Backpage Co-Founder Michael Lacey Sentenced to Five Years in Prison for Money Laundering
Michael Lacey, co-founder of Backpage.com, sentenced to five years in prison and fined $3 million for money laundering in connection with the site’s prostitution-related revenue.
Bollywood Fever: Michael Lacey, a co-founder of the classified site Backpage.com, was sentenced to five years in prison on Wednesday and fined $3 million after being convicted of a single money laundering count. This case is part of a broader investigation into a yearslong scheme that allegedly profited from prostitution through classified ads.
Lacey, 76, was convicted last year of international concealment money laundering, though the jury deadlocked on 84 other charges related to prostitution facilitation and money laundering. U.S. District Judge Diane Humetewa later acquitted Lacey of dozens of charges due to insufficient evidence, but he still faces around 30 charges related to prostitution facilitation and money laundering.
Prosecutors allege that Backpage.com generated $500 million in prostitution-related revenue from its launch in 2004 until it was shut down by the government in 2018. Lacey’s defense argued that he was more focused on running an alternative newspaper chain and wasn’t involved in Backpage’s day-to-day operations. However, Judge Humetewa stated that Lacey was aware of the illegal activities and chose to do nothing.
“In the face of all this, you held fast,” Humetewa told Lacey during sentencing. “You didn’t do a thing.”
In addition to Lacey, two other Backpage executives, Chief Financial Officer John Brunst and Executive Vice President Scott Spear, were also convicted and sentenced to 10 years in prison. All three defendants were ordered to report to the U.S. Marshals Service in two weeks to begin serving their sentences.
The prosecution argued that the defendants were driven by greed, disguising Backpage as a legitimate classified business while promoting prostitution. They also accused the defendants of misleading anti-trafficking organizations and law enforcement about the true nature of the site’s business model.
The sentencing follows emotional testimony from Yvonne Ambrose, whose 16-year-old daughter, Desiree Robinson, was trafficked and killed in 2016 by a man who responded to an online sex ad posted on Backpage. “I suffer every day from the loss of my baby,” Ambrose told the judge.
Prosecutors detailed how Lacey used cryptocurrency and foreign bank accounts to launder money earned from the site’s ad sales, especially after banks raised concerns about illegal activities. They also alleged that Backpage employees actively sought out prostitutes to offer them free ads, thus facilitating illegal activities.
The site’s marketing director and CEO, Carl Ferrer, have already pleaded guilty to related charges. Ferrer’s plea includes a federal conspiracy case in Arizona and state money laundering charges in California.
At trial, the defendants were unable to present a 2013 memo from federal prosecutors, which indicated that no evidence of recklessness toward minors or admissions of the site being used for prostitution had been found at that time. However, prosecutors argued that the site’s moderation efforts were aimed at concealing the illegal nature of the ads.
Though Lacey and his co-founder Jim Larkin sold their interest in Backpage in 2015, prosecutors maintained that they retained control over the site until it was seized by the government.
Also Read Other Articles, U.S. Corporations Turn to Foreign Exchange Options Ahead of 2024 Election Fearing Currency Volatility
Jesse Watters Criticizes Kamala Harris, Sparking Controversy with Comments on Presidential Readiness
