Crime

Backpage Founders Charged With Money Laundering, Aiding Prostitution (theverge.com) 256

Federal authorities have charged the two founders of classified site Backpage.com, along with five other employees, with laundering money and facilitating prostitution. According to The Washington Post, the Justice Department claims Backpage took "consistent and concerted action" to knowingly allow ads for illegal sex work. The indictment alleges that "virtually every dollar flowing into Backpage's coffers represents the proceeds of illegal activity." The Verge reports: Law enforcement agencies seized Backpage's servers last week, and co-founder Michael Lacey was charged in a sealed 93-count indictment, which has now been revealed. Lacey, as well as his co-founder James Larkin, were already charged with violating California money laundering laws, although a judge threw out state-level pimping charges. Beyond Lacey and Larkin, the Backpage indictment includes charges against the site's chief financial officer, operations manager, assistant operations manager, and marketing director. It also charges the executive vice president of one of Backpage's parent companies. Backpage CEO Carl Ferrer, who was previously charged with pimping in California, was not charged in this indictment. The Justice Department claims Backpage's owners tried to cover up the fact that most of its "adult services" ads involved prostitution, and that Backpage allowed child sex traffickers to keep ads on the site as long as they deleted age-related keywords. 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. These federal chargers are reportedly unrelated to the Stop Enabling Sex Traffickers Act, a bill that would make website operators liable for illegal content posted to their sites. The bill is currently awaiting Trump's signature.
The Internet

'Erotic Review' Blocks US Internet Users To Prepare For Government Crackdown (arstechnica.com) 154

An anonymous reader quotes a report from Ars Technica: A website that hosts customer reviews of sex workers has started blocking Internet users in the United States because of forthcoming changes in U.S. law. Congress recently passed the Stop Enabling Sex Traffickers Act bill (SESTA), and President Trump is expected to sign it into law. SESTA will make it easier to prosecute websites that host third-party content that promotes or facilitates prostitution, even in cases when the sex workers aren't victims of trafficking. After Congress approved the bill, Craigslist removed its "Personals" section and Reddit removed some sex-related subreddits. The Erotic Review (TER) has followed suit by blocking any user who appears to be visiting the website from the United States.

"As a result of this new law, TER has made the difficult decision to block access to the website from the United States until such time as the courts have enjoined enforcement of the law, the law has been repealed or amended, or TER has found a way to sufficiently address any legal concerns created by the new law," the website's home page says in a notice to anyone who accesses the site from a US location. The Erotic Review explained in an FAQ why it blocked US-based users even before SESTA takes effect. (The bill is also known as the Allow States and Victims to Fight Online Sex Trafficking Act, or FOSTA.) "TER has always operated within the law, and it takes SESTA seriously," the FAQ says. "Because we do not know when SESTA will be signed into law, TER wants to be certain that it is in compliance with the statute the moment it becomes effective."
TER can still be accessed outside the U.S., and U.S.-based users can still access the site via a VPN service. "Non-U.S. are asked to agree to a disclaimer, which requires users to agree to 'report suspected exploitation of minors and/or human trafficking' and that they 'will not access TER from a Prohibited Country,'" reports Ars.
Facebook

Steve Wozniak Drops Facebook: 'The Profits Are All Based On the User's Info' (arstechnica.com) 246

Apple cofounder Steve Wozniak has formally deactivated his Facebook account. In an email interview with USA Today, Wozniak wrote that he was no longer satisfied with Facebook, knowing that it makes money off of user data. "The profits are all based on the user's info, but the users get none of the profits back," he wrote. "Apple makes its money off of good products, not off of you. As they say, with Facebook, you are the product." Ars Technica reports: His Sunday announcement to his Facebook followers came just ahead of Facebook CEO Mark Zuckerberg's scheduled testimony before Congress on Tuesday. The CEO is also reportedly set to meet with members of Congress privately on Monday. Wozniak wrote that Facebook had "brought me more negatives than positives." Still, when Wozniak tried to change some of his privacy settings in the aftermath of Cambridge Analytica, he said he was "surprised" to find out how many categories for ads he had to remove. "I did not feel that this is what people want done to them," added Wozniak. "Ads and spam are bad things these days and there are no controls over them. Or transparency."
Businesses

