McMaster was referring to a November agreement with 40 attorneys general in which Craigslist said it would take a number of steps to combat online prostitution, including charging people who post ads in the "erotic services" section $5 to $10 and requiring them to submit a working phone number to use the site. The information can be used by law enforcement to investigate suspected illegal activity.
McMaster and other attorneys general said today that Craigslist was not doing enough to keep prostitution and pornography off the site and said the company could potentially face lawsuits or criminal investigations, though McMaster was the only one who publicly threatened the site with possible criminal prosecution.
"I think the walls are really closing in on Craigslist," said Illinois Attorney General Lisa Madigan.
The threatened prosecution comes as Craigslist has come under increasing scrutiny because of several high-profile alleged crimes that have involved the popular Web site, most recently the so-called "Craigslist Killer," who police say targeted women who advertised exotic services on the site.
But, some attorneys questioned whether a successful case could be brought against Craigslist. Under federal law, Web sites like Craigslist generally are not liable for content posted by their users.
"This sounds like posturing on the part of a state official, an effort to use what limited leverage he has over Craigslist," said David Ardia, the director of the Citizen Media Law Project at Harvard University's Berkman Center for Internet and Society. "I think it's very unlikely that criminal or civil liability would exist."
McMaster said Craigslist could face a criminal investigation, and possible prosecution, unless it removes "the portions of the Internet site dedicated to South Carolina and its municipal regions, which contain categories for and functions allowing for the solicitation of prostitution and the dissemination and posting of graphic pornographic material."
Meanwhile, Craigslist lawyers met today with the attorneys general of Illinois, Connecticut and Missouri, who asked for better policing or the removal of ads in the "erotic services" section of the site, which Madigan said was essentially "nothing more than an Internet brothel."
In a statement, Buckmaster said the company had a "productive meeting" with the attorneys general.
"We are optimistic that our shared concerns can be addressed while preserving the beneficial aspects of Craigslist enjoyed by tens of millions of law-abiding Americans each month, without compromising the quintessentially American values of free speech embodied in our Constitution," he said.
Madigan and Connecticut Attorney General Richard Blumenthal said they did not threaten to bring criminal prosecutions against company officials at the meeting, but Blumenthal said the company was given "a short time frame" to respond.
"Either they find a way to police this... or we're going to need to take that section of the Web site down," Madigan said.
The threat from McMaster is the latest move in an ongoing effort to combat allegedly illegal activity online and comes
AG: Craigslist Not Doing Enough to Stop Prostitution
"Recent national events, along with ongoing law enforcement efforts in South Carolina, indicate that craigslist has not installed sufficient safeguards since November to prohibit the Internet site from being used as a vehicle to advertise or solicit prostitution," McMaster wrote.
Philip Markoff, 23, is suspected of using Craigslist to lure three women to upscale hotels, where he allegedly robbed them and killed one of them. Investigators believe Markoff contacted the women through Craigslist ads in which they offered erotic massages. Markoff, who has been dubbed the "Craigslist Killer" by the media, has pleaded not guilty.
Earlier this month, Michael John Anderson, 20, of Savage, Minn., was sentenced to life in prison for killing Katherine Ann Olson, who had responded to an ad for a nanny that Anderson placed on the site. And New York radio reporter George Weber was stabbed 50 times in his Brooklyn apartment earlier this year, allegedly murdered by a man who answered Weber's ad on Craigslist, offering $60 for "rough sex."
Craigslist Founder: No Plans to Change 'Erotic Services'
In a statement released last week, Craigslist CEO Jim Buckmaster said, "We look forward to meeting with Attorney General Madigan to discuss any and all ideas she and others may have for further eliminating illegal activity from Craigslist, while preserving all of the functionality and positive attributes that are valued by the overwhelmingly law-abiding Craigslist community of users."
In an interview last month with ABC News, Craigslist founder Craig Newmark denied that the site "facilitates" prostitution and said he has no plans to change the "erotic services" section.
Buckmaster told "Nightline" that the Craigslist community -- about 50 million people use the site a month -- has a low incidence of crime. "Now, the risk is not zero, and no occurrence of violent crime is acceptable," Buckmaster said.
"I'm very proud that our site is composed of people who are overwhelmingly trustworthy and good. I am very proud that there is very little crime on our site, proportionately," Newmark said. "Compare that to any other American community. Look at the numbers."