PHOENIX (CN) — Opening statements in the federal trial against the former owners and employees of Backpage.com and its parent company had only just begun as the clock struck 4:30 p.m. Thursday evening.
After three days of painstaking jury selection, whittling a panel of nearly 2,000 to just 16, those left standing were primed on the projected three-month trial by attorneys for the federal government and for only two of five defendants, who collectively face a 100-count felony indictment on charges of facilitating prostitution, money laundering and conspiracy.
Attorneys for the remaining three defendants will give opening statements next week.
“My client, in good faith, believed that he was not facilitating — and Backpage was not facilitating — prostitution,” attorney Paul Cambria said on behalf of Michael Lacey. “The only money that Backpage got from anybody who advertised was the cost of an ad.”
Lacey founded the alt-weekly Phoenix New Times in 1970 with James Larkin, who died by suicide on July 31. The New Times evolved into Village Voice Media, a media holding company overseeing more than a dozen newspapers and other businesses across the country. One such business was Backpage, a classified advertising website co-founded in 2004 by the pair and former Backpage CEO Carl Ferrer.
Ferrer, who will testify later in trial, pleaded guilty in 2018 to conspiracy to facilitate prostitution alongside Backpage sales and marketing director Dan Hyer, who is also expected to testify.
Backpage quickly gained notoriety for its adult section, which prosecutor Andrew Stone told the jury produced more than 90% of Backpage’s revenue.
“For the better part of a decade, these five individuals owned and operated the number one prostitution advertising website in the country,” Stone said. “That wasn’t a mistake. They worked to achieve that ranking.”
Stone displayed on a monitor an image of what Backpage’s adult section looked like in 2015. It included listings for “escorts,” “body rubs,” “dom/fetish,” “GFE,” and more.
“They used coded terms,” he said. “The biggest coded term was escort. It meant prostitution.”
He scrolled through a few advertisements that serve as counts in the indictment, explaining acronyms like “GFE,” which means “girlfriend experience.”
While Stone acknowledged that the language on its face may not directly imply prostitution, he pointed to a website called The Erotic Review, a way customers could review the services advertised on Backpage and similar sites. Stone showed an escort ad on Backpage containing a link to that person’s review page, which listed actions like “sex,” “blowjob,” and “cum in mouth.”
“The Erotic Review described itself as the consumer review for escorts,” he said. “Just like Backpage, when they say escorts, they mean prostitutes.”
Stone went through each defendant, painting a picture of their involvement in Backpage’s operations.
Lacey, the newspaperman, was in charge of handling bad press the site received. Executive Vice President Scott Spear managed the company’s relationship with The Erotic Review while Andrew Padilla and Joye Vaught, operations manager and assistant, oversaw a team of moderators tasked with removing certain words that raised red flags.
Stone previewed emails the jury will read that he says prove the executives tried to censor certain words to make ads “look less like prostitution ads.”
Cambria countered that the censorship was a good faith effort to rid the site of illegal prostitution advertised against the executives’ wishes.
“If you take words out, you are not promoting a criminal activity,” he said. “You are fighting against it.”
Cambria read thank you letters from the Denver Police and the FBI sent to Backpage executives for assisting in investigations into prostitution and trafficking cases.
“You think they all got fooled?” he asked. “Even the head of the FBI thanked them for the assistance they provided.”
Stone said the last defendant, John Brunst, was pivotal in finding alternative revenue streams for Backpage after major credit card companies stopped doing business with Backpage under the pressure of Cook County, Illinois, Sheriff Tom Dart. But Brunst’s attorney, Gary Lincenberg, said Brunst had nothing to do with the ads on Backpage.
As chief financial officer of Village Voice Media, Brunst managed finances for more than a dozen businesses under the parent company, including selling Backpage to Ferrer in 2015. But he never operated the website, interacted with customers or even saw any of the ads, Lincenberg told the jury.
“He never promoted any prostitution,” Lincenberg said. “He never concealed any money.”
U.S. District Judge Dian Humetewa ended the week Thursday, letting the jury out early for Labor Day weekend. The jury is made up of eight men and eight women, and four people of color.
Two members of the jury said during questioning they believe the defendants should have to testify to prove their innocence, which isn’t required legally. The issue became a point of contention for defense attorneys, who strove to remove anyone who shared that sentiment during jury selection.
Opening arguments will continue Wednesday morning.
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