https://www.azcentral.com/story/news/local/phoenix/2021/08/30/lacey-la...
`Lacey, Larkin accused of aiding prostitution; Backpage trial to begin
`Case 2:18-cr-00422-SMB Document 1254-1 Filed 08/31/21 Page 1 of 8
`
`PHOENIX
`
`Backpage trial set to begin;
`former New Times execs charged
`with aiding prostitution
`
`Richard Ruelas Arizona Republic
`Published 11:41 a.m. MT Aug. 30, 2021
`
`The ad on Backpage.com called her “Nadia” and described her as a slender
`brunette. Though Crystal MacMartin was a blonde, her agency never worried
`much about matching preferred hair color, thinking escorts could say they had
`dyed their hair.
`
`The police report documenting those details and the events of June 22, 2012,
`would describe MacMartin in starker terms: Covered in blood, nearly two dozen
`stab wounds to her back, abdomen and chest, including a fatal one that
`punctured her heart.
`
`Police said the man who summoned her to his Scottsdale apartment, now serving
`a life sentence after pleading guilty to first-degree murder, viciously attacked her
`with a butcher’s knife.
`
`MacMartin would be listed as Victim 6 in a lengthy indictment handed down in
`2018 against the founders of the Backpage website. Her death was used to build
`the case that executives and employees of the since-shuttered website knew they
`were facilitating prostitution and continually turned a blind eye to the
`consequences.
`
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`https://www.azcentral.com/story/news/local/phoenix/2021/08/30/lacey-la...
`Lacey, Larkin accused of aiding prostitution; Backpage trial to begin
`Case 2:18-cr-00422-SMB Document 1254-1 Filed 08/31/21 Page 2 of 8
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`The judge in the case has ruled that federal prosecutors must "sanitize" any
`planned testimony about the murders of women who advertised on Backpage,
`saying details of the murders would be overly prejudicial to the jury.
`
`But the deaths of the women could still be the subject of testimony jurors hear in
`the trial that opens in U.S. District Court on Wednesday, Sept 1.
`
`MacMartin’s sister has been listed by prosecutors as a potential witness. At a
`hearing on Aug. 20, the final one before trial, prosecutors said it was not clear if
`she would be called to testify.
`
`At that same hearing, a defense attorney, Paul Cambria, fretted that he would
`have to fend off a “parade of horribles” introduced by prosecutors in an effort to
`get the jury to see Backpage operations in a negative light.
`
`Cambria, one of the attorneys representing Michael Lacey, who co-founded
`Backpage, said that the case instead should center on something more vital, if
`mundane: A person’s First Amendment right to publish.
`
`“This is a First Amendment case,” Cambria said during the Aug. 20 hearing. “I
`know the government doesn’t want it to be, but it is.”
`
`From Phoenix New Times to prostitution claims
`
`Lacey and another Backpage co-founder, James Larkin, already had made their
`names in the publishing world before starting the website. The pair turned the
`alternative weekly Phoenix New Times into a national juggernaut of tabloids,
`eventually taking over the venerated Village Voice in New York.
`
`As classified advertising moved online, most notably on the website Craigslist,
`New Times employee Carl Ferrer pitched Lacey and Larkin on the idea of starting
`a competing classified advertising website.
`
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`https://www.azcentral.com/story/news/local/phoenix/2021/08/30/lacey-la...
`Lacey, Larkin accused of aiding prostitution; Backpage trial to begin
`Case 2:18-cr-00422-SMB Document 1254-1 Filed 08/31/21 Page 3 of 8
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`The name of it, Backpage.com, came from the literal back page of classified
`advertising in the printed tabloid, which sold at a premium.
`
`Although the website hosted ads for furniture and concert tickets, according to
`prosecutors, most of the revenue came from the adult section.
`
`Lacey, in an email described by prosecutors in the indictment, said such ads had
`long been a fixture in printed tabloids. Lacey described it as being in the
`company's "DNA."
`
`The federal government seized and shut down the Backpage website on the same
`day that Lacey, Larkin and other former executives were indicted.
`
`Ferrer has since pleaded guilty, both for himself and on behalf of Backpage,
`where he was CEO. In his plea, Ferrer acknowledged that he conspired to launder
`revenues from the ads, and that he conspired to sanitize “escort” ads by removing
`photos and words that were indicative of prostitution.
