The indictment, which also includes money laundering charges, was made public after Backpage.com and its affiliated websites were seized on Friday by US federal law enforcement authorities and taken off the internet.
Backpage's creators Michael Lacey, 69, and James Larkin, 68, both of Paradise Valley, Arizona, face the charges along with five other defendants.
Backpage had drawn fierce opposition from some groups and scrutiny from lawmakers for the proliferation of child sex trafficking ads that appeared on the site, under code words like "Amber Alert". According to the indictment, nearly every dollar the website earned was made through illegal activity of some sort.
While the site maintains it diligently tries to prevent prostitution ads, it still allows them and has declined to take steps to confront the problem, the indictment said.
Critics of the bill, which passed with overwhelming support last month and is awaiting the president's signature, say it could harm First Amendment rights and online sex workers.
Sex ads posted on the site have included those involving children being trafficked by adults.
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United States authorities have accused the operators of Backpage.com of earning $500 million in prostitution-related revenue since the site's establishment, and allegedly converting some of these proceeds into bitcoin and other cryptocurrencies as part of their money laundering efforts.
The indictment alleges, "These strategies are a fiction created to hide the true nature of Backpage's ads and customers".
"It's protecting our children and it's protecting women who are being raped and assaulted daily", said Kasey McClure.
The 61-page indictment spells out the offending ads in black and white, adding that "By 2008, if not earlier, the Backpage defendants were aware that the overwhelming majority of the website's "adult" ads involved prostitution". The indictment also claims that Backpage disguised payments for illegal services by having customers funnel money to foreign bank accounts or apparently unrelated companies, or by transferring funds into cryptocurrency.
"Backpage is part of the solution". There is no listing for Larkin's attorney.
Backpage and its founders have been the subject of intense investigation by the Senate Homeland Security Committee in recent years. According to the indictment, one internal document prepared by a public relations firm described the company's media strategy: "Do not acknowledge the prostitution". Nicknamed "FOSTA", for the Fight Online Sex Trafficking Act, it would enable victims and state prosecutors to pursue websites in criminal and civil court without being blocked by Section 230.