Amazon Spent Close To $23B on R&D in 2017, Outpacing Fellow Tech Giants (geekwire.com) 62

Amazon powered its prolific 2017, which saw the release of a cavalcade of new products and services, with $22.6 billion in spending on research and development, tops among U.S. companies. From a report: According to data from FactSet, Google parent Alphabet came in second in R&D spending in 2017 at $16.6 billion, followed by Intel at $13.1 billion, Microsoft at $12.3 billion and Apple at $11.6 billion. Facebook jumped into the top 10, spending $7.8 billion in 2017. One of Amazon's biggest R&D efforts in recent years has been the cashier-less grocery store concept Amazon Go. The company spent 2017 getting the technology, first announced in December 2016, ready for prime time before opening the first location in January. Amazon has invested heavily in its market-leading cloud computing arm, Amazon Web Services. AWS juiced Amazon.
United States

Tech Group Urges US To Recruit Allies To Take on China, Not Tariffs (venturebeat.com) 186

A trade group representing top technology companies on Monday told U.S. Treasury Secretary Steven Mnuchin that it opposes the Trump administration's focus on tariffs to try to change China's unfair trade practices. From a report: The Information Technology Industry Council said in a letter to Mnuchin that it supports the Trump administration's "Section 301" investigation into China's abuses of intellectual property, but instead of tariffs, it advocates a U.S.-led international coalition to put pressure on Beijing. "Our opposition to tariffs is pragmatic. Tariffs do not work," wrote ITIC President and CEO Dean Garfield. "Instead of tariffs, we strongly encourage the administration to build an international coalition that can challenge China at the World Trade Organization and beyond," Garfield added. "Numerous countries share the United States' concerns about China and its unfair trade practices. The United States is uniquely well-situated to lead that coalition."
Facebook

Zuckerberg Gets a Crash Course in Charm. Will Congress Care? (bgr.com) 165

An anonymous reader writes: It goes without saying that no tech CEO ever wants to make the trek down to Washington D.C. and appear before congress. And Zuckerberg -- at a surface level -- seems particularly ill-suited for the task. Though clearly an incredible mind, remember that Zuckerberg is a tech-minded programmer and far from a savvy and political operator. That being the case, many people are curious as to how the Facebook founder, who it's worth noting is just 33 years old, will fare when confronted with hard hitting questions from politicians.

In an effort to ensure that everything runs smoothly and that Zuckerberg's appearance goes off without a hitch, The New York Times is reporting that Facebook recently hired a team of experts and coaches tasked with ensuring that Zuckerberg has the tools to deftly navigate the potentially deep waters of Congress. Of particular interest is that Zuckerberg has been learning how to be charming and exhibit humility in the face of heavy-handed and probing questions. The report says, "It [ Facebook] has also hired a team of experts, including a former special assistant to President George W. Bush, to put Mr. Zuckerberg, 33, a cerebral coder who is uncomfortable speaking in public, through a crash course in humility and charm. The plan is that when he sits down before the Senate Commerce and Judiciary committees on Tuesday, Mr. Zuckerberg will have concrete changes to talk about, and no questions he can't handle."

Bitcoin

George Soros, Rockefeller Take Their Marks Before Diving Into the Cryptocurrency Pool (businessinsider.com) 100

john of sparta shares a report from Business Insider (Warning: source may be paywalled; alternative source): Reports of a crackdown on cryptocurrency advertisements by tech giants such as Google and Facebook as well as regulatory uncertainty in Asia and the U.S. have weighed on the coin for much of March and April. The coin is down 50% since the beginning of the year. But investors appeared to be more bullish during Sunday's trade following reports that two Wall Street icons were looking to get into the market for cryptos. More notably, the investment fund founded by billionaire George Soros is preparing to dive into cryptocurrency trading, even though Soros himself previously described them as a "bubble." Adam Fisher, who oversees global macroeconomic investing for Soros Fund Management, has gained internal approval to invest in and trade cryptocurrencies, according to a Bloomberg News report. Also, Venrock -- a venture capital firm founded by descendants of famed capitalist John D. Rockefeller -- announced it was partnering with a cryptocurrency investment firm based in Brooklyn. Fortune first reported on the partnership.

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