`
`Ferrer, as part of his plea, agreed to help in the prosecution of Lacey, Larkin and
`the other defendants.
`
`Besides Lacey and Larkin, other Backpage executives charged included Scott
`Spear, former executive vice president; John “Jed” Brunst, former chief financial
`officer; Andrew Padilla, operations manager; and Joye Vaught, assistant
`operations manager.
`
`Spear and Brunst were also former executives of New Times.
`
`Lacey and Larkin released a joint statement on Monday, proclaiming their
`innocence. "We have the knowledge that we are not guilty," the statement read,
`"and the determination not to bow before the authoritarian mindset that
`demanded we suppress Constitutionally-protected speech and now prosecutes us
`for having refused to do so."
`
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`https://www.azcentral.com/story/news/local/phoenix/2021/08/30/lacey-la...
`Lacey, Larkin accused of aiding prostitution; Backpage trial to begin
`Case 2:18-cr-00422-SMB Document 1254-1 Filed 08/31/21 Page 4 of 8
`
`Each defendant is charged with 51 counts related to facilitating prostitution.
`Lacey, Larkin, Spear and Brunst face additional charges related to money
`laundering.
`
`Testimony and evidence for those counts will center around complicated financial
`transactions, some involving cryptocurrency.
`
`The company, according to the indictment, was netting more than $100 million
`annually.
`
`Among the assets seized from the executives were the Paradise Valley and Sedona
`homes of Lacey and an apartment in Paris owned by Larkin.
`
`A battle between online sex sales and the First Amendment
`
`Defense attorneys are expected to argue, based on pre-trial briefings and
`hearings, that the online advertisements hosted by Backpage carried the same
`First Amendment protections as advertisements published in the printed
`newspaper.
`
`More so, a federal law, the Communications Decency Act, specifically
`protects online publishers from being liable for content posted by others.
`
`Cambria argued in the pre-trial hearing that jurors should be explicitly told that
`the Backpage ads in question are presumed to be protected speech.
`
`“The possibility of an illegal result (from the ads) still does not remove the
`protection,” Cambria said. “When it isn’t on its face a criminal communication,
`then the First Amendment applies.”
`
`Prosecutors, though, say that Backpage was not just a publisher of the ads, but a
`knowing participant in the business of prostitution. Such conduct, prosecutors
`argue, is not protected speech.
`
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`https://www.azcentral.com/story/news/local/phoenix/2021/08/30/lacey-la...
`Lacey, Larkin accused of aiding prostitution; Backpage trial to begin
`Case 2:18-cr-00422-SMB Document 1254-1 Filed 08/31/21 Page 5 of 8
`
`According to pre-trial briefings, the government has more than 500,000 emails
`that show Backpage executives not only knew they were involved in the
`prostitution business, but they also worked to make it more lucrative.
`
`What was being offered in the classified ads posted on Backpage was
`intentionally occluded, prosecutors say. The ads were written in a code known to
`frequent buyers. Someone posting about 80 roses, for example, wanted that
`many dollar bills, not flowers.
`
`Another coded phrase, “new in town,” was, according to prosecutors, used by
`people trafficking girls from place to place. Despite being told by anti-trafficking
`advocates the meaning of that term, the indictment alleges, Backpage accepted
`ads with that phrase for seven years.
`
`Prosecutors say the emails show executives knowingly discussed how to balance
`keeping law enforcement and reporters at bay, while still keeping customers
`happy. Various levels of nudity and language were allowed, the indictment says,
`depending on whether Backpage was feeling scrutiny from outsiders.
`
`The indictment listed the stories of five victims who used Backpage for
`prostitution advertisements while under 18. It is not clear how many women who
`were advertised on Backpage might be called to testify before the jury.
`
`In a May filing with the court, prosecutors said that any former prostitutes who
`do take the stand "will testify about how www.Backpage.com made it easy for
`them to enter the prostitution life and to be trafficked."
`
`Beyond that testimony, the bulk of the prosecution's case will be documents and
`emails sent among Backpage employees, Assistant U.S. Attorney Kevin Rapp told
`Judge Susan Brnovich at the Aug. 20 hearing.
