The Ongoing Risk

Earlier this week we reported that Dan Hyer, the sales and marketing director of plead guilty in Arizona federal court to conspiring to facilitate prostitution. He is the second Backpage executive to plead guilty so far, with at least another six others slated to go to trial in early 2020.

Recently we’ve been asked here for a quick recap of what brought us to where we are in this case. With that in mind, here is a brief background:  

For years, Backpage has been at the center of significant controversy. It has been accused on multiple occasions of facilitating pimping and human trafficking through the advertisements on its website. Until recently, Backpage has been able to escape liability on First Amendment grounds and other protections for online content providers. But earlier this year, officials seized Backpage’s website and indicted a number of individuals affiliated with the website. On the heels of the indictments, congress passed and the president signed a new law that makes it easier for law enforcement to prosecute website operators suspected of facilitating prostitution. There are currently active prosecutions against Backpage and its employees in Texas, Arizona and California.

Hyer is now the second high profile individual to plead guilty in this matter. Tony Ortega’s former boss, Backpage CEO Carl Ferrer, plead guilty in April and agreed to turn on the site’s two founders Michael Lacey and James Larkin to assist in the State’s ongoing prosecution. The company itself also plead guilty (yes, corporations can be convicted of crimes!) and agreed to provide information to law enforcement in connection with the ongoing prosecutions.

Interestingly, Hyer’s guilty plea does not include a requirement that he cooperate with prosecutors and, under the terms of the deal, he faces a maximum of five years in prison (if he were convicted at trial he would face significantly more jail time). Whether Tony Ortega is privately considering cutting a similar deal to save his own neck is anyone’s guess at this point.

Although this case is an extreme example of an advertiser facing criminal liability, it serves as a reminder that advertisers must be mindful of applicable criminal laws (or changes in the law) before promoting questionable content. The same might be said for Tony Ortega who lived quite comfortably as a result of these profits off the backs of the Backpage victims and who may yet soon find himself facing similar legal scrutiny.

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