How Visa And Mastercard Made Backpage’s Demise Inevitable

In our last post we began an examination of the money laundering scheme used by Backpage in an attempt to ‘clean’ the vast amounts of money they had been raking from the pimps and child sex traffickers who had been using their services for years.

By late 2013 the Backpage brand — despite Tony Ortega’s incessant lies to the contrary — was increasingly being recognized to be little more than a front for massive criminal sex trafficking. Financial companies used to facilitate online payments were beginning to get cold feet about the prospect of being in business with Backpage and the Backpage leadership was beginning to take notice.

On November 6, 2013, James Larkin, Scott Spear, and Jed Brunst received an email entitled “ Options for the future of Backpage.” This email discussed various strategies for creating new entities to process Backpage-related payments “ without ever disclosing ties to Backpage.”

Tony Ortega Backpage Apologist

Backpage understood exactly what Tony Ortega had long been advocating, when blatantly running a crime syndicate through your business the last thing you want to do is be straight with people. They, like Tony Ortega, had only one option left available to them if their business was to continue — they would need to hide what they were doing from the public at all costs.

On April 1, 2015, Brunst and CEO Carl Ferrer were informed that Mastercard had been “ snooping around” Backpage and might stop processing payments for Backpage in light of the chorus of allegations which they could no longer ignore. In response, Carl Ferrer offered several suggestions for setting up new payment channels that would obscure and conceal Backpage’s involvement in these money transfers. One such proposal was to begin routing Backpage-related transactions through banks located in the country of Mauritius.

Court documents reveal it was during this time that Backpage Chief Financial Officer, Jed Brunst, stated: “ Didnt we go down the Mauritius path once and the banks had the same issue with our content?”

Notwithstanding these clandestine strategies, however, the three major credit card companies stopped doing business with Backpage.

Indeed, on or about April 30, 2015, Backpage learned that American Express would no longer allow its cards to be used for any purchases in Backpage’s adult section. Sometime in early July of 2015, Backpage learned that Mastercard would no longer allow its cards to be used for Backpage-related transactions. When discussing this decision, MasterCard stated that it “ has rules that prohibit our cards from being used for illegal activities.“

Around the same time, Backpage learned that Visa would no longer allow its cards to be used for Backpage-related transactions. When discussing this decision, Visa stated that its “ rules prohibit our network from being used for illegal activity.”

Some have argued it was public pressure in the form of protests against Backpage for the wanton abuse of its victims which signaled the beginning of the end for the infamous website. But, as we shall see, it wasn’t until payment processing companies like Visa and Mastercard began shutting their doors that hope of Backpage’s inevitable demise was finally written on the wall.