This letter warned, “Seattle Police have 31 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 32 of 84 Page ID #:32 1 identified an alarming number of juvenile prostitutes advertised on 2 Backpage.com since January 2010,” and explained that Backpage was 3 dissimilar from other companies whose products and services are 4 “occasionally or incidentally” utilized by criminals because “[y]our 5 company is in the business of selling sex ads” and “your services are 6 a direct vehicle for prostitution.” 7 Backpage require in-person age verification for all of the “escorts” 8 depicted in its ads. 9 verification requirement. 10 32. The letter recommended that Backpage never instituted an in-person age Backpage instituted and maintained policies and procedures 11 designed to cultivate and sustain its promotion of sex trafficking 12 and prostitution, but which “sanitized” some of the language Backpage 13 customers used to advertise in order to make the advertising of sex 14 trafficking less overt. 15 “moderation.” 16 a. Backpage referred to this practice as For example: In April 2008, Ferrer wrote an email explaining that, 17 although he (Ferrer) was “under pressure to clean up Phoenix’s adult 18 content,” he was unwilling to delete prostitution ads because doing 19 so “would put us in a very uncompetitive position with craig[slist]” 20 and result in “lost pageviews and revenue.” 21 Backpage’s technical staff to edit the wording of such ads by 22 removing particular terms that were indicative of prostitution, but 23 allow the remainder of the ad to be featured on Backpage’s website. 24 b. Ferrer instructed On October 8, 2010, a Backpage manager sent an email to 25 certain Backpage employees and managers threatening to fire any 26 Backpage employee who acknowledged, in writing, that a customer was 27 advertising prostitution: 28 we’re aware of prostitution, or in any position to define it, is “Leaving notes on our site that imply that 32 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 33 of 84 Page ID #:33 1 enough to lose your job over. . . . This isn’t open for discussion. 2 If you don’t agree with what I’m saying completely, you need to find 3 another job.” 4 c. On October 16, 2010, the same Backpage manager sent an 5 email to a large group of Backpage employees that contained two 6 attachments providing guidance on how to “moderate” ads. 7 was a PowerPoint presentation that displayed a series of 38 nude and 8 partially-nude photographs, some of which depicted graphic sex acts. 9 Next to each picture was an instruction as to whether it should be The first 10 approved or disapproved by a Backpage moderator. 11 included “Approve. 12 exposing her anus or genitalia.” and “Approve. 13 Transparent wet panties okay.” 14 spreadsheet identifying 50 terms (all of which were indicative of 15 prostitution) that should be “stripped” from ads before publication. 16 The Backpage manager concluded the email by stating, “[I]t’s the 17 language in ads that’s really killing us with the Attorneys General. 18 Images are almost an afterthought to them.” 19 d. These instructions Nude rear shots are okay as long the model is not Rear shot okay. The second attachment was an Excel On October 16, 2010, the same Backpage manager sent an 20 internal email explaining, “I’d like to still avoid Deleting ads when 21 possible;” “we’re still allowing phrases with nuance;” and “[i]n the 22 case of lesser violations, editing should be sufficient.” 23 e. On October 25, 2010, Ferrer sent an email to Padilla 24 acknowledging that the “[i]llegal content removed” through Backpage’s 25 moderation processes was “usually money for sex act.” 26 also explained that, after the “sex act pics are removed,” the “ad 27 text may stay.” 28 f. This email On October 27, 2010, a different Backpage manager sent an 33 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 34 of 84 Page ID #:34 1 internal email stating that Backpage was “editing 70 to 80%” of the 2 ads it received from customers. 3 g. On June 7, 2011, Ferrer received an inquiry from a law 4 enforcement official about a particular ad that included the term 5 “amber alert.” 6 kind of bizarre new code word for an under aged person.” 7 forwarded this exchange to a Backpage manager and instructed that the 8 term “amber alert” be added to Backpage’s “strip out” list. 9 h. In response, Ferrer acknowledged this might be “some Ferrer then On August 31, 2011, Backpage managers exchanged emails in 10 which they discussed a list of 100 “solid sex for money terms.” 11 Later emails indicate that this list of terms changed but, in 12 general, the list prohibited use of certain terms that Backpage 13 management and employees closely identified with the obvious 14 promotion of sex trafficking and prostitution. 15 i. One Backpage manager acknowledged in the August 31, 2011 16 email exchange that a large proportion of the ads originally 17 submitted by Backpage’s customers contained text and pictures that 18 were indicative of sex trafficking. 19 those ads after editing them to appear less obvious in promoting 20 illegal activity. 21 moderation policy by using “phrases with nuance” when promoting sex 22 trafficking. 23 Backpage’s list of prohibited terms changed and evolved over time to 24 adjust to Backpage advertisers’ use of new code words to promote 25 prostitution. 26 previously associated with sex-for-money became too familiar, or was 27 deemed too closely associated with certain sex trafficking activities 28 in the Backpage community of advertisers, Backpage’s “moderation” Nevertheless, Backpage published Backpage sex trafficking ads adapted to Backpage’s Following the implementation of “moderation,” In other words, once a code word or phrase not 34 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 35 of 84 Page ID #:35 1 policy would be adapted by adding such words or phrases to the 2 “blocked” list or risk being too obvious in its promotion. 3 33. Plaintiff alleges that Backpage’s policy of “moderation” 4 only caused ads explicitly promoting sex trafficking to become more 5 coded and implicit in the ads’ purpose. 6 a. Well over half of the Backpage classified ads in various 7 Backpage categories used terms and phrases (including “massage,” 8 “dating,” “escort” and others) that are consistent with sex 9 trafficking and prostitution. These terms and phrases included, 10 “roses” (money, e.g., “150 roses/half hour”), “in-call” (where the 11 customer goes to the prostitute’s location), “outcall” (where the 12 prostitute goes to the customer’s location), “GFE” (girlfriend 13 experience), and “PSE” (porn star experience). 14 b. Other Backpage ads used language that was mostly free of 15 coded language, but included sexually provocative images. 16 sexually suggestive images included in these ads were typical of ads 17 for prostitution. 18 Angeles dating section depicted images of a woman on a bed with her 19 buttocks presented in a sexual manner; another included a picture of 20 a woman’s cleavage; others included pictures of women posing in 21 sexual positions wearing lingerie and pictures of a woman bending 22 over, revealing her naked buttocks. 23 c. The For example, one such ad posted in Backpage’s Los Backpage’s policy of moderation had the effect of causing 24 and allowing otherwise neutral or innocuous terms to be understood 25 within the Backpage community as coded language for sex trafficking 26 and prostitution. 27 reader of such ads who was familiar with the particular vocabulary 28 used in Backpage “adult” ads could readily identify coded terms and Because of the evolving use of coded terms, a 35 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 36 of 84 Page ID #:36 1 images indicating an ad for prostitution, while an uninitiated reader 2 may not understand these terms at all, or at least not as being 3 associated with sex-for-money. 4 34. Almost all “adult”-type Backpage ads listed phone numbers 5 or emails that a potential customer could use to make contact with 6 the advertiser. 7 within Backpage ads with phone numbers and emails that were 8 frequently included in the memo sections of checks that Backpage 9 advertisers use to pay Backpage for ads, revealed that the same Comparing a sample of phone numbers and emails found 10 numbers and/or email addresses appeared in multiple Backpage ads as 11 contact information. 12 a. For example: A $25 USPS Money Order purchased on June 15, 2017, in 13 Duarte, California, made payable to “Posting Solutions PO BOX 802426, 14 Dallas, TX,” and thereafter deposited into Account 1, bore a notation 15 listing a phone number and the words “Dulce Latina.” 16 Backpage ads showed almost 800 advertisements listing the same phone 17 number. 18 b. A search of A $20 USPS Money Order purchased in Sacramento, California, 19 and later deposited into Account 1 bore a notation listing a phone 20 number and the words “love my lips.” 21 revealed almost 1300 advertisements listing the same phone number. 22 c. A search of Backpage ads A $150 Wells Fargo Bank Money Order, purchased in Arizona, 23 and made payable to “Posting Solutions,” bore an email address and 24 the words, “red hot stuff.” 25 associated with advertisements on several female escort websites that 26 directed customers to contact an Arizona phone number ending in 2397. 27 A search of Backpage.com for this phone number revealed approximately 28 760 ads that included this phone number. The same email address was found to be 36 These Backpage ads included Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 37 of 84 Page ID #:37 1 images indicative of prostitution. 2 on Backpage’s “massage” section included sexual images such as a 3 woman lying on a bed wearing lingerie and a woman laying naked on her 4 stomach. 5 Massage Body Shampoo Body Scrub 4 hands Walk ins or 6 appointment.” 7 sexual images. 8 included terms like “4 hands,” which is coded language describing a 9 massage given to a customer by two women. 