A federal jury in Phoenix delivered a mixed verdict Thursday in the retrial of former Backpage.com owner Mike Lacey and several company executives. Lacey was found guilty on one count of international concealment money laundering, while two former executives were convicted of facilitating prostitution and some financial crimes.

Verdict Details and Defendant Outcomes

The jury found former Backpage.com owner Mike Lacey guilty on one count of international concealment money laundering. This conviction related to a January 2017 transfer of $16.5 million to a bank in Hungary, which the indictment stated Lacey knew represented gains from illegal activity and that he attempted to conceal. The jury deadlocked on prostitution-related charges filed against Lacey, who was also a former editor of the Phoenix New Times. More than 80 counts against Lacey resulted in a deadlock.

Two former Backpage executives, Scott Spear and John “Jed” Brunst, were found guilty of conspiring to use the website to facilitate prostitution. The jury also found Spear and Brunst guilty of some financial crimes, but not guilty of others. Former Backpage executives Joy Vaught and Andrew Padilla were found not guilty on all charges. Padilla and Vaught were described as former Backpage employees involved in moderating ads on the site.

Paul Cambria, Lacey’s attorney, stated after the verdict that the conviction was "one count of a hundred" and indicated a basis to have it vacated. The reading of the verdict, which covered a litany of charges, took more than 30 minutes. Lacey, 75, shook his head as the jury exited the courtroom.

Trial Proceedings and Jury Deliberations

The jury was initially scheduled to begin deliberations the last week of October but was dismissed by U.S. District Judge Diane Humetewa on November 1 due to a potential COVID outbreak in the courtroom. Deliberations reconvened on Tuesday, November 14. On Wednesday afternoon, the jury sought clarification from Judge Humetewa regarding what would happen if they could not reach a verdict on one of the counts. On November 14, two jurors sent a note to Judge Humetewa, stating they were deadlocked on all but one charge. Judge Humetewa then issued an "Allen instruction," also known as a "dynamite charge," encouraging further deliberation to reach unanimity.

The trial spanned eleven weeks. Jurors sent multiple questions to Judge Humetewa concerning the underlying allegations, which claimed the defendants conspired to facilitate business enterprises involved in state prostitution offenses in violation of the U.S. Travel Act. One male juror, who spoke after the verdict, described the experience as the hardest thing he had ever done, noting that the laws were poorly written and the jury instructions confusing. Another juror, who declined to give her name, expressed relief that the trial was over.

The verdict marks the conclusion of a protracted, years-long process. This process included the seizure of defendants’ assets, strategies by federal prosecutors, and a mistrial. The current retrial began in August 2023 under Judge Humetewa.

Prosecution's Arguments and Defense Contentions

The government’s case centered on the accusation that the defendants conspired to facilitate and promote prostitution through the operation of Backpage.com. Prosecutor Austin Berry, an attorney with the U.S. Department of Justice’s obscenity section, presented the government’s rebuttal to the defense’s closing statements. Berry portrayed standard online industry practices, such as moderation, aggregation, and reciprocal links, as evidence of knowledge of wrongdoing. He argued that generalized knowledge of possible misuse of an interactive website by its users is sufficient to convict former owners, operators, and employees.

Berry stated that the jury should disregard mentions of content moderation practices, asserting that "Moderation is a game. It’s a joke. It’s not good faith." He also indicated that the prosecution was not required to prove that any defendant had specific knowledge of the particular ads in question. Another prosecutor, Andrew Stone, affirmed the government’s position since 2018 that its case does not rely on defendants' knowledge of specific ads but on issues related to the "maintenance of the site."

The defense argued that to be found guilty, the defendants "must have specifically intended to facilitate the business enterprises at hand — those connected to the 50 charged ads." The defense contended that the prosecution could not demonstrate that any of the five defendants on trial had seen these 50 ads. The defendants were charged with 50 counts of violating the Travel Act for publishing ads for escorts, dating, and massage on Backpage, as well as one count of conspiracy to violate the Travel Act. Lacey and two of the executives also faced additional money laundering and conspiracy charges.

Key Facts

  • Former Backpage.com owner Mike Lacey was found guilty on one count of international concealment money laundering.
  • The jury deadlocked on prostitution-related charges against Mike Lacey.
  • Former Backpage executives Scott Spear and John “Jed” Brunst were found guilty of using the website to facilitate prostitution and some financial crimes.
  • Former Backpage executives Joy Vaught and Andrew Padilla were found not guilty on all charges.
  • The conviction against Lacey involved a $16.5 million transfer to a Hungarian bank in January 2017.
  • The trial was a retrial, with the current proceedings beginning in August 2023 under U.S. District Judge Diane Humetewa.