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1 MELINDA HAAG (CABN 132612) United States Attorney 2 DAVID R. CALLAWAY (CABN 121782) 3 Chief, Criminal Division 4 ELISE BECKER (NYBN 2540730) Assistant United States Attorney 5 450 Golden Gate Avenue, Box 36055 San Francisco, California 94102-3495 6 Telephone: (415) 436-6878 FAX: (415) 436-7234 7 [email protected] 8 Attorneys for United States of America 9 10

UNITED STATES DISTRICT COURT

11

NORTHERN DISTRICT OF CALIFORNIA

12

SAN FRANCISCO DIVISION

13 UNITED STATES OF AMERICA, 14 Plaintiff, 15 v. 16 17 18

ERIC OMURO, a/k/a Steve Bucher, a/k/a Craig Armstrong, a/k/a Ed Cook, a/k/a “Red,”

19 Defendant. 20

) ) ) ) ) ) ) ) ) ) ) ) ) )

NO. CR 14-0336 WHO GOVERNMENT’S SENTENCING MEMORANDUM Sentencing Date: May 21, 2015 Sentencing Time: 1:30 p.m. Sentencing Judge: Hon. William H. Orrick

21 The United States of America requests that defendant Eric Omuro (Omuro) be sentenced to 15 22 months imprisonment followed by three years of supervised release, no fine, forfeiture of certain agreed23 upon assets, and a special assessment of $100, consistent with the Plea Agreement. This requested 24 sentence is greater than the sentence recommended by the United States Probation Office (USPO) for 25 the reasons discussed below. 26 BACKGROUND INFORMATION 27 Omuro was charged by Indictment on June 24, 2014, with one count of Interstate and Foreign 28 GOVERNMENT’S SENTENCING MEMORANDUM CR 14-0336 WHO 1

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1 Travel in Aid of Racketeering Enterprise, in violation of 18 U.S.C. § 1952(a)(3)(A) and (b)(i)(1) and 2 twenty four counts of Money Laundering, in violation of 18 U.S.C. § 1957(a). Docket 1. The 3 Indictment also contained two forfeiture allegations relating to the two different substantive offenses. 4 Id. Omuro pleaded guilty to Count One of the Indictment on December 11, 2014. Docket 54. 5

The parties agreed in a written plea agreement pursuant to Fed. R. Crim. P. 11(c)(1)(A) and (B),

6 that pursuant to United States Sentencing Guidelines (Guidelines) Section 2E1.2, the base offense level 7 from Section 2G1.1 applies. Docket 53. This is consistent with the USPO’s calculation in the 8 Presentence Report (PSR ¶ 20). The parties agreed that if Omuro met the requirements of USSG 9 § 3E1.1 through sentencing, he may be entitled to a two level reduction in the adjusted offense level. 10 Docket 53 ¶ 7. The parties did not agree on a specific sentence, but agreed that the sentence would be 11 calculated based on the Guidelines. Id. ¶¶ 7, 16. The parties reserved the right to argue that the 12 sentence be satisfied, in whole or in part, by a term of home detention or imprisonment. Id. ¶ 7. 13 14

THE OFFENSE CONDUCT The charges relate to Omuro’s website myredbook.com which hosted prostitution ads in

15 numerous states, including California, Arizona, Nevada, Washington, and Oregon, as well as Canada. 16 Prostitutes, referred to as escorts, posted ads containing personal identifiers and physical attributes, such 17 as name (typically a pseudonym), phone number and/or email address, ethnicity, age, eye color, build, 18 bust size, other physical descriptions, services – typically described by abbreviations, and rates. They 19 also attached pictures, some of which were pornographic. See PSR ¶¶ 7, 8; see also Affidavit of FBI 20 Special Agent Martha Parker in support of search warrants. 21

The website featured a FAQ (frequently asked questions) page. One of the questions answered

22 was “What do those abbreviations mean?” The page listed many terms, in alphabetical order, the 23 majority of which related to sex and/or having sex with prostitutes. At the bottom of the first page of the 24 website, there was a tab referring to terms of use. The Terms of Use Agreement read in part “nothing on 25 this website should be construed as a furtherance of or endorsement of any illegal act or practice.” 26 MyRedBook expressly reminded its visitors that “prostitution and similar activities are illegal in most 27 jurisdictions of the United States and other nations.” Similarly, under the “Do’s and Don’ts” section, the 28 GOVERNMENT’S SENTENCING MEMORANDUM CR 14-0336 WHO 2

