CEO & shareholders criminally charged with money laundering

By Christine Duhaime | December 23rd, 2016

CEO & Shareholders Charged

The Attorney General of California announced today that her office has filed new criminal charges against the CEO of and two of its controlling shareholders, charging them with 26 counts of money laundering and 13 counts of pimping children out for prostitution in connection with the website

According to the Attorney General, certain financial institutions refused to provide financial services to because of the connection to the activities sold on

US$46 million was received by for California transactions alone that were for escort -prostitution related ads in a 3 year period.

Alleged Fake Companies

The defendants allegedly created multiple corporate entities to get bank accounts and launder money from transactions when they were refused payment processing services. In several of the pimping charges, the persons involved were minors under the age of 16. The compliant alleges that had prostitution-related revenues and created an “online brothel”, and derived support from child prostitution (in Canada, what we call living off the avails of prostitution).

According to the criminal complaint, American Express allegedly provided services to until May 2015 when it decided to cancel its merchant number. allegedly created a website called and Truckrjobs, applied for an Amex merchant code and a Stripe merchant code under those names, and instructed its users to use their American Express cards at those sites to buy credits which would be accepted by

According to the criminal complaint, the CFO of was made the President of the new entities created to obtain financial services to process ads sales for escort-type transactions of (the Amex anti-money laundering due diligence for beneficial ownership seems to have missed that it was the same officer).

Canada? operates in several cities in Canada but it is not known whether Canadian financial institutions have declined to provide merchant services to its large Toronto and Vancouver sites these types of services or whether they are concerned with respect to the money laundering implications arising from the allegations in the criminal complaint.

Bitcoin for Credits

People can buy credits to use with bank debit cards that are converted to Bitcoin (see here and here) through services that act as a payment processor (intermediary) so that ads can be purchased indirectly without alerting the credit card companies (or law enforcement presumably) as to the purchases or the person behind transactions (the person selling prostitution services who would lose their bank account if a bank learned they were depositing the proceeds of crime in their account).

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