Backpage founder convicted of 1 count of money laundering. Arizona jury deadlocks on 84 other counts
PHOENIX –
Michael Lacey, a founding father of the profitable categorized website Backpage.com, was convicted Thursday on a single rely of cash laundering and acquitted on one other. But an Arizona jury deadlocked on 84 different counts towards him in a case that alleged he participated in a scheme to promote intercourse adverts, main the choose to declare a mistrial.
U.S. District Judge Diane Humetewa in Phoenix declared the mistrial after jurors deliberated for six days. It marked the second time a mistrial has been declared within the case towards the positioning’s co-founder.
Lacey’s first trial in 2021 led to a mistrial when one other choose concluded prosecutors had too many references to youngster intercourse trafficking in a case the place nobody confronted such a cost. Lacey declined remark as he walked out of a Phoenix courtroom.
Lacey, 75, was tried on a complete of 86 prison counts within the case towards him and 4 different Backpage staff.
Chief Financial Officer John Brunst was convicted of 1 rely of conspiracy to violate the Travel Act — a federal regulation barring using interstate commerce to facilitate prostitution in violation of state legal guidelines — and greater than 30 cash laundering counts.
Executive Vice President Scott Spear was convicted of 1 rely of conspiracy to violate the Travel Act, greater than a dozen counts of facilitation of prostitution and about 20 cash laundering counts.
Operations supervisor Andrew Padilla and assistant operations supervisor Joye Vaught had been acquitted of a conspiracy cost and dozens of counts of facilitation of prostitution.
Joy Bertrand, who represented Vaught, stated her shopper was relieved by the acquittals in a case that “ruined her life.”
Before launching Backpage, Lacey based the Phoenix New Times weekly newspaper with James Larkin, who was charged within the case and died by suicide in late July a couple of week earlier than the second trial towards Backpage’s operators was scheduled to start.
Lacey and Larkin held possession pursuits in different weeklies equivalent to The Village Voice and in the end offered their newspapers in 2013. But they held onto Backpage, which authorities say generated $500 million in prostitution-related income from its inception in 2004 till 2018, when it was shut down by the federal government.
Prosecutors had argued that Backpage’s operators ignored warnings to cease operating prostitution adverts, some involving youngsters. The operators had been accused of giving free adverts to intercourse employees and cultivating preparations with others who labored within the intercourse commerce to get them to submit adverts with the corporate.
Backpage’s operators stated they by no means allowed adverts for intercourse and assigned staff and automatic instruments to attempt to delete such adverts. Their authorized crew maintained the content material on the positioning was protected by the First Amendment.
Prosecutors additionally stated Lacey used cryptocurrency and wired cash to international financial institution accounts to launder revenues earned from the positioning’s advert gross sales after banks raised issues that they had been getting used for unlawful functions.
Lacey’s lawyer Paul Cambria had stated his shopper was centered on operating an alternate newspaper chain and wasn’t concerned in day-to-day operations of Backpage. Cambria stated there was no proof Lacey noticed the 50 adverts at concern earlier than his trial.
Cambria additionally stated Backpage cooperated with authorities by responding to subpoenas for information and that the help supplied by the positioning led to expenses towards pimps and prostitutes. He confirmed jurors a May 2011 certificates of appreciation that was issued to Carl Ferrer, Backpage’s chief govt on the time the federal government shut down the positioning, and signed by then-FBI Director Robert Mueller for the positioning’s help in an investigation. Based on Backpage’s cooperation with regulation enforcement, the lawyer stated Lacey had a good-faith perception Backpage was being operated lawfully.
A U.S. Government Accountability Office report launched in June 2021 stated the FBI’s skill to determine victims and intercourse traffickers had decreased considerably after Backpage was seized by the federal government, as a result of regulation enforcement was accustomed to the positioning and Backpage was typically conscious of requests for data.
In 2018, the positioning’s gross sales and advertising and marketing director, Dan Hyer, had pleaded responsible to conspiring to facilitate prostitution and acknowledged he participated in a scheme to offer free adverts to prostitutes to win over their business. Ferrer additionally pleaded responsible to a separate federal conspiracy case in Arizona and to state cash laundering expenses in California.
