PHOENIX (CN) — Two months after Backpage.com founder Michael Lacey was convicted of money laundering, federal prosecutors indicate that they intend to retry the newspaperman with 84 prostitution and money laundering counts on which the jury deadlocked.
Lacey, co-founder of the Phoenix New Times who founded the now-defunct classified ads website Backpage in 2004, was indicted in 2018 along with four employees on a total 100 counts of conspiracy, facilitating prostitution in violation of the federal Travel Act and multiple forms of money laundering. Eighty-six of those counts were brought against Lacey.
After five years of litigation and two trials, one of which ended in mistrial in 2021, Lacey was found guilty in November of just one count of international concealment money laundering and not guilty of another money laundering count. The jury, which had been deadlocked for most of its six-day deliberation, didn’t convict or acquit Lacey on any of the 84 remaining counts against him.
Federal prosecutors filed their intention to bring those counts back to trial for a third time Tuesday evening, apparently unsatisfied with the potential 20 years in prison the 75-year-old Lacey could face for his single conviction.
Meanwhile, Lacey and two former Backpage underlings — executive vice president Scott Spear and chief financial officer John Brusnt, each found guilty on various charges — are awaiting a decision on their December motion for a new trial. Attorneys for the three argue that information found in two late disclosures from the government, along with other omissions throughout the nearly three-month trial, could have changed the minds of the jurors and proven their clients' innocence.
A ruling on that motion is contingent on whether U.S. District Judge Diane Humetewa rules in their favor on their Rule 29 motions for acquittal. If she acquits them, the motion for a new trial would be moot.
Federal Rule 29 allows a judge to declare a defendant innocent based on evidence presented at the time a motion is filed — even if a jury finds the defendant guilty. The Barack Obama appointee reserved her right to rule on the motions posttrial soon after they were filed in October, about midway through the trial. It’s unclear when she will rule.
It’s unclear how the government’s intentions to retry Lacey will affect the status of those motions. Neither the defense attorneys nor federal prosecutors replied to requests for comment.
Humetewa is the third federal judge to preside over this case, umpiring its second trial that featured six motions for mistrial and more than two weeks of testimony from former Backpage CEO Carl Ferrer, who already pled guilty when arrested in 2018.
Ferrer repeatedly told the court that the ads featured on Lacey’s website promoted prostitution, and that Lacey and the gang did everything they could to conceal their illegal activity from law enforcement. But defense attorneys painted Ferrer as a liar whose testimony only served to receive a lower prison sentence in exchange for cooperation with the government.
While the Backpage defense doesn’t assert that none of the millions of ads on the site were for prostitution, they claim that the high level managers didn’t know of the content of the ads, and therefore can’t be held liable.
Operations managers Andrew Padilla and Joye Vaught, who ran the website’s moderation team and would have known better than higher level executives exactly what was posted on the site, were found not guilty of the conspiracy and prostitution charges lodged against them.
No new trial or hearing dates have been set yet.
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