10 11 For example, one such ad posted One of the ads described, “Pampering provider Body Rub Legal massage advertisements do not typically depict This advertisement depicted sexual images and Such advertisements are indicative of prostitution. 35. The Backpage ads that shared the same phone number or email 12 address typically also included sexually suggestive images of 13 different women. 14 prostitution agencies that are using the same phone number or email 15 to advertise different women (or girls) to prospective prostitution 16 clients. 17 B. 18 36. Such ads are consistent with ads posted by pimps or Payments for Advertising on Backpage In order to post an ad on Backpage, an advertiser had to 19 pay Backpage by one of several methods, including check, cash, and, 20 until about 2015, credit card payments processed through U.S. credit 21 card payment processors. 22 majority of which were sexually explicit in nature, would then be 23 deposited into various Backpage owned or controlled bank accounts. 24 For example, Backpage’s U.S. Bank account ‘1165, originated in or 25 about April 2010, received several million dollars from the revenue 26 generated from the sale of ads, including ads promoting the 27 trafficking of minors and illegal prostitution. 28 37. The proceeds from these ads, the vast However, in or around 2015, following negative publicity 37 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 38 of 84 Page ID #:38 1 associated with Backpage, some of the major credit card companies 2 enacted what Backpage Operators termed a “blockade.” 3 these companies refused to process credit card payments directed to 4 Backpage. 5 Backpage Operators set up agreements with foreign persons and 6 partners to “franchise” websites for the sole purpose of accepting 7 credit card payments outside of the United States, with the funds 8 being funneled to Backpage. 9 Essentially, 38. In order to circumvent the blockade, Ferrer and other Also in or around 2015, in response to the blockade, 10 Backpage designed a mechanism to allow advertisers to buy Backpage 11 “credits,” which could be accomplished in several ways, including: 12 13 14 15 16 a. mailing gift cards, checks, or money orders to “Posting Solutions” at a P.O. Box in Dallas, Texas; b. using a credit card to buy credits through a third-party credit card payment processor; c. paying with digital currency (specifically, Backpage 17 accepted Bitcoins, Bitcoins Cash, Litecoin, and Ethereum). 18 advertiser selected this option, Backpage provided a digital currency 19 wallet address where the advertiser could send the electronic 20 transfer of the digital currency; and 21 d. If the paying with currency through a third party payment 22 processor. 23 currency, it would convert it to digital currency and then 24 electronically transfer that digital currency to a Backpage digital 25 currency wallet. 26 27 28 39. Once the third-party payment processor received the Digital Currency was processed through the subject accounts in the following way: a. When Backpage received digital currency, it would aggregate 38 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 39 of 84 Page ID #:39 1 the digital currency and then transfer it to a third-party exchanger 2 like GoCoin; 8 3 b. In exchange for the digital currency, the exchanger would 4 transfer U.S. dollars from its foreign bank account(s) into Backpage 5 operating accounts in the United States or elsewhere. 6 could then sell its Bitcoins on various Bitcoins markets. 7 8 9 40. Bitcoins payments for ads have resulted in the trafficking of minors for sex. a. The exchanger For example: On September 6, 2015, a Bitcoins account associated with 10 the owner of the email address later convicted of having trafficked 11 minors for sex paid Backpage about $4 worth of Bitcoins in order to 12 post an ad promoting the trafficking of certain victims in Palm 13 Springs, California. 14 b. On September 15, 2015, an email from the same email address 15 owner indicated a payment to Backpage of about $8 worth of Bitcoins 16 in order to “Fund Account” 9 for palmsprings.backpage.com. 17 c. On October 6, 2015, the same email address owner paid 18 Backpage about $1 worth of Bitcoins to “Fund Account” on 19 palmsprings.backpage.com. 20 d. On October 30, 2015, a Bitcoins account associated with the 21 owner of the email address who trafficked minors for sex paid 22 Backpage about $1 worth of Bitcoins in order to post an ad promoting 23 24 25 26 27 28 8 GoCoin is a digital currency exchanger that converts Bitcoins and another digital currency into fiat currency, like the U.S. Dollar or the Euro. GoCoin is owned by Manx Broadcasting Corporation, based in the Isle of Man. GoCoin has offices in Singapore and Santa Monica, California, and GoCoin holds bank accounts in several countries, most or all of which are outside the United States. 9 The email address owner provided Bitcoins to Backpage as a “Fund Account” payment, that is, payment to Backpage as credit to be used later to pay for Backpage ads. 39 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 40 of 84 Page ID #:40 1 2 the trafficking of certain victims in Columbus, Ohio. e. On November 2, 2015, this same email address owner paid 3 Backpage about $1 worth of Bitcoins to “Move Ad to Top of Listings” 4 in the Columbus, Ohio Backpage ads. 5 f. On November 21, 2015, this same email address owner paid 6 Backpage about $1 worth of Bitcoins to Backpage for credit for that 7 email owner’s Backpage ad account. 8 9 41. Plaintiff contends that five to ten percent of the ads posted on Backpage.com were placed within the Central District of 10 California (including Los Angeles and Orange Counties). 11 January 10 and February 3, 2016, approximately 500,000 ads were 12 posted on Backpage.com and paid for with Bitcoins, for which Backpage 13 received over $3,840,000 in revenue. 14 ads, approximately 28,400 were posted only in 15 LosAngeles.Backpage.com, Ventura.Backpage.com, 16 SanLuisObispo.Backpage.com, OrangeCounty.Backpage.com, and 17 SanGabrielValley.Backpage.com. 18 approximately $184,479 in revenue. 19 42. Between Of these approximately 500,000 These specific ads generated When an advertiser (or “poster”) purchased an ad for 20 prostitution using digital currency, the payment to Backpage (and 21 certain subsequent expenditures) proceeded in the following manner: 22 23 24 a. A poster would choose a payment method online (e.g., through Bitcoins payments); b. If the poster did not already have Bitcoins, the Backpage 25 website would direct the poster to a third-party exchanger to buy 26 Bitcoins; 27 28 c. Backpage would then provide the poster with a wallet address to send a specific amount of Bitcoins; 40 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 41 of 84 Page ID #:41 1 2 3 d. In return for sending the required payment, the poster would receive credit that could be used to post ads on Backpage. e. Backpage would sell the Bitcoins to a third party 4 exchanger, frequently GoCoin, in batches, generally valued in 5 hundreds of thousands, of dollars in order to convert the Bitcoins 6 into U.S. or foreign flat currency, which GoCoin generally, if not 7 always, would hold in foreign bank accounts; 8 9 10 11 f. GoCoin would then wire funds from foreign accounts to either (1) Backpage controlled foreign accounts; or (2) Backpage controlled operating accounts in the United States; g. These accounts were held and controlled by Backpage 12 Operators in the names of entities controlled by Backpage, including 13 Ad Tech BV, Posting Solutions, Website Technologies, and Cereus 14 Properties. 15 h. The funds derived from these foreign transactions would be 16 used by Backpage to pay service providers, like Verizon in Los 17 Angeles, or transferred to Backpage Operators’ accounts and accounts 18 held in their family members’ names. 19 i. 20 For example: a. In March 2015, Ad Tech BV, a Netherlands based 21 company, listing Ferrer as CEO and M.G. as CFO, opened a bank account 22 in the Liechtenstein (the “Netherlands Account”). 23 President, CEO, Treasurer and Secretary of Posting Solutions. 24 March 2015 through November 2017, the Netherlands Account received 25 millions of dollars from Binary Trading SG PTE, Limited (“Binary 26 Trading”). 27 bank that maintains the Netherlands Account. 28 M.G. is the From On April 4, 2017, M.G. sent an email to employees of the The email explained: Binary Capital is our trading partner, they hold money in trust for Go Coin [sic]. Rather than incurring 3 sets of 41 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 42 of 84 Page ID #:42 1 2 wire fees which make our transactions unprofitable, they act as our agent and disburse payments directly from our trust account to our merchant. 3 b. 4 For the period of September 4 through November 23, 5 2015, Backpage advertisers used Bitcoins to purchase about 1,000,000 6 “adult” ads from Backpage. 7 GoCoin for approximately $8.6 million. 8 sold to GoCoin during this period were payments pimps made to 9 Backpage to purchase ads to promote child prostitution. c. 10 Backpage then sold those Bitcoins to Included among the Bitcoins For the period of December 14, 2015, through August 11 30, 2016, in approximately 154 wires, GoCoin accounts held in 12 Slovakia (the “Slovakia Account”) and Singapore Account (the 13 “Singapore Account”) transferred a total of approximately 14 $26,100,235.83 to Branch Banking & Trust account ‘2008, in Plano, 15 Texas, owned by Website Technology (“Website Tech Account ‘2008”). 16 On January 15, 2016, the Website Tech Account ‘2008 transferred 17 $189,571 to Verizon in Los Angeles, California, in payment for 18 Backpage internet services. d. 19 Between January 21 and August 31, 2016, Website Tech 20 Account ‘2008 sent approximately 27 wire transfers totaling 21 approximately $48,000,000 to Arizona Bank & Trust account number 22 ‘6211, belonging to Cereus Properties LLC, which is owned or 23 controlled by Spear, Backpage, and/or other Backpage Operators. 