Michael Lacey, a founding father of the profitable labeled web site Backpage.com, was convicted Thursday on a single rely of cash laundering and acquitted on one other. However 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 decide to declare a mistrial.
U.S. District Decide 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 founder.
Lacey’s first trial in 2021 resulted in a mistrial when one other decide concluded prosecutors had too many references to little one 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 legal counts within the case towards him and 4 different Backpage staff.
Chief Monetary Officer John Brunst was convicted of 1 rely of conspiracy to violate the Journey Act and greater than 30 cash laundering counts.
Government Vice President Scott Spear was convicted of 1 rely of conspiracy to violate the Journey 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 have been acquitted of a conspiracy cost and dozens of counts of facilitation of prostitution.
Pleasure Bertrand, who represented Vaught, stated her consumer was relieved by the acquittals in a case that “ruined her life.”
Earlier than launching Backpage, Lacey based the Phoenix New Occasions weekly newspaper with James Larkin, who was charged within the case and died by suicide in late July a few week earlier than the second trial towards Backpage’s operators was scheduled to start.
Lacey and Larkin held possession pursuits in different weeklies akin to The Village Voice and in the end offered their newspapers in 2013. However 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 kids. The operators have been accused of giving free adverts to intercourse employees and cultivating preparations with others who labored within the intercourse commerce to get them to put up 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 workforce maintained the content material on the positioning was protected by the First Modification.
Prosecutors additionally stated Lacey used cryptocurrency and wired cash to overseas financial institution accounts to launder revenues earned from the positioning’s advert gross sales after banks raised considerations that they have been getting used for unlawful functions.
Lacey’s lawyer Paul Cambria had stated his consumer was centered on operating another 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 situation 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 prices towards pimps and prostitutes. He confirmed jurors a Could 2011 certificates of appreciation that was issued to Carl Ferrer, Backpage’s chief government 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. Primarily based on Backpage’s cooperation with legislation enforcement, the legal professional stated Lacey had a good-faith perception Backpage was being operated lawfully.
A U.S. Authorities Accountability Workplace report launched in June 2021 stated the FBI’s means to establish victims and intercourse traffickers had decreased considerably after Backpage was seized by the federal government, as a result of legislation enforcement was accustomed to the positioning and Backpage was usually aware of requests for data.
In 2018, the positioning’s gross sales and advertising 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 enterprise. Ferrer additionally pleaded responsible to a separate federal conspiracy case in Arizona and to state cash laundering prices in California.