Founder of to Face Second Trial on Prostitution and Money Laundering Charges

Founder of to Face Second Trial on Prostitution and Money Laundering Charges

Jury selection for Michael Lacey, the founder of classified site, and four former Backpage employees will resume for a second day in federal court. Lacey and his co-defendants are facing charges of facilitating prostitution and money laundering in connection with the alleged scheme to knowingly sell ads for sex on the site. This is Lacey’s second trial, as the first trial ended in a mistrial in September 2021 due to concerns over references to child sex trafficking.

Lacey, along with James Larkin, had founded the Phoenix New Times weekly newspaper and held ownership interests in other weeklies such as The Village Voice. They retained ownership of Backpage, which authorities claim generated $500 million in prostitution-related revenue from 2004 to 2018 when it was shut down by the government.

Five former Backpage operators, including Lacey, have pleaded not guilty to charges of facilitating prostitution. Lacey and two others have also pleaded not guilty to money laundering charges. The site’s marketing director has pleaded guilty to conspiring to facilitate prostitution and admitted to participating in a scheme to provide free ads to prostitutes.

Prosecutors allege that Backpage’s operators ignored warnings to stop running prostitution ads, including those involving children. They are accused of giving free ads to prostitutes and establishing arrangements with individuals in the sex trade to encourage them to post ads on the site. Backpage employees allegedly identified prostitutes through Google searches and offered them free ads. The site is also accused of having a business arrangement with another site that allowed customers to post reviews of their experiences with prostitutes.

Lacey is additionally accused of using cryptocurrency and wiring money to foreign bank accounts to launder revenues earned from the site’s ad sales. Prosecutors claim that banks raised concerns about the funds being used for illegal purposes.

During the trial, the Backpage defendants are not allowed to bring up a 2013 memo by federal prosecutors that stated they had not found evidence of a pattern of recklessness towards minors or admissions from key participants regarding the site’s use for prostitution. The memo, written five years before the charges were filed, highlighted Backpage’s efforts to prevent criminal conduct on its platform and its cooperation with law enforcement agencies.

The trial is taking place in Arizona, where Backpage was headquartered. The first attempt to try the Backpage defendants resulted in a mistrial, with the judge cautioning prosecutors not to dwell on the details of abuse. U.S. District Judge Diane Humetewa is presiding over the second trial.


Author: CrimeDoor

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