PHOENIX (CN) — A federal jury spared Michael Lacey, founder and former owner of the controversial classified advertising website Backpage.com, convictions for facilitating prostitution Thursday but did find him guilty of one count of international concealment money laundering.
The conviction carries a potential sentence of up to 20 years in prison.
After more than a week of deliberations that saw the jury deadlocked on 99 of the 100 felony counts of conspiracy, money laundering and violating the federal Travel Act by facilitating prostitution, jurors came back with a mix of guilty, not guilty and no verdict on the charges against five defendants.
The jury found Lacey, founder and former editor of the highly-regarded alternative weekly the Phoenix New Times, not guilty on one count of international promotional money laundering, but two other former Backpage executives were not so lucky.
Scott Spear, former executive vice president, was found guilty of conspiracy, 18 prostitution counts and 23 money laundering counts.
Former chief financial officer John Brunst was also found guilty of conspiracy and 31 counts of money laundering.
Spear and Brunst could face up to five years in prison for the conspiracy conviction and up to 20 for each of the money laundering convictions. Spear could face an additional five years for each of his 18 prostitution convictions.
The jury returned no verdict on 84 of the 86 counts against Lacey, including conspiracy, facilitating prostitution and multiple forms of money laundering.
The jury found former operations manager Andrew Padilla and former assistant operations manager Joye Vaught not guilty of conspiracy or 50 counts of facilitating prostitution. They faced no money laundering charges.
"We thank the jury for their service, and we feel that they returned the right verdict," attorney David Eisenberg said on behalf of Padilla, who declined to comment.
Joy Bertrand, attorney for Vaught, had more to say.
"My client should have never been in this case," she said outside the ceremonial courtroom in the federal courthouse in Phoenix. "She was charged and pressured to cooperate and assist the government, and she had the courage to say no. That she would not lie to save her skin.
"I'm so proud of her," she added, her voice cracking as she spoke.
Bertrand said the case "should never have been brought."
"It's an offense to the First Amendment, and I hope my colleagues fight to the bitter end," she said.
Defense attorneys in the case consistently brought up the First Amendment as a defense for the adult ads posted on Backpage from 2004 to 2018, also claiming that Section 230 of the Communications Decency Act should have immunized defendants from the allegations against them. But the defense was precluded from using Section 230 as a defense, and was often stifled from arguing free speech in the way defense attorneys wanted to.
"They come after this platform, they come after other platforms next," she said. "This affects everybody."
Vaught declined to comment as well.
Attorneys for Lacey, Spear and Brunst did the same, and told reporters their clients won't speak to media for now.
Lacey's single conviction stems from a $16.5 million payment to a bank in Hungary, which prosecutors say was an attempt to conceal ill-gotten gains from his website. But the jury did not decide whether he committed the crimes to acquire said gains.
"I think that'll resolve itself," Bertrand said. "He's got outstanding counsel."
His only not-guilty verdict pertains to a $6,450 payment to a web developer in India.
He faced 86 counts in total, the most of any defendant. Spear faced 78, and Brunst faced 85. Padilla and Vaught each faced 51. The jury returned a total of 75 convictions on 100 counts.
Lacey and the others ran Backpage from 2004 to 2015, when he and his business partner James Larkin, who died by suicide in August, sold it to former CEO Carl Ferrer. The FBI seized it in 2018 after more than a decade of controversy surrounding prostitution and sex trafficking, launching what became a five-year legal slog.