Michael Lacey, one of the founders of Backpage.com, has been sentenced to five years in prison and fined $3 million for money laundering in a case involving allegations of promoting and profiting from prostitution through classified ads.
Lacey, 76, was convicted of international concealment money laundering last year. The jury deadlocked on other charges, but Lacey still faces about 30 prostitution facilitation and money laundering charges.
The site reportedly generated $500 million in prostitution-related revenue before it was shut down by the government in 2018.
Lacey’s lawyers claim he was focused on running an alternative newspaper chain and was not involved in Backpage’s day-to-day operations.
However, Judge Diane Humetewa stated during sentencing that Lacey was aware of the allegations against Backpage and did nothing about them.
Two other Backpage executives, John Brunst and Scott Spear, were also convicted and sentenced to 10 years in prison.
Prosecutors argued that the defendants were motivated by greed, promoted prostitution under the guise of a legitimate business, and misled anti-trafficking organizations and law enforcement about Backpage’s true nature.
Yvonne Ambrose, whose daughter was trafficked and killed through Backpage, spoke about her pain during the trial.
Prosecutors alleged that Lacey used cryptocurrency and wired money to foreign bank accounts to launder revenues from the site’s ad sales.
Backpage employees allegedly identified prostitutes through Google searches and offered them free ads. The site also had a business arrangement to place ads on another site for reviews of experiences with prostitutes.
Carl Ferrer, the former CEO of Backpage, pleaded guilty to charges in Arizona and California.
A memo from federal prosecutors in 2013 mentioned that there was no evidence of recklessness toward minors on Backpage at that time.
The FBI’s ability to identify victims and traffickers reportedly decreased after Backpage was seized by the government.
Prosecutors claimed that moderation efforts by Backpage were aimed at concealing the true nature of the ads.
