Visa “intends to help” Pornhub, MindGeek Monetize Child Porn: Decision

In a setback for Visa in a case alleging that the payment processor was responsible for the distribution of child pornography on Pornhub and other sites operated by parent company MindGeek, a federal judge ruled it was reasonable to conclude that Visa knowingly supported the criminal activities.

On Friday, July 29, U.S. District Judge Cormac Carney of the U.S. District Court for the Central District of California issued an order in the case of Fleites v. MindGeek denying Visa’s motion to dismiss the lawsuit alleging violation of California law violated unfair competition – which prohibits unlawful acts, unfair or fraudulent business acts and practices – by processing payments for child pornography. (A copy of the decision is available at this link.)

In the ruling, Carney found that the plaintiff “reasonably alleges” that Visa engaged in a criminal conspiracy with MindGeek to monetize child pornography. Specifically, he wrote: “Visa knew MindGeek’s websites were teeming with monetized child pornography”; that there was a “criminal agreement for financial gain from child pornography from which it can be concluded [Visa’s] Decision to continue to recognize MindGeek as a merchant despite alleged knowledge that MindGeek monetized a significant amount of child pornography”; and that “the court can conveniently conclude that Visa intended to help MindGeek monetize child pornography” by “knowingly providing.”[ing] the tool used to complete the crime.”

“If MindGeek decides to monetize child porn, and Visa decides to continue to allow its payment network to be used for that goal despite knowledge of MindGeek monetizing child porn, it is entirely foreseeable that victims of child porn, like the plaintiff, will suffer the harm of the plaintiff.” claims,” Carney wrote.

Representatives from Visa and MindGeek did not respond to requests for comment on Sunday.

In June, MindGeek CEO Feras Antoon and COO David Tassillo resigned. The Montreal, Quebec-based company also laid off an undisclosed number of employees. This comes after a June 20 New Yorker exposé, which noted that Pornhub has hosted sexually explicit, non-consensual videos, including those featuring children.

The plaintiff in the case against MindGeek and Visa is Serena Fleites, who at the age of 13 was pressured by her then-boyfriend into making a sexually explicit video – which he uploaded to Pornhub (titled “13-Year Old Brunette Shows Camera Off”) without her knowledge or consent. Fleites says the video, viewed millions of times on MindGeek websites, devastated her life: “While MindGeek benefited from the child pornography with the plaintiff, the plaintiff was at times homeless or living in her car, addicted to heroin, depressed and suicidal and without the Supporting her family,” her lawsuit, filed in June 2021, reads. Fleites’ story was introduced in December 2020 by New York Times columnist Nicholas Kristof, who detailed how MindGeek “moneys child rape.”

In his July 29 decision, Carney ruled partially in favor of Visa. He wrote in the statement that Fleites “simply has no basis to claim that Visa was directly involved in the sex trafficking businesses that harmed her.” He also ordered Fleites to “make a clearer statement regarding their civil conspiracy reason for suing Visa.”

In a second judgment (available at this link), Carney forced MindGeek to submit to a court investigation that Fleites MindGeeks attorneys say will “uncover shady operations and those who control them” by revealing the defendant’s financial dealings. “Where the money flows on the MindGeek web, which may relate to ownership of the porn sites that generate revenue, is relevant to the court’s jurisdictional analysis,” the judge said in the opinion. “From the court’s perspective, the financial benefit derived from the sexual exploitation of minors is at the heart of this case.”

On Saturday, activist investor Bill Ackman of Pershing Square Holdings, who previously highlighted the role of Visa and Mastercard in enabling MindGeek’s ability to monetize child pornography, released a Thread on Twitter about the verdict in the case.

“Visa’s conduct here is inexcusable and likely to cause incalculable financial and reputational damage to the company,” as well as “create serious … personal liability and potential criminal liability for the board,” Ackman wrote in part. According to Ackman, neither he nor Pershing Square have any economic interest, short or long, in Visa, Mastercard, or any other payment company, bank, or financial institution.

According to Ackman, after reading the Times story about Fleites and Pornub, he reached out to the CEOs of Visa and Mastercard to express concerns about their role in enabling MindGeek’s business. Shortly thereafter, both companies stopped processing payments for consumers on MindGeek’s websites; Within “about a day, MindGeek removed > 10 million illegal videos, 80% of its content,” the hedge fund manager said. However, both soon reactivated business-to-business payments for buying ads on MindGeek sites and for subscriptions to “premium” content, which Ackman said accounted for about 90% of the company’s revenue.

Ackman wrote that Visa CEO Alfred Kelly “should know that the majority of child trafficking victims come from low-income families, including black and brown families. I would recommend that Visa’s board of directors, and separately Mr. Kelly, hire independent commercial and criminal defense attorneys.” He ended the thread with “Et tu, @Mastercard?”

Michael Bowe, partner at Brown Rudnick and lead counsel representing Fleites in the lawsuit, said in a statement: “The court’s finding that our detailed complaint adequately pleads that Visa engaged in a criminal conspiracy to monetize child pornography, means that Visa and other credit card companies are finally beginning to face the civil, and perhaps criminal, consequences of this unscrupulous and illegal activity.”

The case, Serena Fleites v. MindGeek SARL et al., is File Number 2:21-cv-04920-CJC-ADS in the United States District Court for the Central District of California.

Fleites is one of 34 individual plaintiffs suing Pornhub and MindGeek over the past year for allegedly exploiting and monetizing child pornography, rape videos, trafficked content, stolen content, and other non-consensual content. The lawsuit is the first-ever application of Racketeer Influenced and Corrupt Organizations (RICO), child pornography and human trafficking laws aimed at holding financial institutions accountable for illegal conduct committed by and through the systems of companies whose payments they process. is monetized.

https://variety.com/2022/digital/news/pornhub-visa-child-pornography-court-ruling-1235330052/ Visa “intends to help” Pornhub, MindGeek Monetize Child Porn: Decision

Charles Jones

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