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1 website indicated that a person posting an ad should not place pornographic material on the website. 2 Under the Support section, the website’s business address was listed as being in the Seychelles. See 3 Affidavit of FBI Special Agent Martha Parker in support of search warrants. 4

The website also contained forums where customers could comment on the escorts, recommend

5 specific sexual activities, and warn others of law enforcement. For example, law enforcement accessed 6 a forum on April 11, 2014, entitled “Things to do when someone walks into a sting scene.” Members 7 offered advice on cooperating with law enforcement and the general manner in which prostitution stings 8 are handled by law enforcement. Id. 9

The ads were searchable by geographic location. On April 14, 2014, the site listed the following

10 number of advertisements for prostitution: Bay Area (117231), Sacramento and Central California 11 (76010), Southern California (40237), Arizona (3805), Nevada (22153), Seattle (1963), Oregon (1610), 12 Canada (176), and other United States (4956). Id. 13

Part of the website was publicly available, and part was reserved for members only. Members

14 had access to private forums, had the ability to review the escorts, and could read in depth reviews left 15 by other members. As a member, one could search for escorts based on “service details” (sex acts). Id. 16

MyRedbook generated profit, in part, from fees paid by escorts to post their ads more

17 prominently on the website, and from membership fees. After an escort registered with myRedbook by 18 providing a valid email address, she could post a regular ad free of charge. To place a “featured” ad or 19 an “autobump” ad (an ad that stays near/at the top of the page for a limited period of time), the escort 20 had to create an account through the myRedBook website with “ACS, Inc.” and pay a fee. Membership 21 fees were paid by credit card, PayPal, money orders, cash, or cashier checks. Id. Since 2010, 22 myRedBook made over $5,000,000.00. See PSR ¶ 9. 23 24

THE SENTENCING GUIDELINES CALCULATION The government agrees with the USPO’s application of Guidelines sections 2G1.1(a)(2) and

25 3E1.1(a), resulting in an adjusted offense of level 12. At Criminal History Category I, the Guidelines 26 sentencing range is 10 to 16 months in Zone C. The government agrees with the USPO that Omuro’s 27 sentence should be served in its entirety as a custodial sentence. However, it does not agree with the 28 GOVERNMENT’S SENTENCING MEMORANDUM CR 14-0336 WHO 3

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1 USPO that Omuro should be sentenced at the low end of the applicable Guidelines range. To the 2 contrary, the government recommends that Omuro be sentenced at the high end of the range, to a 3 sentence of imprisonment of 15 months, based upon the significant scope of his criminal activity and his 4 persistent efforts to minimize its seriousness and his own criminal culpability. 5

Omuro, through myRedBook, facilitated unlawful prostitution on a wide scale, encompassing

6 most of the western United States and in Canada. Undoubtedly many of the prostitutes who advertised 7 on myRedBook were acting independently, free from coercion and in consensual, though illegal, 8 transactions with customers. But it is inevitable in the commercial sex industry that many of those 9 advertised on myRedBook were under the control of pimps, and many were minors. In accepting 10 compensation for advertisements and memberships, Omuro drew no affirmative distinction between 11 these very different categories of harm. His reason is clear – facilitating prostitution, which necessarily 12 included facilitating the prostitution of trafficked persons and minors – was profitable. To Omuro, those 13 inevitabilities were acceptable consequences so long as the site continued to enrich him. His reckless 14 decision to ignore the significant harms facilitated by the site that he created, managed, and administered 15 is exactly the sort of conduct that demands a strong statement of deterrence, both specific and general, 16 from this Court. 17

Further, while Omuro quickly admitted the conduct comprising the offense of conviction,

18 accepted full responsibility for his decisions, and appears to have terminated and withdrawn from the 19 charged criminal conduct, his written statement of acceptance of responsibility highlights his lack of 20 appreciation for the illegality of his conduct. Specifically, Omuro has significantly minimized the origin 21 and scope of his criminal enterprise, feigned naiveté as to the potential criminal liability associated with 22 running the site in spite of his substantial efforts to conceal his identity and facilities, and misled the 23 Court and the USPO in his statements relating to his efforts of finding ads of minors on myRedBook and 24 of helping minors by posting a “sticky” directing women to the MISSSEY organization. PSR ¶¶ 17, 18. 25 While Omuro was not required to make statements relating to these issues, he volunteered information 26 which is not supported by the facts of the case. 27

