In a setback for Visa in a case alleging a payment processor responsible for distributing child pornography to Pornhub and other sites operated by parent company MindGeek, a federal judge ruled that it was reasonable to conclude that Visa knowingly facilitated criminal activity.
On Friday, July 29, U.S. District Judge Cormac Carney of the U.S. District Court for the Central District of California issued a ruling in Fleets v. Mindjek, dismissing Visa’s application to dismiss the allegation of a violation of the California Unfair Competition Act — which prohibits unfair or fraudulent acts and practices By processing payments for child pornography. (A copy of the resolution is available at this link.)
In the ruling, Carney considered that the plaintiff had “sufficiently claimed” that Visa had been involved in a criminal conspiracy with MindGeek to monetize child pornography. Specifically, he wrote, “Visa has learned that MindGeek websites are teeming with children who are being invested in pornography”; That there is a “criminal agreement for the financial benefit of inferred child pornography.” [Visa’s] The decision to continue to recognize MindGeek as a merchant despite its allegations of knowing that MindGeek has invested a significant amount of child pornography”; and that “the Court can comfortably conclude that Visa aims to help MindGeek monetize child pornography” by “submitting[ing] The instrument used to complete the crime.”
“When MindGeek decides to monetize child pornography, and Visa decides to continue to allow its payment network to be used for this goal despite MindGeek knowing about monetizing child pornography, it is entirely expected that victims of child pornography will be exposed as the plaintiff claims” Carney Books.
Visa and MindGeek representatives did not respond to requests for comment on Sunday.
In June, MindGeek CEO Firas Anton and COO David Tassilo resigned. The Montreal, Quebec-based company has also laid off an unknown number of employees. This came on the heels of June 20 The New Yorker Gallery which found that Pornhub hosts non-consensual sexually explicit videos including those with children.
The plaintiff in the case against MindGeek and Visa is Serena Fleets, who was pressured by her then-boyfriend when she was 13 to make a sexually explicit video – which he uploaded to Pornhub (titled “13-Year-Old Brunette Shows Off For the Camera”) without her knowledge or consent. Fleites says the video, which has been viewed millions of times on MindGeek sites, ruined her life: “While MindGeek made use of child pornographic content showing the plaintiff, the plaintiff was intermittently homeless or living in her car, addicted to heroin, depressed and suicidal, and without the support of her family, The lawsuit, filed in June 2021, states. The Fleites story has appeared before Nicholas Kristof, New York Times columnist, in December 2020who detailed how MindGeek “invests in child rape”.
In his July 29 ruling, Carney ruled in part in favor of Visa. He wrote in the opinion that Fleites “simply has no basis for claiming that Visa was directly involved in sex trafficking projects that harmed it.” In addition, Fleets ordered that a “more specific statement be made in connection with the common law civil conspiracy case against Visa.”
In a second judgment (available at this link), Carney forced MindGeek to submit to a judicial discovery, which Fleites’ lawyers said would expose “the shadowy operations of MindGeek and those it controls” by exposing the defendant’s financial relationships. “When money flows into the MindGeek network, which may relate to the ownership of revenue-generating porn sites, it is a matter of analyzing the jurisdiction of the court,” the judge said in the advisory opinion. “As the Court sees it, financial benefit from the sexual exploitation of minors is the crux of this case.”
On Saturday, activist investor Bill Ackman of Pershing Square Holdings, who has previously advocated for Visa and Mastercard’s role in enabling MindGeek’s ability to make money from child pornography, published A topic on Twitter about the judgment of the case.
Ackman wrote in part: “Visa’s conduct here is unwarranted and likely to cause immeasurable financial and reputational damage to the company” as well as “creating significant personal and potential criminal liability to the Board of Directors.” According to Akman, neither he nor Pershing Square has any economic interest, long or short, in Visa, Mastercard, or any other payments company, bank or financial institution.
According to Ackman, after reading the Times story about Fleites and Pornub, he reached out to executives at Visa and Mastercard to express concerns about their role in enabling MindGeek’s business. Shortly thereafter, both companies cut consumer payment processing to MindGeek sites; “Within a day or so, MindGeek removed more than 10 million illegal videos, 80% of their content,” said the hedge fund manager. However, both soon reactivated company-to-company payments for purchases of ads on MindGeek sites and for subscriptions to “premium” content, which represents about 90% of the company’s revenue per Ackman.
Ackman wrote that Visa’s CEO, Alfred Kelly, “should know that the majority of child trafficking victims are from low-income families including Black and Brown families. I would recommend that Visa’s board of directors, and separately Mr. Kelly, appoint a white-collar and counselor.” independent criminal court. The topic was sealed with “Et tu, Mastercard?”
Michael Bow, partner at Brown Rudnick and lead attorney representing Fleites in the lawsuit, said in a statement: “The court’s determination that our appropriately detailed Complaint filed with Visa was involved in a criminal conspiracy to monetize child pornography, which means that Visa And other credit card companies will finally face the civil and possibly criminal consequences of this unreasonable and illegal activity.”
The case, Serena Fleites v. MindGeek SARL et al. , is the Docket No. 2:21-cv-04920-CJC-ADS in US District Court for the Central District of California.
Fleites is one of 34 individual plaintiffs who filed a lawsuit last year against Pornhub and MindGeek, alleging the exploitation and exploitation of child pornography, rape videos, trafficked content, stolen content and other non-consensual content. The lawsuit is the first application to date of influential and corrupt Rackete Organizations (RICO) child pornography and trafficking laws that seek to hold financial institutions responsible for illegal behavior monetized through the systems of the companies that process their payments.
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