24 C. 25 43. Bases for Forfeiture The Defendant Assets constitute, and are derived from, 26 proceeds traceable to one or more violations of: (1) 18 U.S.C. § 1591 27 (Sex Trafficking of Children); and/or (2) U.S.C. § and 1952 28 (Interstate and Foreign Travel in Aid of Racketeering Enterprise), 42 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 43 of 84 Page ID #:43 1 each of which is SUA under 18 U.S.C. § 1956(c)(7)(A), and a 2 conspiracy to commit such offenses. 3 44. The Defendant Assets were involved in, and are traceable to 4 property involved in, one or more transactions or attempted 5 transactions in violation of 18 U.S.C. § 1956(a)(1)(B)(i) and a 6 conspiracy to commit such offenses, in violation of 18 U.S.C. 7 § 1956(h). 8 are traceable to property involved in one or more financial 9 transactions, attempted transactions, or a conspiracy to conduct or Specifically, the Defendant Assets were involved in and 10 attempt to conduct such transactions involving the proceeds of 11 specified unlawful activity, that is, 18 U.S.C. §§ 1591 and 1952, and 12 were designed in whole or in part to conceal or disguise the nature, 13 location, source, ownership or control of the proceeds of the SUA in 14 violation of 18 U.S.C. § 1956(a)(1)(B)(i). 15 45. The Defendant Assets were involved in, and are traceable to 16 property involved in, one or more transactions or attempted 17 transactions in violation of 18 U.S.C. § 1957, or a conspiracy to 18 commit such offenses, in violation of 18 U.S.C. § 1956(h). 19 Specifically, the Defendant Assets were involved in and are traceable 20 to property involved in one or more financial transactions, attempted 21 transactions, or a conspiracy to conduct or attempt to conduct such 22 transactions in criminally derived property of a value greater than 23 $10,000 that was derived from SUA, that is, 18 U.S.C. §§ 1591 and 24 1952. 25 III. Assets Representing, Traceable To, and Involved In Specified Unlawful Activity 26 27 A. 28 46. Account 1 (Prosperity ‘7188 Funds) On February 15, 2017, Posting Solutions opened Account 1. 43 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 44 of 84 Page ID #:44 1 M.G. is the sole signatory on the account (as described above, 2 Posting Solutions is wholly owned by and controlled by Backpage). 3 47. The application for the P.O. Box identifies the renter of 4 the box as “Website Technologies, LLC/Backpage.com.” Listed on the 5 Application were the names of several Backpage Operators, including 6 Ferrer. 7 48. Between August 1 and September 1, 2017, Account 1 received 8 more than $2,781,750 in wire transfers from foreign banks. 9 example: 10 11 12 13 14 a. For On or about August 16, 2017, Binary Trading wired $535,500 from an account in Singapore into Account 1. b. On or about August 17, 2017, Binary Trading wired $528,500 from a Singapore account into Account 1. c. On or about August 30, 2017, a company named Trilix PTE LTD 15 (“Trilex”), listing the same Singapore address as Binary Trading and 16 GoCoin, sent four wire transfers from the Singapore account into 17 Account 1, ranging from $385,450 to $492,250, totaling approximately 18 $1,717,750. 19 49. Plaintiff alleges that a substantial percentage of outgoing 20 payments from Account 1 have been payments for the operation of 21 Backpage.com. 22 wired from Account 1, as following: 23 24 25 26 a. For example, between July and October 2017, funds were $570,530 to Verizon Digital Media Services in Los Angeles for services related to the Backpage.com website; and b. $1,497 to “Backupify,” a company that provided data backup services for Backpage. 27 28 44 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 45 of 84 Page ID #:45 1 CEREUS PROPERTIES ASSETS 2 B. 3 50. Account 2 (Compass ‘3873 Funds) Account 2 was held in the name of Cereus Properties LLC, 4 and Spear was the sole signatory. 5 with transfers from Account 1, which funds are alleged to have been 6 traceable to SUA, involved in money laundering, or both, and was used 7 as a funnel account to pay Backpage Operators. 8 each month of 2017, several hundred thousand dollars were transferred 9 from Account 1 to Account 2. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 a. This account was funded in part On average, during For example: On August 31, 2017, Account 1 sent a wire transfer totaling $487,491.45 to Account 2. b. On September 15, 2017, Account 1 sent a wire transfer totaling $91,672.67 to Account 2. c. On October 2, 2017, Account 1 sent a wire transfer totaling $471,766 to Account 2. 51. Funds from Account 2 were also used to promote and facilitate prostitution. a. For example: On December 2, 2016, the Netherlands Account transferred $324,055.85 to Account 2; b. On December 8, 2016, the Netherlands Account transferred $499,970.00 to Account 2; c. On December 27, 2016, the Netherlands Account transferred $199,970.00 to Account 2; and d. From March to December 2017, Account 2 paid over $9,000 to 25 “Cox Communications,” an internet services company that Backpage used 26 to facilitate its internet presence and promote its sale of 27 prostitution advertising. 28 45 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 46 of 84 Page ID #:46 1 C. 2 52. Account 3 (Compass ‘4862 Funds) Account 3, held in the name of Cereus Properties, was 3 funded with transfers from foreign and domestic banks, which funds 4 were traceable to SUA, involved in money laundering, or both, 5 including funds transferred from the Netherlands Account through one 6 of the Backpage Operators’ go-between accounts 10 (Wells Fargo Bank 7 account ‘9863 (“Account ‘9863”)), and eventually funneled into 8 Account 3. 9 MICHAEL LACEY ASSETS 10 D. 11 53. Account 4 (FFS&L of SR ‘3620 Funds) Account 4, held in the name of Lacey, was funded with 12 transfers from foreign and domestic banks, which funds were traceable 13 to SUA, involved in money laundering, or both. 14 Account 24 (which was itself funded with transfers from foreign and 15 domestic banks with proceeds traceable to SUA, involved in money 16 laundering, or both), transferred $297,795 into Account 4, as further 17 described below. 18 E. ‘8332) 19 20 54. On October 2, 2017, Accounts 5-10 (RBA ‘2485, ‘1897, ‘3126, ‘8316, ‘8324, and Accounts 5, 6, and 7, each held in the name of Lacey, were 21 funded with transfers from foreign and domestic banks, which funds 22 were traceable to SUA, involved in money laundering, or both. 23 Backpage Operators used Accounts 5, 6, and 7 as pass-through 24 accounts. 25 a. On May 31, 2017, Account 2 transferred approximately 26 27 28 10 A “go-between” (a.k.a., a “pass-through”) is an account set up for the main purpose of transferring funds from one or more bank accounts to various other bank accounts, frequently as an attempt to further conceal the true source and nature of the funds. 46 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 47 of 84 Page ID #:47 1 $676,808.04 into Account 5; 2 3 4 b. On June 30, 2017, Account 5 transferred $600,000 to Account c. On October 2, 2017, Account 2 made two transfers: 6. 5 i. $297,795.54 transferred to Account 4; and 6 7 ii. $694,856.25 wired to Account 11 d. On April 16, 2018, Lacey personally went into the Republic 8 Bank of Arizona, withdrew $500,000 from Account 5, and then used that 9 $500,000 as the initial deposit to open Account 7. 10 e. On or about February 15, 2018, Lacey drafted two $600,000 11 checks (totaling $1.2 million). 12 and the second was drawn from Account 4. 13 to fund Accounts 8, 9, and 10, respectively, with $600,000.00, 14 $300,000.00, and $300,000.00. 15 F. 16 55. One check was drawn from Account 11, These two checks were used Account 11 (SFFCU ‘2523 Funds) Account 11 is held in the name of Lacey and an individual 17 listed in the Credit Union’s records as Lacey’s employee and 18 bookkeeper. 19 traceable to SUA, involved in money laundering, or both. 20 a. Account 11 was funded with proceeds alleged to have been On February 2, 2018, Account 2 (which then contained funds 21 traceable to SUA, involved in money laundering, or both) transferred 22 $734,602.70 into Account 11. 23 G. 24 56. Account 12 (IOLTA ‘4139) Account 12 was an IOLTA held for the benefit of Lacey, and 25 was funded with proceeds traceable to SUA, involved in money 26 laundering, or both. 27 28 57. On January 4, 2017, the Singapore Account wired $489,500 into a Posting Solutions controlled account held at Veritex Bank (the 47 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 48 of 84 Page ID #:48 1 “Veritex Account”). 2 directed two additional wires, for $358,150 and $470,150 3 respectively, into the Veritex Account. 4 Account transferred $1,317,800 into the Veritex Account. 5 a. On January 20, 2017, the Singapore Account In total, the Singapore On or about February 23, 2017, the Veritex Account directed 6 two payments to Account 2, a wire of $443,014, and a check for 7 $27,887.41. 8 9 10 b. Between March 30 and September 14, 2017, Account 2 sent five wires totaling $4,058.063.65 to Account 12. c. In July 2018, Account 12 was closed and a cashier’s check 11 totaling $2,412,785.47 was issued to Lacey’s Annuity Fund, held at 12 Account 12. 13 H. 14 58. The Sebastopol Property The Sebastopol Property was purchased and maintained, in 15 whole or in part, using funds traceable to SUA, involved in money 16 laundering, or both. 17 59. In a series of transactions in December 2016, illicit 18 proceeds from the Netherlands Account would pass-through Account 2, 19 eventually ending up in Account 11. 20 October 2017, additional illicit proceeds from the Singapore Account 21 were passed-through Account 1 to Account 2, and eventually 22 transferred to Account 11. 23 $10,000 of funds from Account 11 were used to support and maintain 24 the Sebastopol Property. 25 60. Additionally, between July and On or about October 10, 2017, over On February 11, 2016, a grant deed, instrument number 26 2016010019 of the Sonoma County official records, transferred the 27 Sebastopol Property to Lacey. 