Indeed, Omuro’s personal statement suggests that his administration and management of the

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1 myRedBook website seemingly morphed into criminal activity by accident. Omuro variously describes 2 what became myRedBook as a “learning experience,” a “project website,” a “way to learn web sites” 3 and “keep [his] skills current” and “a good learning exercise.” PSR ¶ 17. Somewhat paradoxically, he 4 contends his motivation to “design[] and develop[] a database where people could submit and read 5 escort reviews” was “[t]o further my education” – though he provides no rationale for why he picked an 6 enterprise focused on prostitution to test and build web development skills. He further claims that he 7 initially had no intent to charge for his services, as “it was for self-education and not a business.” Id. In 8 acknowledging that he ultimately chose to charge for memberships and advertisements on myRedBook, 9 he characterizes the fees as nothing more than avoiding personal expense (“since I did not want to spend 10 my money, I created an optional VIP membership with a subscription fee”) as opposed to profit. It is 11 telling that he offers no account of the substantial income he gained from running myRedBook, nor does 12 he acknowledge in any way his motivation to turn (and success in turning) a profit from activity on the 13 site. In reality, myRedBook was a business of national and international scope that profited significantly 14 from the facilitation of illegal activity. Omuro’s transparent attempts to re-frame it as a personal hobby 15 and software development project reveal a failure to meaningfully accept responsibility for his conduct. 16

Omuro similarly claims legal naiveté with respect to the criminal legal implications and his

17 personal exposure in running the website. PSR ¶ 18. While he acknowledges that he retained a First 18 Amendment lawyer, he contends that he “still didn’t appreciate the legal issues and the extent of the 19 personal and legal risks involved in what he did.” Id. However, the facts suggest that Omuro was well 20 aware of legal risks and, in fact, tried to minimize them by attempting to conceal the location of the 21 business and his true identity. For example, he incorporated myRedBook in the Seychelles (PSR ¶ 8). 22 This is notable because his company ACS was registered in California, albeit under the fictitious name 23 of Craig Armstrong. Omuro registered the domain name myRedBook under various aliases. See 24 attached Declaration of Special Agent Martha Parker (Decl. SA Parker). It was first registered with 25 GoDaddy listing an administrative contact of Steve Bucher, who appears to be a fictitious person, with 26 the same associated physical address of myRedBook in the Seychelles. Id. The domain name 27 registration was later renewed with the administrative contact as Craig Armstrong and an associated 28 GOVERNMENT’S SENTENCING MEMORANDUM CR 14-0336 WHO 5

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1 physical address of ACS’s post office box in Mountain View. Id. Omuro also chose to host and then 2 elected to maintain the website’s servers outside the United States. Id. MyRedBook’s servers were 3 initially hosted by a company located in Canada. Id. That company later merged with a company in 4 Texas and subsequently provided clients the option of using the company’s Texas-based servers or 5 Canada-based servers. Id. MyRedBook elected to use the servers in Canada. Id. Omuro also interfaced 6 with the co-defendant and others using the alias “Red” – an online persona that he cultivated in order to 7 participate in and operate the website from which he profited. Id. Omuro’s use of off shore resources 8 and multiple aliases are hallmarks of a person knowingly engaged in criminal activity who wished to 9 conceal his true identity. 10

Omuro also stated to the USPO that he “tried to be vigilant about finding and deleting” ads

11 depicting underage minors. PSR ¶ 18. Omuro does not describe any affirmative steps he or 12 myRedBook took to find such ads, nor is there is any evidence to suggest any were ever taken. Rather, 13 the evidence shows that the website responded to alerts relating to postings of minors by deleting them, 14 but took no affirmative steps to block them from being posted in the first instance. Omuro further 15 explained that “[t]o my knowledge, every time I received a credible report of an underage posting from 16 law enforcement, MISSSEY, or member community, the ad and photo was deleted as quickly as 17 possible – upon receiving the alert and generally within hours of the report.” Id. Accordingly, there is 18 no basis for Omuro’s statement that he tried to be vigilant about finding such ads. While it is true that 19 he responded to alerts, Omuro did nothing else and his suggestion to the contrary is misleading. 20

Omuro further stated that “I also posted a ‘sticky’ anchored posting on myRedBook’s companion

