PHOENIX — A founding father of the profitable categorized web site Backpage.com will face his second trial on fees of facilitating prostitution and laundering cash in what authorities say was a scheme to knowingly promote adverts for intercourse on the location.
Jury choice for Michael Lacey and 4 former Backpage staff is scheduled to start Tuesday in federal courtroom. Their first trial resulted in a mistrial in September 2021 when a decide concluded prosecutors had too many references to youngster intercourse trafficking in a case the place nobody confronted such a cost.
Lacey had based the Phoenix New Times weekly newspaper with James Larkin, who was charged within the case and died by suicide in July. Lacey and Larkin held possession pursuits in different weeklies akin to The Village Voice and finally 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.
In all, 5 former Backpage operators have pleaded not responsible to fees of facilitating prostitution. Of the 5, Lacey and two others have pleaded not responsible to cash laundering fees.
The web site’s advertising director has pleaded responsible to conspiring to facilitate prostitution and acknowledged he participated in a scheme to present free adverts to prostitutes to win over their enterprise. Additionally, the CEO of the corporate when the federal government shut the location down, Carl Ferrer, pleaded responsible to a separate federal conspiracy case in Arizona and to state cash laundering fees in California.
Prosecutors say Backpage’s operators ignored warnings to cease working prostitution adverts, some involving youngsters. They are accused of giving free adverts to prostitutes and cultivating preparations with others who labored within the intercourse commerce to get them to put up adverts with the corporate.
Authorities say Backpage staff would determine prostitutes by means of Google searches, then name and provide them a free advert. The web site is also accused of getting a enterprise association wherein it might place adverts on one other web site that lets clients put up opinions of their experiences with prostitutes.
Backpage’s operators stated they by no means allowed adverts for intercourse and used folks and automatic instruments to attempt to delete such adverts and keep the content material on the location was protected by the First Amendment. Prosecutors stated the moderation efforts by the location have been aimed toward concealing the true nature of the adverts.
Lacey is also accused of utilizing cryptocurrency and wiring cash to overseas financial institution accounts to launder revenues earned from the location’s advert gross sales after authorities say banks raised considerations that they have been getting used for unlawful functions.
At trial, the Backpage defendants are barred from citing a 2013 memo by federal prosecutors who examined the location and stated on the time that they hadn’t uncovered proof of a sample of recklessness towards minors or admissions from key individuals that the location was used for prostitution.
In the memo, prosecutors had stated witnesses testified Backpage made substantial efforts to stop felony conduct on its web site and coordinated such efforts with regulation enforcement companies. The doc was written 5 years earlier than Lacey, Larkin and the opposite former Backpage operators have been charged within the Arizona case.
A Government Accountability Office report launched in June 2021 stated the FBI’s means to determine victims and intercourse traffickers had decreased considerably after Backpage was seized by the federal government, as a result of regulation enforcement was acquainted with the location and Backpage was usually attentive to requests for data.
U.S. District Judge Susan Brnovich, who had declared a mistrial in the course of the first try and attempt the Backpage defendants, had allowed proof displaying that individuals have been trafficked utilizing the location, however cautioned prosecutors to not linger on particulars of the abuse. “It seemed the government abused that leeway,” Brnovich stated when declaring a mistrial.
In a pretrial ruling, U.S. District Judge Diane Humetewa, who’s presiding over the second trial, repeated that warning to prosecutors.
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