28 consideration, Lacey transferred title of the Sebastopol Property to Thereafter, on April 24, 2017, for no 48 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 49 of 84 Page ID #:49 1 his Delaware limited liability company, Sebastopol, LLC. 2 the grant deed: 3 4 5 6 7 As noted in “There was no consideration for this transfer. This is a transfer between an individual or individuals and a legal entity or between legal entities that results solely in a change in the method of holding title and in which proportional ownership inters in the realty remain the same. . .” 61. On October 10, 2017, Lacey issued a $12,956.25 check from 8 Account 11 to Sonoma County Tax Collector. 9 was “2043 Pleasant Hill Dr Sebastopol.” 10 I. 11 62. The notation on this wire San Francisco, California Property 1 San Francisco Property 1 was purchased and maintained, in 12 whole or in part, using funds traceable to SUA, involved in money 13 laundering, or both. 14 63. In order to acquire San Francisco Property 2, Lacey used 15 funds transferred through the Singapore Account, the Website Tech 16 Account ‘2008, and Cereus Properties accounts, as well as annuity 17 accounts that Lacy controlled, as follows: 18 a. Illicit proceeds were deposited into the Singapore Account, 19 passed-through Account 1, then passed-through Account 2 and 20 transferred to Account 11. Thereafter, funds from Account 11 were 21 used to support and maintain San Francisco Property 1. 22 b. On May 18, 2016, grant deed instrument number 2016-K245482- 23 00 of the San Francisco County official records, transferred San 24 Francisco Property 1 to Lacey and his female partner. 25 c. Thereafter, on October 10, 2017, over $10,000 in funds from 26 Account 11 were used to purchase or maintain San Francisco Property 1. 27 J. 28 64. San Francisco Property 2 San Francisco Property 2 was purchased and maintained, in 49 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 50 of 84 Page ID #:50 1 whole or in part, using funds traceable to SUA, involved in money 2 laundering, or both. 3 65. During the period of December 14 through December 29, 2015, 4 as GoCoin’s partial payment for the Bitcoins Backpage sold it during 5 the period of September 4 through November 23, 2015, the Slovakia 6 Account wired over $1,250,000 to Website Tech Account ‘2008. 7 66. After December 14, 2015, Website Tech Account ‘2008 then 8 transferred funds via multiple pass-through accounts controlled by 9 Lacey and other Backpage Operators, which, as of June 21, 2016, 10 resulted in approximately $5,400,000 ending up in Arizona Bank & 11 Trust account ‘1793, controlled by Lacey (“AB&T Account ‘1793”). 12 67. On June 27, 2016, AB&T Account ‘1793 wired $397,500.00 to 13 Fidelity National Title Company. 14 “XXX(Earnest Money)XXXXXX.” 15 wired $12,859,152.57 to Fidelity National Title Company. 16 notation on this wire was “XX(Balance of Property)XXXXX.” 17 68. The notation on this wire was On July 20, 2016, AB&T Account ‘1793 The Casa Bahia for San Francisco, LLC, a Delaware limited 18 liability company, was the entity used to take title to San 19 Francisco, California Property 2, and is owned by Lacey. 20 2016, by grant deed, San Francisco Property 2 was transferred to 21 Lacey. 22 Lacy transferred San Francisco Property 2 to Casa Bahai for San 23 Francisco, LLC, a Delaware limited liability company, as evidenced by 24 instrument number 2017-K466276099 of the San Francisco County 25 official records. 26 27 28 On July 21, On June 21, 2017, by grant deed and for no consideration, As noted in the grant deed: There was no consideration for this transfer. This is a transfer between an individual or individuals and a legal entity or between legal entities that results solely in a change in the method of holding title and in which proportional ownership inters in the realty remain the 50 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 51 of 84 Page ID #:51 1 same. . . 2 K. 3 69. San Francisco Property 3 San Francisco Property 3 was purchased and maintained, in 4 whole or in part, using funds traceable to SUA, involved in money 5 laundering, or both. 6 70. Beginning in February 2013, illicit funds from Backpage’s 7 U.S. Bank account ‘1165 passed-through various Backpage or Backpage 8 Operators accounts, eventually ending up in BMO Harris account ‘5263, 9 owned or controlled by Lacy. In May 2015, over $10,000 of funds from 10 BMO Harris account ‘5263 was used to purchase or maintain San 11 Francisco Property 3. 12 L. 13 71. Sedona Property The Sedona Property was purchased and maintained, in whole 14 or in part, using funds traceable to SUA, involved in money 15 laundering, or both. 16 72. In October 2017, Account 2 wired approximately $297,795 to 17 Account 4. 18 to support or maintain the Sedona Property. 19 M. 20 73. On November 13, 2018, $6,725.54 from Account 4 was used Paradise Valley Property 1 Paradise Valley Property 1 was purchased and maintained, in 21 whole or in part, using funds traceable to SUA, involved in money 22 laundering, or both. 23 74. Approximately $11,480,000 million in illicit funds from 24 Backpage’s U.S. Bank account ‘1165 passed-through various Backpage or 25 Backpage Operators accounts, eventually (between March 15 and 26 September 18, 2014) ending up in BMO Harris account ‘5263, owned or 27 controlled by Lacy. 28 account ‘5263 transferred $774,379.46 towards the purchase of the Thereafter, on March 30, 2015, BMO Harris Bank 51 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 52 of 84 Page ID #:52 1 Paradise Valley Property 1. 2 N. 3 75. Paradise Valley Property 2 Paradise Valley Property 2 was purchased and maintained, in 4 whole or in part, using funds traceable to SUA, involved in money 5 laundering, or both 6 76. In 2005, for approximately $1,500,000, Lacey purchased the 7 Paradise Valley Property 2. 8 was used as collateral for a $1 million loan (the “2010 Loan”). 9 Beginning no later than January 2012, illicit proceeds were used to 10 11 In 2010, the Paradise Valley Property service the debt on the 2010 Loan. a. Specifically: Between February 4 and June 6, 2013, through a series of 12 wire transfers, Backpage’s U.S. Bank account ‘1165 transferred 13 approximately $41,500,000 to BMO Harris Bank account ‘5263. 14 b. Between March 2013, and January 2016, through a series of 15 periodic transactions, approximately $174,749.39 from BMO Harris Bank 16 account ‘5263 was used to service the debt on the 2010 Loan. 17 18 JAMES LARKIN ASSETS O. 19 20 77. Accounts 13, 15, 16, 17, AND 18 (RBA ‘1889, ‘2592, ‘1938, ‘1897, ‘8103, ‘8162, AND ‘8189) Account 13, held in the name of Larkin, was funded with 21 proceeds alleged to have been traceable to SUA, involved in money 22 laundering, or both. 23 24 25 26 a. On July 6, 2017, Account 2 transferred $971,651.51 into Account 13. b. On July 28, 2017, Account 13 transferred $400,000 into Account 14. 27 78. Account 15 is held in the name of Larkin. 28 a. From March 2015 through November 2017, the Netherlands 52 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 53 of 84 Page ID #:53 1 Account received several millions of dollars in criminal proceeds 2 from Binary Trading. 3 4 5 6 7 b. On December 2, 2016, the Netherlands Account transferred $324,055.85 to Account 2. c. On December 8, 2016, the Netherlands Account transferred $499,970.00 to Account 2. d. On December 27, 2016, the Netherlands Account transferred 8 $199,970.00 to Account 2, which account then transferred funds 9 through Account ‘9863 and into Account 3. 10 e. On December 13, 2017, Account 3 transferred $406,211.10 to 11 Account 15. 12 79. 13 14 15 16 Account 16, 17, and 18 are CDARS Accounts held in the name of Larkin. a. On July 28, 2017, Account 13 transferred $400,000 into Account 14. b. On or about February 8, 2018, $1 million in funds from 17 Account 14 was used to fund Account 16 (which received $500,000), 18 Account 17 (which received $250,000), and Account 18 (which received 19 $250,000). 20 P. 21 22 80. Accounts 19 AND 20 (PCTC ACCOUNT ‘0012 FUNDS, PERKINS COIE ‘0012) Account 19 is held in the name of Larkin’s spouse, Margaret 23 Larkin, and was funded with proceeds traceable to SUA, involved in 24 money laundering, or both. 25 26 27 28 a. On December 31, 2015, Website Tech Account ‘2008 transferred $811,424 to the Slovakia Account. b. On January 11, 2016, the Slovakia Account transferred approximately $1,300,000 to Charles Schwab account ‘4693, held in the 53 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 54 of 84 Page ID #:54 1 name of Larkin (“Charles Schwab Account ‘4693”). 2 c. On January 14, 2016, Charles Schwab Account ‘4693 3 transferred approximately $13,500,000 to Northern Trust Company 4 account ‘9562 (under the name “Ocotillo Family Trust,” owned and 5 controlled by Larkin and Margaret Larkin). 6 d. In July 21, 2017, Account ‘9562 transferred $6,014,000 to 7 Morgan Stanley account ‘1673 (held in the name of Larkin and Margaret 8 Larkin). 9 10 e. In or about November 2017, Morgan Stanley elected to terminate its business relationship with Larkin. 11 f. On November 30, 2017, all the funds then held in Morgan 12 Stanley account ‘1673 (about $10,000,000) were transferred to Account 13 19. 14 15 g. Some of the funds in Account 19 were used to purchase bonds and/or securities, which were held in Account 20. 16 Q. 17 81. Account 21 (ACF ‘2020) Account 21 contains securities and investment vehicles held 18 in the name of Ocotillo Family Trust, which is owned and controlled 19 by Larkin and his spouse, and was funded with proceeds traceable to 20 SUA, involved in money laundering, or both. 21 a. During the period of March 23 through March 31, 2016, 22 Website Tech Account ‘2008 sent three wire transfers totaling 23 $3,694,813.60 to Arizona Bank & Trust account number ‘6211, belonging 24 to Cereus Properties (“Account ‘6211”). 25 b. During the period of April 1, 2016, through July 1, 2016, 26 Account ‘6211 sent five wire transfers totaling $5,750,294 to Charles 27 Schwab Account ‘4693. 28 c. On July 1, 2016, Charles Schwab Account ‘4693 transferred 54 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 55 of 84 Page ID #:55 1 2 $15,000,000 to Account 21. d. During the period of August 2, 2016, through October 6, 3 2016, Account ‘6211 sent six wire transfers totaling $9,550,315 to 4 Charles Schwab Account ‘4693. 