21 site, myPinkBook, directing anyone who needed help to a non-profit organization that protected minors 22 and worked to end child exploitation. This organization, MISSSEY (misssey.org), was the best place I 23 could think of to send minors in trouble for help.” PSR ¶ 18. While technically accurate in that there 24 was a posting in a forum on myRedBook’s companion site intended for its female users, myPinkBook, 25 that mentioned MISSSEY, the “sticky” was hardly directed at juveniles. Without ever discussing the 26 purpose of MISSSEY, which stands for “Motivating, Inspiring, Supporting & Serving Sexually 27 Exploited Youth,” the “sticky” refers victims to call 911 for emergencies or 211 for help. The only 28 GOVERNMENT’S SENTENCING MEMORANDUM CR 14-0336 WHO 6

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1 mention of MISSSEY is at the bottom of the post, as a reference to the originating source for the 2 information contained in the posting, as well as the phone number to the organization in Oakland 3 referenced in the actual posting. See Decl. SA Parker and Attachment 1 thereto. In fact, myRedBook 4 received only one alert directly from the MISSSEY organization in the four years of the Indictment, in 5 contrast to over 1,900 other alerts from family members, friends, law enforcement, or others. Id. 6 Significantly, MISSSEY reached out to Omuro in order to seek a partnership regarding further efforts to, 7 among other things, limit the exploitation of minors on myRedBook. Id; see Attachment 2 thereto. 8 There is no evidence that Omuro ever responded to that request. Id. Omuro’s repeated mentioning of 9 MISSSEY is difficult to understand given the facts of the case. 10

It should be clear that Omuro made no unsolicited effort to assist organizations helping minors.

11 Omuro also failed to respond to a communication from the National Center for Missing and Exploited 12 Children (NCMEC). Id. In October 2010, NCMEC e-mailed myRedBook via the site’s “alert” button 13 to inform myRedBook about and solicit its registration with the NCMEC-run CyberTipline, a 14 mechanism to report instances of child exploitation, and to advise myRedBook of its statutory 15 obligations as an online service provider to report instances of apparent child pornography pursuant to 16 18 U.S.C. § 2258A. Id. MyRedBook never registered with the CyberTipline and never communicated 17 with NCMEC. Id. 18

The government’s concern about Omuro’s lack of appreciation for the seriousness of the offense,

19 namely the magnitude of criminal activity occurring on his website, including child exploitation, is 20 further highlighted by his objection to the PSR’s failure to identify factors warranting a sentence outside 21 the applicable Guidelines range. Addendum to PSR ¶ 3. Omuro specifically waived his right to make 22 such a request by entering into the plea agreement in this case in which he promised not to ask for any 23 adjustment to, or reduction in, the offense level or for a downward departure from the Guidelines range 24 determined by the Court. Docket 53, ¶ 7. Notwithstanding this clear language in the plea agreement, 25 Omuro asked the USPO to do for him what he was precluded from doing for himself. 26 27

GOVERNMENT’S SENTENCING RECOMMENDATION A sentence of 15 months imprisonment takes into account the calculations under the Guidelines,

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1 and addresses the sentencing factors in Section 3553(a). In mitigation of Omuro’s case, he made an 2 early commitment to enter a guilty plea, thus saving resources that would have been devoted to further 3 litigation. Omuro has no prior criminal history points. He has agreed to forfeiture of significant assets, 4 as well as the forfeiture of myredbook.com and its affiliated website sfredbook.com. 5

These mitigating factors and Omuro’s personal history, including committed relationships with

6 his mother, ex-wife, former partner, current partner, his children, and his partner’s daughter, must be 7 viewed in the context of the offense itself and concerns about his lack of remorse discussed above. 8 These issues argue for a sentence of imprisonment that accurately reflects the seriousness of the offense 9 conduct, provides just punishment, and affords adequate deterrence. See PSR, Sentencing 10 Recommendation, Justification section. CONCLUSION

11 12

For the foregoing reasons, the government respectfully requests that the Court sentence Omuro

13 to 15 months imprisonment, followed by a three-year term of supervised release, the agreed upon 14 forfeiture of assets, no fine, and a $100 special assessment. This sentence is within the applicable 15 Guidelines range of adjusted offense level 12. 16 17 DATED: May 14, 2015

Respectfully submitted,

18

MELINDA HAAG United States Attorney

19 /s/ 20 21

Elise Becker Assistant United States Attorney

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