An Aug 17 trial is scheduled in Phoenix for Michael Lacey and James Larkin, the founders of Backpage.com, on charges they knowingly published prostitution ads and then laundered money from them.
Backpage is a Dutch-owned company incorporated in Delaware and based in Texas, but it maintained its servers and bank accounts in Arizona.
The site was shut down in the 2018 enforcement action by the Federal Bureau of Investigation, the U.S. Postal Inspection Service and the Internal Revenue Service Criminal Investigation Division.
XBIZ reports that the “postponement, attorney Paul Cambria told XBIZ, follows a request by Lacey and Larkin’s defense to postpone the trial date, which had been initially set to May 5.
“We asked the court to move the trial because the government continued to serve hundreds of thousands of documents and we asked the court to give us more time to review it,” Cambria told XBIZ.
Lacey, along with Larkin and others who were then students at Arizona State University founded the Phoenix New Times weekly newspaper in 1970. Over the next two decades, they grew the New Times into a nationwide chain, eventually purchasing Village Voice Media—a competing chain of “alternative” weeklies—to add more papers to their portfolio.
But in 2004, they founded Backpage, an online classified ad site specializing in ads for sexual services. Eight years later, Lacey and Larkin split from Village Voice Media, keeping the lucrative Backpage business for themselves.
Federal authorities say that the site has generated about $500 million in revenue from the sex ad business. They also say that the site’s management maintained a policy of editing advertisements to conceal any illegal activities, including sex trafficking of minors, that were advertised on the site.
Backpage CEO Carl Ferrer took a p[lea deal in 2018, and turned state’s evidence. He pleaded guilty to one charge of conspiracy and three counts of money laundering in California, and to money laundering in Texas.
Dan Hyer, the sales and marketing director for Backpage, also pleaded guilty to conspiring to facilitate prostitution, and admitted in court that he participated in the scheme to corner the market on prostitution ads by offering free ads to sex workers.