`
`Rapp said that “95% of the evidence in this case came from the defendants. They
`gave it to us.”
`
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`https://www.azcentral.com/story/news/local/phoenix/2021/08/30/lacey-la...
`Lacey, Larkin accused of aiding prostitution; Backpage trial to begin
`Case 2:18-cr-00422-SMB Document 1254-1 Filed 08/31/21 Page 6 of 8
`
`In one of those emails, Lacey drafted an editorial that seemed to defend
`Backpage’s participation in prostitution.
`
`“Backpage is part of the solution,” he wrote in the essay, as quoted in the
`indictment. “For the very first time, the oldest profession in the world has
`transparency, record keeping and safeguards.”
`
`That line and others were edited out of the submitted editorial, the indictment
`said.
`
`Another series of emails were sent to a company in India tasked with moderating
`the ads on Backpage, looking for terms indicative of prostitution and removing
`them.
`
`According to the indictment, that outsourcing came as Backpage expected an
`increase in adult-oriented ads after the website Craigslist, under pressure from
`law enforcement, lawmakers and anti-sex trafficking advocates, agreed to shut
`down its adult section.
`
`That outsourcing of work meant that the company had to be explicit about what it
`allowed on its site.
`
`An email to moderators in India, sent in May 2012, according to the indictment,
`contained a spreadsheet of 600 words and phrases indicative of prostitution. The
`spreadsheet indicated whether use of the phrase should mean an ad ought to be
`deleted entirely, or whether only the offending word should be struck, the
`indictment said.
`
`The line blurs as prosecutors face challenge of ambiguity 
`
`However, defense attorneys say that the government needs to do more than show
`Backpage had a general culture of allowing ads for prostitution. To overcome the
`First Amendment protections, they argue, the government must show that
`
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`https://www.azcentral.com/story/news/local/phoenix/2021/08/30/lacey-la...
`Lacey, Larkin accused of aiding prostitution; Backpage trial to begin
`Case 2:18-cr-00422-SMB Document 1254-1 Filed 08/31/21 Page 7 of 8
`
`specific ads listed in the indictment resulted in criminal conduct and that the
`defendants would have reasonably known about it.
`
`“[S]pecific intent is required to prove these charges,” said Whitney Bernstein, an
`attorney for Larkin, during the pre-trial hearing.
`
`The indictment charged Lacey and Larkin with a single count of conspiracy to
`facilitate prostitution across state lines. But, it goes on to list 50 specific ads
`published between 2013 and 2018, charging each one as a separate example of
`facilitating prostitution.
`
`One of those ads listed contained a price list for “half hour sessions” and used a
`colloquial term for oral sex. Another offered to “blur restrictions between
`financial transaction and Romantic Connection.”
`
`Cambria, in court, said that one of the ads in the indictment appeared to be a
`possibly illegal transaction, though he did not specify which one. The rest of
`them, he said, were “ambiguous” and merely “sounds like it’s illegal.”
`
`That ambiguity around the ads apparently extends beyond Backpage.
`
`The operator who dispatched MacMartin to the Scottsdale apartment where she
`would be stabbed to death told a Scottsdale Police detective that, as far as she
`knew, the girls were not hired for sex, according to a police report.
`
`That dispatcher said that, in her understanding, the girls were being sent to be
`companions. Some become therapists, listening to men crying over broken
`marriages, she told the detective.
`
`The detective, according to the report, seemed skeptical. He asked the dispatcher
`whether she thought more than companionship could be taking place. She said
`she didn’t want to speculate.
`
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`https://www.azcentral.com/story/news/local/phoenix/2021/08/30/lacey-la...
`Lacey, Larkin accused of aiding prostitution; Backpage trial to begin
`Case 2:18-cr-00422-SMB Document 1254-1 Filed 08/31/21 Page 8 of 8
`
`Her answer indicated she wasn’t looking for a legal shield as much as an
`emotional one.
`
`“Well,” she told the detective, “honestly, it keeps me feeling okay about what I’m
`doing.”
`
`Thank you for subscribing. This premium content is made possible because
`of your continued support of local journalism.
`
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