5 6 7 8 9 10 e. On January 3, 2017, Charles Schwab Account ‘4693 transferred $2,500,000 to Account 21. f. On January 4, 2017, Charles Schwab Account ‘4693 transferred $2,500,000 Account 21. R. 82. Accounts 22 AND 23 (BA ‘8225 and ‘7054) Account 22 is held in the name of one of T. Larkin, and was 11 used in furtherance of the money laundering scheme described herein, 12 and in an attempt to further conceal or disguise the nature, 13 location, source, ownership or control of the criminal proceeds. 14 15 16 17 83. On February 2, 2018, Account 2 wire transferred $28,337 into Account 22. 84. Account 23 is held in the name of R. Larkin. On February 2, 2018, Account 2 wire transferred $28,337 into Account 23. 18 S. 19 85. Saint Helena Property The Saint Helena Property was purchased and maintained, in 20 whole or in part, using funds traceable to SUA, involved in money 21 laundering, or both. 22 86. Between February 4 and June 6, 2013, approximately 23 $41,500,000 in illicit funds were transferred to Camarillo Holdings 24 LLC, BMO Harris Bank account ‘7172. 25 Bank account ‘7172 wired $26,130.64 to Larkin’s BMO Harris Bank 26 account ‘3110. 27 funds from BMO Harris Bank account ‘7172 were used to purchase or 28 maintain the Saint Helena Property. On October 2, 2013, BMO Harris Thereafter, on November 3, 2016, over $10,000 of 55 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 56 of 84 Page ID #:56 1 T. 2 87. Chicago Property The Chicago Property was purchased and maintained, in whole 3 or in part, using funds traceable to SUA, involved in money 4 laundering, or both. 5 88. Illicit funds originating from Backpage’s U.S. Bank account 6 ‘1165 were passed-through accounts owned or controlled by Backpage or 7 Backpage Operators, and ended up in BMO Harris Bank account ‘3110. 8 Thereafter, on October 2, 2015, BMO Harris Bank account ‘3110 9 transferred $138,000 to Chicago Title and Trust Company as payment 10 towards the purchase of the Chicago Property. 11 U. 12 89. Paradise Valley Property 7 Paradise Valley Property 7 was purchased and maintained, in 13 whole or in part, using funds traceable to SUA, involved in money 14 laundering, or both 15 90. Illicit funds originating from Backpage’s U.S. Bank account 16 ‘1165 were passed-through accounts owned or controlled by Backpage or 17 Backpage Operators, and ended up in BMO Harris Bank account ‘3110, 18 from which account over $10,000 was paid to maintain Paradise Valley 19 Property 7. 20 JOHN BRUNST ASSETS 21 V. 22 91. Account 24 (COMPASS BANK ‘3825) Account 24 is held in the name of Brunst, and was used in 23 furtherance of the money laundering scheme described herein, and in 24 an attempt to further conceal or disguise the nature, location, 25 source, ownership or control of the proceeds of SUA. 26 27 92. On February 2, 2018, Account 2 wire transferred $135,956.59 into Account 24. 28 56 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 57 of 84 Page ID #:57 1 W. 2 3 Account 25, 26, 27, 28, 29, 30 (AB ‘6878, ‘4954, ‘7982, ‘7889, ‘7888 AND ‘6485) 93. Accounts 25, 26, 27, 28, 29, and 30 are held in the name of 4 the “Brunst Family Trust.” 5 for these accounts, which were funded with proceeds traceable to SUA, 6 involved in money laundering, or both. 7 8 9 a. Brunst and his wife are the sole trustees On December 31, 2015, Website Tech Account ‘2008 transferred $811,424 to Account ‘6211. b. On December 6, 2016, Account ‘6211 transferred $161,459 to 10 Wells Fargo Bank account ‘4891, belonging to Brunst (“Account 11 ‘4891”). 12 13 14 c. On January 4, 2017, Account ‘6211 transferred another $258,841 to Account ‘4891. d. On January 5, 2017, Account ‘4891 transferred $300,000 to 15 Wells Fargo Bank account ‘7474, belonging to the Brunst Family Trust 16 (“Account ‘7474”). 17 e. On May 19, 2017, Account ‘7474 transferred approximately 18 19 20 21 22 23 24 25 26 27 28 $1,500,000 into Account 25. f. On May 23, 2017, Account 25 transferred approximately $350,000 to Account 25. g. On June 7, 2017, Account 25 transferred approximately $1,340,000 to Account 25. h. On September 13, 2017, Account 25 transferred approximately $581,000 to Account 27. i. On September 13, 2017, Account 25 transferred approximately $250,000 to Account 28. j. On September 13, 2017, Account 25 transferred approximately 57 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 58 of 84 Page ID #:58 1 2 3 $250,000 to Account 29. k. On September 15, 2017, Account 25 transferred approximately $500,000 to Account 30. 4 SCOTT SPEAR ASSETS 5 X. 6 94. Accounts 31, 32, AND 33 (NBA ‘0178, ‘0151, and‘3645) Accounts 31 and 32 are held in the name of Spear, which 7 accounts were funded with proceeds traceable to SUA, involved in 8 money laundering, or both. 9 benefit of Spear and certain of his family members, which account was Account 33 is held in trust for the 10 funded with proceeds traceable to SUA, involved in money laundering, 11 or both. 12 attempt to further conceal the true nature of the criminal proceeds, 13 go-between accounts served to funnel money from one account to 14 another. 15 a. In furtherance of the money laundering scheme, and in an Between January 21 and August 31, 2016, Website Tech 16 Account ‘2008 sent approximately 27 wire transfers totaling 17 approximately $48,000,000 to Account ‘6211. 18 19 20 21 22 23 24 25 b. transferred $892,426 into Account 31. c. On September 14, 2017, Account 2 wire transferred $50,162.05 into Account 31. d. On October 12, 2017, Account 31 transferred approximately $21,500 into Account 32. e. On January 5, 2018, Account 31 transferred approximately $600,000 into Account 33. 26 Y. 27 95. 28 Between March 1, 2016, and July 1, 2016, Account ‘6211 Account 34 (Live Oak Bank Account ‘6910) Account 34 is held in the name of Spear, and was funded with proceeds traceable to SUA, involved in money laundering, or 58 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 59 of 84 Page ID #:59 1 2 3 4 5 6 7 8 9 10 11 both. 96. On or about March 16, 2016, as an opening deposit, Account 31 transferred $250,000 into Account 34. Z. 97. Account 35 and 36 (Ascensus Broker Services ‘4301 and‘8001) Accounts 35 and 36 are held in the name of N. Spear, Spear’s adult daughter, and were funded with proceeds traceable to SUA, involved in money laundering, or both. a. On February 23, 2017, Account 31 transferred approximately $50,000 into Account 35. b. On the February 23, 2017, Account 31 transferred $50,000 into Account 36. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PRIMUS TRUST ASSETS AA. 98. Account 37 (K&H Bank Account ‘1210) Account 37 is located in Hungary, and held in the name of Primus Trust Company (“Binghampton Trust”) for the benefit of Lacey. In furtherance of the money laundering scheme, Account 37 was funded with proceeds traceable to SUA, involved in money laundering, or both. 99. The tracing of this account involves numerous banks and bank accounts, both foreign and domestic. The accounts include: Website Tech Account ‘2008; Account ‘6211; Arizona Bank & Trust annuity trust account numbers ‘1967, ‘1972, ‘1986, ‘1991, and ‘2014, all held in Lacey’s name (“AZBT Annuity Accounts”); and Johnson Financial account ‘9992, held in an IOLTA, with Lacey as the sole beneficiary. a. Between December 14, 2015, and January 15, 2016, the Slovakia Account sent approximately 26 wire transfers totaling over $2,500,000 to Website Tech Account ‘2008 in the United States. 59 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 60 of 84 Page ID #:60 1 b. On January 15, 2016, Website Tech Account ‘2008 transferred 2 $189,571 to Verizon in Los Angeles, California, in payment for 3 Backpage internet services, which served, in whole or in part, to 4 promote sex trafficking and illegal prostitution. 5 c. Between January 21 and August 31, 2016, Website Tech 6 Account ‘2008 sent approximately 27 wire transfers totaling 7 approximately $48,000,000 to Account ‘6211. 8 9 10 11 d. Between April 1 and October 6, 2016, in approximately 12 wires, Account ‘6211 sent over $18,000,000 to the AZBT Annuity Trust Accounts. e. On December 29, 2016, in five wires, the AZBT Annuity 12 Trusts Accounts sent approximately $16,500,000 to Johnson Financial 13 account ‘9992. 14 15 f. On January 3, 2017, Johnson Financial account ‘9992 transferred $16,500,000 to Account 37. 16 17 18 19 20 21 22 23 24 25 26 27 28 AD TECH BV ASSETS BB. Accounts 56, 57, and 58 (Fio Bank ‘5803, ‘5801, and ’5805) 100. Accounts 56, 57, and 58 are located in the Czech Republic and held in the name of Ad Tech BV, identifying Ferrer as the ultimate beneficial owner, which accounts were funded with proceeds traceable to SUA, involved in money laundering, or both. 101. Account 56, 57, and 58 were set up and maintained to receive payments for Backpage ads, that is, for “accounts receivable.” Merchant processors would accept credit card payments and Bitcoins from Backpage advertisers as credit to place ads for prostitution and other services. The merchant processors would then transfer these funds to accounts set up to receive such payments, specifically including Accounts 56, 57, and 58. 60 All funds contained Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 61 of 84 Page ID #:61 1 within Accounts 56, 57, and 58 are traceable to SUA and involved in 2 money laundering. 3 CC. 4 5 Accounts 47, 48, 49 and 50 (BF Accounts ‘K000 K, ‘K000 U, ‘K000 E, and ‘K001 K) 102. Accounts 47, 48, 49, and 50 are located in Principality of 6 Liechtenstein, and held for the benefit of Ferrer, which accounts 7 were funded with proceeds traceable to SUA, involved in money 8 laundering, or both. 9 103. Accounts 47, 48, 49, and 50 were set up and maintained to 10 receive payments for Backpage ads, that is, for “accounts 11 receivable.” 12 and Bitcoins from Backpage advertisers as credit to place ads for 13 prostitution and other services. 14 transfer these funds to accounts set up to receive such payments, 15 specifically including Accounts 47, 48, 49, and 50. 