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Date: 01-01-2024
Case Style:
United States of America v. Aylo Holdings S.A.R.L.
Case Number:
Judge: Unknown
Court:
United States District Court for Eastern District of New York
Plaintiff's Attorney: United States District Attorney’s Office in New York City
Defendant's Attorney: Not Available
Description:
New York City, New York criminal defense lawyer represented the Defendant Indicted on Receiving Proceeds of Sex Trafficking
Deferred Prosecution Agreement Resolves Money Laundering Charge. Aylo Holdings S.A.R.L. (formerly MindGeek S.A.R.L.) (Aylo), parent company to Pornhub.com, was arraigned on a charge of engaging in unlawful monetary transactions involving sex trafficking proceeds, after entering into a deferred prosecution agreement (DPA) with the United States Attorney’s Office for the Eastern District of New York to resolve the charge. The proceeding was held before United States Chief Magistrate Judge Lois Bloom. The DPA provides for the appointment of a monitor (Monitor) for three years and for payments to be made to the United States and to individuals adversely affected by the underlying sex trafficking.
Breon Peace, United States Attorney for the Eastern District of New York, and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the deferred prosecution agreement.
Mr. Peace also thanked the Victim/Witness Unit of the U.S. Attorney’s Office for the Southern District of California, and the FBI’s San Diego Field Office for their valuable assistance in this case.
“This deferred prosecution agreement holds the parent company of Pornhub.com accountable for its role in hosting videos and accepting payments from criminal actors who coerced young women into engaging in sexual acts on videos that were posted without their consent,” stated United States Attorney Peace. “This Office is committed to ensuring internet safety and protecting people from online sexual exploitation. It is our hope that this resolution, which includes certain agreed payments to the women whose images were posted on the company’s platforms and an independent monitorship brings some measure of closure to those negatively affected. This resolution will not only provide oversight over one of the largest online content distributors in the world and ensure the company’s lawful behavior, but it will also develop industry-wide standards for safety and compliance.”
“Motivated by profit, Aylo Holdings knowingly enriched itself by turning a blind eye to the concerns of victims who communicated to the company that they were deceived and coerced into participating in illicit sexual activity” stated FBI Assistant Director-in-Charge Smith. “Make no mistake, any entity that engages in sexual exploitation will be held to account for the mental anguish and terror imposed on victims. I hope today’s proceedings bring a sense of justice to the victims in this case as they move forward in their lives.”
Unlawful Receipt of Sex Trafficking Proceeds
Aylo operates free and paid adult websites that allow third parties to post and distribute adult videos, including on its websites Pornhub.com and PornhubPremium.com. As part of its business, Aylo contracted and/or partnered with adult entertainment companies who were given personalized channels on Aylo’s websites, which Aylo promoted and from which Aylo profited.
Beginning in 2009, Aylo hosted pornographic videos created by GirlsDoPorn (GDP) founder Michael Pratt and his co-conspirators (collectively referred to as the “GDP Operators”) on Aylo’s websites, including Pornhub.com. The GDP Operators owned and operated a pornographic production company and online pornography websites called GDP and “GirlsDoToys” (GDT). In 2019, a federal grand jury in the Southern District of California returned an indictment against the GDP Operators, for, among other charges, sex trafficking offenses, for deceiving and coercing young women to appear in sex videos which were then posted online without the women’s consent. See United States v. Pratt, et. al. 19-CR-4488. Since then, several of the GDP Operators have been convicted in connection with that criminal prosecution.
According to Aylo’s admissions and/or court documents filed today, between 2017 and 2019, Aylo received money that Aylo knew or should have known was derived from the GDP Operators’ sex trafficking operations. For example, in September 2017, Aylo learned that many of the women appearing in the GDP and GDT videos had filed a civil lawsuit in California against the GDP Operators alleging that the complainants had been tricked and coerced into filming the adult videos and that the videos were posted on Pornhub.com without their consent. Between 2016 and 2019, Aylo also received several content removal requests from complainants seeking to remove GDP videos from its websites. The complainants told Aylo that they had been lied to and defrauded into making these videos and that the videos were posted on Pornhub.com without their consent. Although Aylo sought, and received, information from the GDP Operators that purported to establish that the complainants had given consent for their videos to be posted online, Aylo did not independently verify consent and did not remove all the videos that were requested to be taken down. Moreover, in August 2019, Aylo learned that a GDP videographer had testified during the civil trial that he falsely told women that their sex videos would not appear online so that they would agree to appear in the videos, and that such videos were posted on Pornhub.com. Despite the above, Aylo continued to host the GDP and GDT channels on its websites and accept money from its partnership with the GDP Operators.
On or about October 14, 2019, Aylo finally removed the official GDP channel from its platforms. However, the company did not take steps to identify for removal all unofficial GDP content from its website at that time. Aylo also did not remove the official GDT channel from its platforms until December 2020 even though the company knew that the individuals operating GDT were the same as those who operated GDP and that many of the individuals featured in the GDP videos were also featured in the GDT videos.
The Deferred Prosecution Agreement
Under the terms of the deferred prosecution agreement, Aylo has agreed to pay $1,844,952.83 to the United States. Aylo has also agreed to provide monetary payments to victims of the GDP Operators who have not otherwise already received compensation, and whose images were posted on Aylo’s platforms.
Aylo has agreed to be subject to an independent Monitor for a period of three years. The Monitor will be tasked with assessing the company’s compliance with the terms of the DPA. The Monitor will also evaluate the strength and thoroughness of Aylo’s due diligence protocols for its content partners and content programs; the robustness of the company’s content screening and monitoring processes; the adequateness of the staffing and resources dedicated by Aylo to address, mitigate and remediate takedown requests or allegations of the presence of illegal content on the company’s platforms; and the adequacy of the company’s disclosures to relevant law enforcement authorities regarding the presence of illegal content on the company’s platforms. Aylo has agreed to cooperate fully with the Monitor, and to adopt and implement recommendations made by the Monitor, subject to the terms of the DPA.
The Office reached this resolution with Aylo based on several factors, including the nature and seriousness of the offense; the fact Aylo did not voluntarily self-disclose its criminal conduct to the Office but thereafter cooperated with the Office’s investigation; its removal of GDP and GDT content from its platforms; the nature of remedial measures Aylo has instituted across its platforms since 2020; and Aylo’s commitment to remediating and improving its compliance program and internal controls, including its agreement to a three-year monitorship. In reaching this resolution, the Office also considered the wide-ranging impact the monitorship will have on Aylo and, possibly more broadly, other adult website operators and internet safety generally.
The investigation was conducted by the FBI’s New York Field Office. The government’s case is being handled by the Office’s Business and Securities Fraud Section in coordination with the Office’s Bank Integrity Task Force, which is charged with investigating and charging corporate and individual actors who launder criminal proceeds using the U.S. banking system and enforcing anti-money laundering controls under the Bank Secrecy Act. Assistant United States Attorneys Hiral Mehta, Gillian Kassner, Genny Ngai and Tara McGrath are in charge of the prosecution.
Outcome: In the event Aylo breaches the terms of the DPA, the company has agreed to be prosecuted for engaging in an unlawful monetary transaction, in violation of Title 18, United States Code, Section 1957.
Plaintiff's Experts:
Defendant's Experts:
Comments: