FILE - This undated file booking photo provided by the Sacramento County Sheriff's Office shows Michael Lacey. An indictment unsealed Monday, April 9, 2018 in federal court in Phoenix, charges Lacey, a founder of the classified site Backpage.com, with facilitating prostitution and money laundering. (Sacramento County Sheriff's Office via AP, File)
FILE - This undated file booking photo provided by the Sacramento County Sheriff's Office shows Michael Lacey. An indictment unsealed Monday, April 9, 2018 in federal court in Phoenix, charges Lacey, a founder of the classified site Backpage.com, with facilitating prostitution and money laundering. (Sacramento County Sheriff's Office via AP, File) Credit: Uncredited

Phoenix — The owners of the classified advertising site Backpage.com, who already have beaten some state charges in a separate California case, now are facing a federal indictment charging them with ignoring warnings to stop running advertisements promoting prostitution. Prosecutors contend some of the advertisements depicted children who authorities said were sex trafficking victims.

The charges against Backpage.com founders Michael Lacey and James Larkin include facilitating prostitution and money laundering. Their attorneys did not return phone calls seeking comment.

Five other company officials also were named in the federal indictment unsealed on Monday, which charged that Lacey, Larkin and the others knowingly facilitated prostitution by running ads for sexual services and used foreign banks to hide revenues.

The indictment said the site contended it tried to prevent prostitution ads, but investigators determined that was not the case.

Backpage.com employees sought to help customers edit their ads to stay within legal limits while still encouraging commercial sex, prosecutors said. Photos and words that were indicative of prostitution were removed before such ads were run, according to the indictment.

“Nevertheless, the Backpage defendants made a financial decision to continue displaying those ads,” the indictment said, noting the site has brought $500 million in prostitution-related revenues since its inception in 2004. Federal authorities last week seized Backpage.com and its affiliated websites.

The indictment alleges
Backpage.com started to launder money a few years ago after banks raised concerns. Prosecutors said the site routed proceeds through unrelated entities, wired money into foreign banks and converted money into cryptocurrency.