16 contained within Accounts 47, 48, 49, and 50 are traceable to SUA and 17 involved in money laundering. Merchant processors would accept credit card payments 18 19 20 The merchant processors would then All funds GOLD LEAF SRO FUNDS HELD AT FIO BANK DD. Account 38, 39, and 30 (Fio Bank ‘2226, ‘2231, and ‘2230) 104. Accounts 38, 39, and 40 are located in the Czech Republic, 21 and held for the benefit of Backpage by a third party entity named, 22 “Gold Leaf SRO.” 23 traceable to SUA, involved in money laundering, or both. 24 Accounts 38, 39, and 40 were funded with proceeds 105. Accounts 38, 39, and 40 were created outside the United 25 States with the intention of avoiding the “blockade” of Backpage set 26 up by U.S. credit card companies that refused to process Backpage 27 receipts following negative press associated with Backpage. 28 Approximately 99.5% of the payments into these accounts were to be 61 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 62 of 84 Page ID #:62 1 transferred to accounts held by Ad Tech BV, a Backpage controlled 2 company located in the Netherlands, after which transfer, the funds 3 could be directed for the benefit of Backpage or Backpage Operators 4 in the U.S. or abroad. 5 and 40 are traceable to SUA and involved in money laundering. All funds contained within Accounts 38, 39, 6 7 8 PROTECCTIO SRO FUNDS HELD AT FIO BANK EE. Accounts 41, 42, and 43 (Fio Bank ‘4194, ‘4196, and ‘4198) 9 106. Accounts 41, 42, and 43 are located in the Czech Republic, 10 and held for the benefit of Backpage by a third party entity named, 11 “Protecctio SRO.” Accounts 41, 42, and 43 were funded with proceeds 12 traceable to SUA, involved in money laundering, or both. 13 107. Accounts 41, 42, and 43 were created outside the United 14 States with the intention of avoiding the “blockade” of Backpage set 15 up by U.S. credit card companies that refused to process Backpage 16 receipts following negative press associated with Backpage. 17 Approximately 99.5% of the payments into these accounts were to be 18 transferred to accounts held by Ad Tech BV, a Backpage controlled 19 company located in the Netherlands, after which transfer the funds 20 could be directed for the benefit of Backpage or Backpage Operators 21 in the U.S. or abroad. All funds contained within Accounts 41, 42, 22 and 43 are traceable to SUA and involved in money laundering. 23 VARICOK SRO FUNDS HELD AT FIO BANK 24 FF. Accounts 44, 45, and 46 (Fio Bank ‘8083, ‘8086, and ‘8080) 25 26 108. Accounts 44, 45, and 46 are located in the Czech Republic, 27 and held in the name of Varicok Company SRO. 28 were funded with proceeds traceable to SUA, involved in money 62 Accounts 44, 45, and 46 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 63 of 84 Page ID #:63 1 2 laundering, or both. 109. Accounts 44, 45, and 46 were created outside the United 3 States with the intention of avoiding the “blockade” of Backpage set 4 up by U.S. credit card companies that refused to process Backpage 5 receipts following negative press associated with Backpage. 6 Approximately 99.5% of the payments into these accounts were to be 7 transferred to accounts held by Ad Tech BV, a Backpage controlled 8 company located in the Netherlands, after which transfer, the funds 9 could be directed for the benefit of Backpage or Backpage Operators 10 in the U.S. or abroad. 11 and 46 are traceable to SUA and involved in money laundering. 12 13 14 All funds contained within Accounts 44, 45, PROCOP SERVICES BV FUNDS HELD AT KNAB BANK GG. Account 51 (KB ‘7664) 110. Account 51 is located in the Kingdom of the Netherlands, 15 and held for the benefit of Backpage by a third party entity named, 16 “Procop Services BV.” 17 to SUA, involved in money laundering, or both. 18 111. Account 51 was funded with proceeds traceable Account 51 was created outside the United States with the 19 intention of avoiding the “blockade” of Backpage set up by U.S. 20 credit card companies that refused to process Backpage receipts 21 following negative press associated with Backpage. 22 99.5% of the payments into Accounts 51 was to be transferred to 23 accounts held by Ad Tech BV, a Backpage controlled company located in 24 the Netherlands, after which transfer, the funds could be directed 25 for the benefit of Backpage or Backpage Operators in the U.S. or 26 abroad. 27 and involved in money laundering. Approximately All funds contained within Account 51 are traceable to SUA 28 63 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 64 of 84 Page ID #:64 1 2 3 GULIETTA GROUP BV FUNDS HELD AT RABO BANK HH. Accounts 52 and 53 (RB ‘2452 and ‘4721) 112. Accounts 52 and 53 are located in the Kingdom of the 4 Netherlands and held for the benefit of Backpage by a third party 5 entity named, “Gulietta Group BV.” 6 with proceeds traceable to SUA, involved in money laundering, or 7 both. Accounts 52 and 53 were funded 8 113. Accounts 52 and 53 were created outside the United States 9 with the intention of avoiding the “blockade” of Backpage set up by 10 U.S. credit card companies that refused to process Backpage receipts 11 following negative press associated with Backpage. 12 99.5% of the payments into these accounts were to be transferred to 13 accounts held by Ad Tech BV, a Backpage controlled company located in 14 the Netherlands, after which transfer, the funds could be directed 15 for the benefit of Backpage or Backpage Operators in the U.S. or 16 abroad. 17 to SUA and involved in money laundering. Approximately All funds contained within Accounts 52 and 53 are traceable 18 CASHFLOWS EUROPE LTD FUNDS HELD FOR GULIETTA GROUP B.V., UNIVERSADS 19 B.V., PROCOPSERVICES B.V. and PROTECCIO SRO 20 21 II. Account 55 (SP ‘1262) 114. Account 55 is located in the United Kingdom and held by a 22 third party entity, “Cashflows Europe Limited” (“Cashflows”). 23 Although Backpage is the ultimate beneficiary of Account 55, 24 Cashflows acts first as an entity holding this account for the 25 benefit of Gulietta Group B.V., Universads B.V., Procop Services 26 B.V., and Proteccio SRO (collectively referred to as, the 27 “Entities”), each of which company is owned or controlled by 28 Backpage. Account 55 was funded with proceeds traceable to SUA, 64 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 65 of 84 Page ID #:65 1 2 involved in money laundering, or both. 115. Account 55 was created outside the United States with the 3 intention of avoiding the “blockade” of Backpage set up by U.S. 4 credit card companies that refused to process Backpage receipts 5 following negative press associated with Backpage. 6 99.5% of the payments into Accounts 55 was to be transferred to 7 accounts held by Ad Tech BV, a Backpage controlled company located in 8 the Netherlands, after which transfer, the funds could be directed 9 for the benefit of Backpage or Backpage Operators in the U.S. or 10 abroad. 11 and involved in money laundering. 12 13 JJ. Approximately All funds contained within Account 55 are traceable to SUA Account 54 (LHVP ‘4431) 116. Account 54 is an account maintained in the Republic of 14 Estonia, held in the name of Olist OU for the benefit of Backpage. 15 Account 54 was funded with proceeds traceable to SUA, involved in 16 money laundering, or both. 17 117. Account 54 was created outside the United States with the 18 intention of avoiding the “blockade” of Backpage set up by U.S. 19 credit card companies that refused to process Backpage receipts 20 following negative press associated with Backpage. 21 99.5% of the payments into Accounts 54 was to be transferred to 22 accounts held by Ad Tech BV, a Backpage controlled company located in 23 the Netherlands, after which transfer, the funds could be directed 24 for the benefit of Backpage or Backpage Operators in the U.S. or 25 abroad. 26 and involved in money laundering. Approximately All funds contained within Account 54 are traceable to SUA 27 28 65 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 66 of 84 Page ID #:66 1 2 BACKPAGE-CONTROLLED DOMAIN NAMES KK. ASCIO/WMB Inc Domain Names 3 118. Until recently, Backpage controlled numerous domain names, 4 which have since been seized by the government pursuant to a seizure 5 warrant issued in this district. 11 6 119. The Seized Domains are registered by “ASCIO TECHNOLOGIES 7 INC” DBA “NETNAMES,” a domain registrar that manages the reservation 8 of internet domain names. 9 registered domain name, like each of the Seized Domains, is not 10 11 A domain registrar serves to ensure that a double sold. 120. Additionally, a domain registration will allow the owner of 12 the domain to direct internet traffic to a company’s webserver. 13 Seized Domains were found to have been acquired and maintained with 14 funds traceable to the money laundering scheme described herein, 15 specifically with funds from Account 1, and the Seized Domains were 16 the mechanism Backpage used to promote the prostitution and sex 17 trafficking activity. 18 19 121. The following domains constitute and are derived from proceeds traceable to SUA, involved in money laundering, or both: 20 a. atlantabackpage.com 21 b. backpage.be 22 c. backpage.com d. backpage.com.br e. backpage.cz f. backpage.dk g. backpage.ee 23 24 25 The 26 27 28 11 18-MJ-00711 66 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 67 of 84 Page ID #:67 1 h. backpage.es 2 i. backpage.fi 3 j. backpage.fr 4 k. backpage.gr 5 l. backpage.hu m. backpage.ie n. backpage.it o. backpage.lt p. backpage.mx q. backpage.net r. backpage.no s. backpage.pl t. backpage.pt u. backpage.ro 16 v. backpage.si 17 w. backpage.sk 18 x. backpage.us 19 y. backpage-insider.com 20 z. bestofbackpage.com 21 aa. bestofbigcity.com 22 bb. bigcity.com 23 cc. chicagobackpage.com 24 dd. denverbackpage.com 25 ee. newyorkbackpage.com ff. phoenixbackpage.com gg. sandiegobackpage.com hh. seattlebackpage.com 6 7 8 9 10 11 12 13 14 15 26 27 28 67 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 68 of 84 Page ID #:68 1 ii. tampabackpage.com 2 LL. SURRENDERED DOMAIN NAMES 3 122. Until recently, Backpage also controlled numerous domain 4 names that Backpage has since surrendered (pursuant to its guilty 5 plea on April 5, 2018, in the District of Arizona). 