A founder of the lucrative classifieds site Backpage.com is facing a second trial on charges of facilitating prostitution and money laundering in what authorities say was a deliberate scheme to sell sex ads on the site.
Jury selection for Michael Lacey and four former Backpage employees is scheduled to begin Tuesday in federal court.their first trial ended in a mistrial In September 2021, a judge concluded that prosecutors had made too many references to child sex trafficking in a case where no one faced such charges.
Lacey co-founded the weekly Phoenix New Times with James Larkin, who was charged in the case and who committed suicide in July. Lacey and Larkin held ownership interests in other weekly publications, including The Village Voice, and eventually sold their newspaper in 2013. But they kept Backpage, which authorities say generated $500 million in prostitution-related revenue from its founding in 2004 to 2018. shut down by the government.
In all, five former Backpage operators have pleaded not guilty to charges of facilitating prostitution. Of the five, Lacey and two others have pleaded not guilty to money laundering charges.
the site’s Marketing director pleads guilty Conspired to facilitate prostitution and admitted he participated in a scheme to provide prostitutes with free advertising to win business. Furthermore, when the government shut down the site, the company’s CEO, Carl Ferrer pleads guilty Another federal conspiracy case in Arizona and money laundering charges in California.
Backpage’s operators ignored warnings to stop running prostitution ads, some of which involved children, prosecutors said. They are accused of providing free advertising to prostitutes and entering into arrangements with other sex workers to advertise with the company.
Backpage employees would identify prostitutes through Google searches and then call them with free advertising, authorities said. The site is also accused of having a commercial arrangement to place an advertisement on another site for customers to post reviews of their experiences with prostitution.
The operators of Backpage say they never allow pornographic ads and use human and automated tools to try to remove such ads and maintain that the content on the site is protected by the First Amendment. Prosecutors said the site’s moderation efforts were designed to obscure the true nature of the ads.
Lacey is also accused of using cryptocurrencies and funneling funds into foreign bank accounts to launder proceeds from ad sales on the site, after authorities said banks feared the cryptocurrencies were being used for illicit purposes.
At trial, federal prosecutors barred the Backpage defendants from bringing up the 2013 memo, and prosecutors examined the site and said at the time they found no evidence of reckless behavior toward minors and no key players admitted the site had been used. For prostitution.
Prosecutors said in the memo that witnesses testified that Backpage made significant efforts to prevent criminal activity on its site and coordinated such efforts with law enforcement agencies. The document was written five years before Lacey, Larkin and other former Backpage operators were charged in the Arizona case.
A June 2021 Government Accountability Office report said the FBI’s ability to identify victims and sex traffickers declined significantly after Backpage was seized by the government because law enforcement was familiar with the site and Backpage routinely responded to requests for information.
In her first attempt to try the Backpage defendants, U.S. District Judge Susan Brnovich declared a mistrial, allowing evidence that people were being trafficked through the site but warning prosecutors not to linger on details of the abuse. “The government appears to have abused that leeway,” Brnovich said in announcing the mistrial.
U.S. District Judge Dianne Humetwa, who presided over the second trial, reiterated that warning to prosecutors in a preliminary ruling.