Sales director for Backpage.com pleads guilty to conspiracy

FILE - This April 6, 2018, file photo shows a screen shot of Backpage.com on the day that federal authorities seized the classified site as part of a criminal case. Dan Hyer, sales and marketing director for Backpage.com, pleaded guilty Friday, Aug. 17, 2018, in Arizona to conspiring to facilitate prostitution in a scheme to give free ads to prostitutes in a bid to draw them away from competitors. Six others affiliated with Backpage.com face charges in the case. (AP Photo/Damian Dovarganes, File)

PHOENIX — The sales and marketing director of Backpage.com pleaded guilty Friday to conspiring to facilitate prostitution, acknowledging that he participated in a scheme to give free ads to prostitutes in a bid to draw them away from competitors and win over their future business.

Dan Hyer is the second Backpage.com employee to plead guilty in cases in Arizona in which the site has been accused of ignoring warnings to stop running prostitution ads, some of which involved children. Authorities say the site has brought in $500 million in prostitution-related revenue since its inception in 2004.

Some of the site's operators also are accused of laundering money earned from ad sales after banks raised concerns that they were being used for illegal purposes. In all, six others affiliated with Backpage.com, including founders Michael Lacey and Jim Larkin, still face charges in the case.

Hyer, 49, faces a maximum fine of $250,000 and up to five years in prison for his conviction. As part of the plea, prosecutors will dismiss 50 charges of facilitating prostitution and 17 money laundering charges against Hyer. It's unclear whether the plea deal calls for Hyer to testify against others in the case.

Hyer said about 10 or 11 years ago his company would copy ads from the adult section of Craigslist and other sites, repost them on Backpage.com and then offer client a free ad, which prosecutors say was offered for a trial period. Hyer also said the ads were sometimes illegal because they contained links to another site that lets customers post reviews of their experiences with prostitutes.

The object of the strategy was to compete with Craigslist and increase Backpage.com's revenues, Hyer said. An indictment filed in the case alleged Backpage.com used the strategy in Nashville and other cities and planned to expand such efforts in Los Angeles and New York.

Asked by U.S. District Judge Steven Logan whether he was agreeing to the plea deal because he believed he was guilty of the conspiracy charge, Hyer responded, "Yes, your honor." Moments before pleading guilty, an emotional Hyer lifted his glasses to wipe his eyes with a tissue.

Backpage.com is a Dutch-owned limited liability corporation. Its principal place of business is in Dallas, and federal officials say it kept its bank accounts and servers in Arizona.

Another employee of the site, CEO Carl Ferrer, has previously pleaded guilty to a separate federal conspiracy case in Arizona and state money laundering charges in California.

In addition, the company pleaded guilty to human trafficking in Texas and in a money laundering conspiracy case in Arizona. Ferrer has agreed to testify against others.

The six remaining defendants in the Arizona case are scheduled for trial in January 2020. They have pleaded not guilty to the charges.

Sentencing for Hyer is scheduled for Nov. 19.

___

Follow Jacques Billeaud at twitter.com/jacquesbilleaud. His work can be found at https://bit.ly/2GGWEPO.

Must Read

Rio Olympics over, final decision on Brazil...

Aug 24, 2016

After the party, the hangover: With the Rio Olympics fading into memory, Brazil returns to...

Defense witnesses testify in trial of Brazil's...

Aug 27, 2016

Brazilian senators have begun questioning the last two witnesses summoned by the defense of...

Stocks rise as tepid jobs report stokes hopes for...

Sep 2, 2016

US stocks rise as a tepid jobs report for August convinces more investors that interest rates will...

Brazil's ousted president blasts process, talks...

Sep 2, 2016

Brazil's ousted president blasts the process that led to demise and says she is not going away

European Central Bank: Governments must do more...

Sep 8, 2016

The European Central Bank left its key interest rates on hold on Thursday and decided against...

About Us

The World Insiders brings you exclusive coverage from across the globe in a timely, easy to consume format sourced directly from our regional media partners.

Contact us: sales[at]theworldinsiders.com

Subscribe Now!