6 123. The following websites were purchased and/or maintained, in 7 whole or in part, with proceeds traceable to SUA, involved in money 8 laundering, or both: 9 a. admoderation.com (Versio) b. admoderators.com (Versio) c. adnet.ws (NetNames) d. adplace24.com (Versio) e. adplaces24.com (Versio) f. adpost24.com (Versio) g. adpost24.cz (GoDaddy) h. adquick365.com (Versio) i. adreputation.com (NetNames) 19 j. ads-posted-mp.com (Versio) 20 k. adsplace24.com (Versio) 21 l. adspot24.com (Versio) 22 m. adspots24.com (Versio) 23 n. adsspot24.com (Versio) 24 o. adtechbv.co.nl (NetNames) 25 p. adtechbv.com (NetNames) 26 q. adtechbv.nl (NetNames) 27 r. advert-ep.com (Versio) 28 s. adverts-mp.com (Versio) 10 11 12 13 14 15 16 17 18 68 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 69 of 84 Page ID #:69 1 t. axme.com (GoDaddy) 2 u. back0age.com (NetNames) 3 v. backpa.ge (NetNames) 4 w. backpaee.com (NetNames) 5 x. backpage-insider.com (NetNames) y. backpage.adult (NetNames) z. backpage.ae (NetNames) aa. backpage.at (NetNames) bb. backpage.ax (NetNames) cc. backpage.be (NetNames) dd. backpage.bg (European domains) ee. backpage.bg (NetNames) ff. backpage.ca (NetNames) gg. backpage.cl (NetNames) 16 hh. backpage.cn (European domains) 17 ii. backpage.cn (NetNames) 18 jj. backpage.co.id (NetNames) 19 kk. backpage.co.nl (European domains) 20 ll. backpage.co.nl (NetNames) 21 mm. backpage.co.nz (NetNames) 22 nn. backpage.co.uk (NetNames) 23 oo. backpage.co.ve (NetNames) 24 pp. backpage.co.za (NetNames) 25 qq. backpage.com (NetNames) rr. backpage.com.ar (NetNames) ss. backpage.com.au (NetNames) tt. backpage.com.ph (NetNames) 6 7 8 9 10 11 12 13 14 15 26 27 28 69 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 70 of 84 Page ID #:70 1 uu. backpage.cz (NetNames) 2 vv. backpage.dk (NetNames) 3 ww. backpage.ec (NetNames) 4 xx. backpage.ee (European domains) 5 yy. backpage.ee (NetNames) zz. backpage.es (NetNames) 6 7 8 aaa. backpage.fi (European domains) bbb. backpage.fi (NetNames) 9 ccc. backpage.fr (European domains) 10 ddd. backpage.fr (NetNames) 11 eee. backpage.gr (European domains) 12 13 14 15 fff. backpage.gr (NetNames) ggg. backpage.hk (European domains) hhh. backpage.hk (NetNames) 16 iii. backpage.hu (European domains) 17 jjj. backpage.hu (NetNames) 18 kkk. backpage.ie (NetNames) 19 lll. backpage.in (NetNames) 20 mmm. backpage.it (NetNames) 21 nnn. backpage.jp (NetNames) 22 ooo. backpage.kr (NetNames) 23 ppp. backpage.lt (NetNames) 24 qqq. backpage.lv (European domains) 25 rrr. backpage.lv (NetNames) 26 27 sss. backpage.me (NetNames) ttt. backpage.mx (NetNames) 28 uuu. backpage.my (NetNames) 70 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 71 of 84 Page ID #:71 1 vvv. backpage.net (NetNames) 2 www. backpage.nl (NetNames) 3 xxx. backpage.no (European domains) 4 yyy. backpage.no (NetNames) 5 zzz. backpage.nz (NetNames) 6 aaaa. backpage.pe (NetNames) bbbb. backpage.ph (NetNames) cccc. backpage.pk (NetNames) dddd. backpage.pl (NetNames) eeee. backpage.porn (NetNames) ffff. backpage.pt (NetNames) gggg. backpage.ro (European domains) hhhh. backpage.ro (NetNames) iiii. backpage.se (NetNames) 16 jjjj. backpage.sex (NetNames) 17 kkkk. backpage.sg (NetNames) 18 llll. backpage.si (European domains) 19 mmmm. backpage.si (NetNames) 20 nnnn. backpage.sk (European domains) 21 oooo. backpage.sk (NetNames) 22 pppp. backpage.sucks (NetNames) 23 qqqq. backpage.tw (NetNames) 24 rrrr. backpage.uk (NetNames) 25 ssss. backpage.uk.com (NetNames) tttt. backpage.us (NetNames) uuuu. backpage.vn (NetNames) vvvv. backpage.xxx (NetNames) 7 8 9 10 11 12 13 14 15 26 27 28 71 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 72 of 84 Page ID #:72 1 wwww. backpage.xyz (NetNames) 2 xxxx. backpagecompimp.com (NetNames) 3 yyyy. backpagecompimps.com (NetNames) 4 zzzz. backpagepimp.com (NetNames) 5 aaaaa. backpagepimps.com (NetNames) bbbbb. backpagg.com (NetNames) ccccc. backpagm.com (NetNames) ddddd. backpagu.com (NetNames) eeeee. backpaoe.com (NetNames) fffff. backpawe.com (NetNames) ggggg. backqage.com (NetNames) hhhhh. backrage.com (NetNames) iiiii. backxage.com (NetNames) jjjjj. bakkpage.com (NetNames) 16 kkkkk. bcklistings.com (NetNames) 17 lllll. bestofbackpage.com (NetNames) 18 mmmmm. bestofbigcity.com (NetNames) 19 nnnnn. bickpage.com (NetNames) 20 ooooo. bigcity.com (NetNames) 21 ppppp. bpclassified.com (NetNames) 22 qqqqq. bpclassifieds.com (NetNames) 23 rrrrr. carlferrer.com (NetNames) 24 sssss. clasificadosymas.com (NetNames) 25 ttttt. clasificadosymas.net (NetNames) uuuuu. clasificadosymas.org (NetNames) vvvvv. classifiedsolutions.co.uk (NetNames) wwwww. classifiedsolutions.net (NetNames) 6 7 8 9 10 11 12 13 14 15 26 27 28 72 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 73 of 84 Page ID #:73 1 xxxxx. classyadultads.com (Versio) 2 yyyyy. columbusbackpage.com (NetNames) 3 zzzzz. connecticutbackpage.com (NetNames) 4 aaaaaa. cracker.co.id (NetNames) 5 bbbbbb. cracker.com (NetNames) cccccc. cracker.com.au (NetNames) dddddd. cracker.id (NetNames) eeeeee. cracker.net.au (NetNames) ffffff. crackers.com.au (NetNames) gggggg. crackers.net.au (NetNames) hhhhhh. ctbackpage.com (NetNames) iiiiii. dallasbackpage.com (NetNames) jjjjjj. denverbackpage.com (NetNames) kkkkkk. easypost123.com (Versio) 16 llllll. easyposts123.com (Versio) 17 mmmmmm. emais.com.pt (NetNames) 18 nnnnnn. evilempire.com (NetNames) 19 oooooo. ezpost123.com (Versio) 20 pppppp. fackpage.com (NetNames) 21 qqqqqq. fastadboard.com (Versio) 22 rrrrrr. guliettagroup.nl (Versio) 23 ssssss. htpp.org (NetNames) 24 tttttt. ichold.com (NetNames) 25 uuuuuu. internetspeechfoundation.com (nameisp) vvvvvv. internetspeechfoundation.org (nameisp) wwwwww. loads2drive.com (NetNames) xxxxxx. loadstodrive.com (NetNames) 6 7 8 9 10 11 12 13 14 15 26 27 28 73 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 74 of 84 Page ID #:74 1 yyyyyy. loadtodrive.com (NetNames) 2 zzzzzz. losangelesbackpage.com (NetNames) 3 aaaaaaa. mediafilecloud.com (NetNames) 4 bbbbbbb. miamibackpage.com (NetNames) 5 ccccccc. minneapolisbackpage.com (NetNames) ddddddd. mobileposting.com (Versio) eeeeeee. mobilepostings.com (Versio) fffffff. mobilepostlist.com (Versio) ggggggg. mobilposting.com (Versio) hhhhhhh. naked.city (NetNames) iiiiiii. nakedcity.com (NetNames) jjjjjjj. newyorkbackpage.com (NetNames) kkkkkkk. paidbyhour.com (NetNames) lllllll. petseekr.com (NetNames) 16 mmmmmmm. petsfindr.com (NetNames) 17 nnnnnnn. phoenixbackpage.com (NetNames) 18 ooooooo. posteasy123.com (Versio) 19 ppppppp. postfaster.com (NetNames) 20 qqqqqqq. postfastly.com (NetNames) 21 rrrrrrr. postfastr.com (NetNames) 22 sssssss. postonlinewith.com (Versio) 23 ttttttt. postonlinewith.me (Versio) 24 uuuuuuu. postseasy123.com (Versio) 25 vvvvvvv. postsol.com (GoDaddy) wwwwwww. postszone24.com (Versio) xxxxxxx. postzone24.com (Versio) yyyyyyy. postzones24.com (Versio) 6 7 8 9 10 11 12 13 14 15 26 27 28 74 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 75 of 84 Page ID #:75 1 zzzzzzz. 2 aaaaaaaa. results911.com (NetNames) 3 bbbbbbbb. sandiegobackpage.com (NetNames) 4 cccccccc. sanfranciscobackpage.com (NetNames) 5 dddddddd. seattlebackpage.com (NetNames) 6 7 8 rentseekr.com (NetNames) eeeeeeee. sellyostuffonline.com (Versio) ffffffff. sfbackpage.com (NetNames) gggggggg. simplepost24.com (Versio) 9 hhhhhhhh. simpleposts24.com (Versio) 10 iiiiiiii. svc.ws (NetNames) 11 jjjjjjjj. truckrjobs.com (NetNames) 12 13 14 15 kkkkkkkk. ugctechgroup.com (NetNames) llllllll. universads.nl (Versio) mmmmmmmm. villagevoicepimps.com (GoDaddy) 16 nnnnnnnn. websitetechnologies.co.uk (NetNames) 17 oooooooo. websitetechnologies.com (NetNames) 18 pppppppp. websitetechnologies.net (NetNames) 19 qqqqqqqq. websitetechnologies.nl (NetNames) 20 rrrrrrrr. websitetechnologies.org (NetNames) 21 ssssssss. weprocessmoney.com (GoDaddy) 22 tttttttt. wst.ws (NetNames) 23 uuuuuuuu. xn--yms-fla.com (NetNames) 24 vvvvvvvv. ymas.ar.com (European domains) 25 wwwwwwww. ymas.br.com (European domains) 26 27 xxxxxxxx. ymas.br.com (NetNames) yyyyyyyy. ymas.bz (European domains) 28 zzzzzzzz. ymas.bz (NetNames) 75 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 76 of 84 Page ID #:76 1 aaaaaaaaa. ymas.cl (European domains) 2 bbbbbbbbb. ymas.cl (NetNames) 3 ccccccccc. ymas.co.bz (European domains) 4 ddddddddd. ymas.co.bz (NetNames) 5 eeeeeeeee. ymas.co.cr (European domains) fffffffff. ymas.co.cr (NetNames) ggggggggg. ymas.co.ni (European domains) hhhhhhhhh. ymas.co.ni (NetNames) iiiiiiiii. ymas.co.ve (European domains) jjjjjjjjj. ymas.co.ve (NetNames) kkkkkkkkk. ymas.com (NetNames) lllllllll. ymas.com.br (European domains) mmmmmmmmm. ymas.com.br (NetNames) nnnnnnnnn. ymas.com.bz (European domains) 16 ooooooooo. ymas.com.bz (NetNames) 17 ppppppppp. ymas.com.co (European domains) 18 qqqqqqqqq. ymas.com.co (NetNames) 19 rrrrrrrrr. ymas.com.do (European domains) 20 sssssssss. ymas.com.do (NetNames) 21 ttttttttt. ymas.com.ec (European domains) 22 uuuuuuuuu. ymas.com.ec (NetNames) 23 vvvvvvvvv. ymas.com.es (European domains) 24 wwwwwwwww. ymas.com.es (NetNames) 25 xxxxxxxxx. ymas.com.gt (European domains) yyyyyyyyy. ymas.com.gt (NetNames) zzzzzzzzz. ymas.com.hn (European domains) aaaaaaaaaa. ymas.com.hn (NetNames) 6 7 8 9 10 11 12 13 14 15 26 27 28 76 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 77 of 84 Page ID #:77 1 bbbbbbbbbb. ymas.com.mx 2 cccccccccc. ymas.com.ni (European domains) 3 dddddddddd. ymas.com.ni (NetNames) 4 eeeeeeeeee. ymas.com.pe (European domains) 5 ffffffffff. ymas.com.pe (NetNames) gggggggggg. ymas.com.pr (European domains) hhhhhhhhhh. ymas.com.pr (NetNames) iiiiiiiiii. ymas.com.pt jjjjjjjjjj. ymas.com.uy (European domains) kkkkkkkkkk. ymas.com.uy (NetNames) llllllllll. ymas.com.ve (European domains) mmmmmmmmmm. ymas.com.ve (NetNames) nnnnnnnnnn. ymas.cr (European domains) oooooooooo. ymas.cr (NetNames) 16 pppppppppp. ymas.do (European domains) 17 qqqqqqqqqq. ymas.do (NetNames) 18 rrrrrrrrrr. ymas.ec (European domains) 19 ssssssssss. ymas.ec (NetNames) 20 tttttttttt. ymas.es (European domains) 21 uuuuuuuuuu. ymas.es (NetNames) 22 vvvvvvvvvv. ymas.org (NetNames) 23 wwwwwwwwww. ymas.pe (European domains) 24 xxxxxxxxxx. ymas.pe (NetNames) 25 yyyyyyyyyy. ymas.pt (NetNames) zzzzzzzzzz. ymas.us (European domains) aaaaaaaaaaa. ymas.us (NetNames) bbbbbbbbbbb. ymas.uy (European domains) 6 7 8 (NetNames) (NetNames) 9 10 11 12 13 14 15 26 27 28 77 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 78 of 84 Page ID #:78 1 ccccccccccc. ymas.uy (NetNames) 2 ddddddddddd. ymas.uy.com (European domains) 3 4 5 BACKPAGE SURRENDERED ASSETS MM. Assets Surrendered To The United States By Backpage 124. On or about May 8, 2018, all of the funds, digital 6 currencies, and other property listed in this subsection were 7 transferred into the United States Postal Inspection Service holding 8 bank account, Bitcoins wallet, Bitcoins Cash wallet, Litecoin wallet, 9 and Bitcoins Gold wallet. These Surrendered Assets constitute and 10 are derived from proceeds traceable to SUA, involved in money 11 laundering, or both. 12 125. On May 8, 2018, within the Stipulation for Preliminary 13 Order of Forfeiture, CR18-465-PHX-SPL, Ferrer, in his capacity as CEO 14 of Backpage, stipulated that the following bank funds, securities, or 15 other assets are criminally derived proceeds of Backpage’s illegal 16 activity, involved in money laundering transactions, or both, and as 17 such, are forfeitable property: 18 19 20 21 a. $699,940.00 wire transferred from ING Bank account ‘7684, held in the name of Payment Solutions BV. b. $106,988.41 wire transferred from ING Bank account ‘2071, held in the name of Payment Solutions BV. 22 c. $499,910.01 wire transferred from US Bank account ‘0239, 23 held in the name of Affordable Bail Bonds LLC. 24 d. $50,000.00 wire transferred from Enterprise Bank and Trust 25 26 27 28 account ‘7177, held in the name of Global Trading Solutions LLC. e. $1,876.36 wire transferred from ING Bank account ‘2071, held in the name of Payment Solutions BV. 78 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 79 of 84 Page ID #:79 1 2 3 4 5 6 7 8 f. $50,357.35 wire transferred from ING Bank account ‘7684, held in the name of Payment Solutions BV. g. $248,970.00 wire transferred from Citibank NA, account ‘0457, held in the name of Paul Hastings LLP. h. $52,500.00 wire transferred from Enterprise Bank and Trust account ‘7177, held in the name of Global Trading Solutions LLC. i. $65,000.00 wire transferred from Enterprise Bank and Trust account ‘7177, held in the name of Global Trading Solutions LLC. 9 j. $5,534.54 wire transferred from Enterprise Bank and Trust 10 account ‘7177, held in the name of Global Trading Solutions LLC. 11 k. $52,500.00 wire transferred from Crypto Capital 12 13 14 15 16 17 i. 6 Bitcoins transferred from a Backpage controlled ii. 199.99995716 Bitcoins transferred from a Backpage wallet; controlled wallet; iii. 404.99984122 Bitcoins transferred from a Backpage 18 controlled wallet; 19 iv. 20 controlled wallet; 21 v. 22 controlled wallet; 23 vi. 24 controlled wallet; 25 26 27 173.97319 Bitcoins transferred from a Backpage 411.00019 Bitcoins transferred from a Backpage 2.00069333 Bitcoins transferred from a Backpage vii. 136.6544695 Bitcoins transferred from a Backpage controlled wallet; viii. 2,673.59306905 Bitcoins Cash transferred 28 from a Backpage controlled wallet; 79 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 80 of 84 Page ID #:80 1 ix. 2 controlled wallet; 3 4 x. xi. 16,310.79413202 Litecoin transferred from a Backpage controlled wallet; 7 8 73.62522241 Bitcoins Cash transferred from a Backpage controlled wallet; 5 6 55.5 Bitcoins Cash transferred from a Backpage xii. 783.9735116 Litecoin transferred from a Backpage controlled wallet; and 9 xiii. 509.81904619 Bitcoins Gold transferred from 10 a Backpage controlled wallet. 11 NN. BACKPAGE FUNDS PREVIOUSLY HELD AT DAVIS WRIGHT TREMAINE 12 13 126. On August 13, 2018, Davis Wright Tremaine initiated a wire 14 transfer of $3,713,121.03 from Bank of America account ‘3414, held in 15 the name of Davis Wright Tremaine, LLP into the government holding 16 account. 17 18 19 20 21 22 23 24 25 26 27 28 a. Between January 13 and January 20, 2017, a GoCoin account wire transferred $1,318,800 to the Veritex Account. b. On June 22, 2017, the Veritex Account wire transferred $1,000,000 into Account 27. c. On April 27, 2017, the Netherlands Account wire transferred $2,500,000 to Account 27. d. On April 28, 2017, the Netherlands Account wire transferred $2,500,000 to Account 27. e. On May 24, 2017, Account 1 wire transferred $500,000 into Account 27. f. On September 13, 2017, Account 1 wire transferred $1,000,000 into Account 27. 80 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 81 of 84 Page ID #:81 1 2 3 4 g. On September 27, 2017, the Netherlands Account wire transferred about $778,802.96 into Account 27. h. On October 20, 2017, Account 1 wire transferred $500,000 into Account 27. 5 FIRST CLAIM FOR RELIEF 6 (18 U.S.C. § 981(a)(1)(C)) 7 127. Based on the facts set out above, Plaintiff alleges that 8 the Defendant Assets constitute, and are derived from, proceeds 9 traceable to one or more violations of Title 18, United States Code, 10 Sections 1591 (Sex Trafficking of Children) and 1952 (Interstate and 11 Foreign Travel in Aid of Racketeering Enterprise), each of which is a 12 specified unlawful activity under 18 U.S.C. §§ 1956(c)(7)(A), 13 1956(c)(7)(B)(iv) and 1956(c)(7)(D), and a conspiracy to commit such 14 offenses. 15 to the United States pursuant to 18 U.S.C. § 981(a)(1)(C). The Defendant Assets are therefore subject to forfeiture 16 SECOND CLAIM FOR RELIEF 17 (18 U.S.C. § 981(a)(1)(A)) 18 128. Based on the facts set out above, Plaintiff alleges that 19 the Defendant Assets were involved in, and are traceable to, property 20 involved in one or more transactions or attempted transactions in 21 violation of section 18 U.S.C. § 1957, and a conspiracy to commit 22 such offenses, in violation of section 18 U.S.C. § 1956(h). 23 Specifically, the Defendant Assets were involved in and are traceable 24 to property involved in one or more financial transactions, attempted 25 transactions, and a conspiracy to conduct or attempt to conduct such 26 transactions in criminally derived property of a value greater than 27 $10,000 that was derived from specified unlawful activities, to wit, 28 violations of Title 18, United States Code, Sections 1591 (Sex 81 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 82 of 84 Page ID #:82 1 Trafficking of Children) and 1952 (Interstate and Foreign Travel in 2 Aid of Racketeering Enterprise), each of which is a specified 3 unlawful activity under 18 U.S.C. §§ 1956(c)(7)(A), 1956(c)(7)(B)(iv) 4 and 1956(c)(7)(D), and a conspiracy to commit such offenses. 5 Defendant Assets are therefore subject to forfeiture to the United 6 States pursuant to 18 U.S.C. § 981(a)(1)(A). The 7 THIRD CLAIM FOR RELIEF 8 (18 U.S.C. § 981(a)(1)(A)) 9 129. Based on the facts set out above, Plaintiff alleges that 10 the Defendant Assets were involved in, and are traceable to property 11 involved in, one or more transactions or attempted transactions in 12 violation of section 18 U.S.C. § 1956(a)(1)(B)(i) (Concealment Money 13 Laundering), (a)(2) (International Money Laundering), and a 14 conspiracy to commit such offenses, in violation of section 18 U.S.C. 15 § 1956(h). 16 are traceable to property involved in one or more financial 17 transactions, attempted transactions, and a conspiracy to conduct or 18 attempt to conduct such transactions involving the proceeds of 19 specified unlawful activity, to wit, violations of Title 18, United 20 States Code, Sections 1591 (Sex Trafficking of Children) and 1952 21 (Interstate and Foreign Travel in Aid of Racketeering Enterprise), 22 each of which is a specified unlawful activity under 18 U.S.C. 23 §§ 1956(c)(7)(A), 1956(c)(7)(B)(iv) and 1956(c)(7)(D), and a 24 conspiracy to commit such offenses. 25 therefore subject to forfeiture to the United States pursuant to 18 26 U.S.C. § 981(a)(1)(A). 27 Specifically, the Defendant Assets were involved in and The Defendant Assets are WHEREFORE, plaintiff United States of America prays that: 28 82 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 83 of 84 Page ID #:83 1 2 3 4 5 6 (a) due process issue to enforce the forfeiture of the Defendant Assets; (b) due notice be given to all interested parties to appear and show cause why forfeiture should not be decreed; (c) that this Court decree forfeiture of the Defendant Assets to the United States of America for disposition according to law; and 7 (d) for such other and further relief as this Court may deem 8 just and proper, together with the costs and disbursements of this 9 action. 10 11 12 13 14 Dated: October 5, 2018 NICOLA T. HANNA United States Attorney LAWRENCE S. MIDDLETON Assistant United States Attorney Chief, Criminal Division STEVEN R. WELK Assistant United States Attorney Chief, Asset Forfeiture Section 15 16 17 18 19 ____/s/John J. Kucera________ JOHN J. KUCERA Assistant United States Attorney Attorneys for Plaintiff United States of America 20 21 22 23 24 25 26 27 28 83 Case 2:18-cv-08592 Document 1 Filed 10/05/18 Page 84 of 84 Page ID #:84 1 VERIFICATION 2 I, Lyndon A Versoza, hereby declare that: 3 1. I am a United States Postal Inspector with the United 4 States Postal Inspection Service. 5 forfeiture action entitled United States v. Various Internet Domain 6 7 8 9 10 11 12 13 14 15 I am the case agent for the civil Names. 2. I have read the above Verified Complaint for Forfeiture and know its contents, which is based upon my own personal knowledge and reports provided to me by other agents. 3. Everything contained in the Complaint is true and correct, to the best of my knowledge and belief. I declare under penalty of perjury that the foregoing is true and correct. Executed on October 5, 2018 in Los Angeles, California. 16 17 18 19 _____________________________ LYNDON A VERSOZA U.S. Postal Inspector United States Postal Inspection Service 20 21 22 23 24 25 26 27 28 84