The case against Backpage finally reaches trial — again

Delayed by three weeks after the death of a main co-defendant, the federal prostitution-facilitation and money laundering case against former owners and employees is nearing opening arguments.

Jury selection for the trial, set to span three months, begins Tuesday morning.

Michael Lacey and James Larkin, founders of the notorious classified advertising website Backpage, denied prostitution allegations for years. Co-founders of the alt-weekly Phoenix New Times, the pair has been heralded by some as champions of free speech.

Larkin died by suicide just days before the trial’s start date in early August, resulting in a three-week delay. Prosecutors dropped charges against Larkin after his death.

Attorneys for the remaining five defendants, collectively facing 100 felony counts of facilitating prostitution, money laundering and conspiracy, have made free speech a main defense since Lacey and Larkin had their assets seized and were arrested in 2018.

The pair created Backpage in 2004 as a response to Craigslist. The site allowed users to post personal classified ads like they would on the back page of a newspaper.

Like Craigslist, it attracted ads for adult-oriented services. Prosecutors say the defendants allowed and helped craft advertisements for prostitution using “thinly-veiled” code words like “escort” rather than “prostitute” and “GFE,” meaning “girlfriend experience.”

The defendants claim they provided a platform for free speech and can’t be held accountable for whatever speech occurred on the site. They unsuccessfully moved to dismiss the case in 2019 on First Amendment grounds and have pursued the same angle since.

“As a First Amendment matter, it’s tough to make that argument,” said Gregg Leslie, a professor at Arizona State University and director of its First Amendment Clinic.

“If you’re the publisher, you’re going to be liable for what you publish, as a First Amendment matter,” he said. “The reason it’s usually that the publisher of the website is not liable is because of a statute, Section 230, of the Communications Decency Act.”

Established in 1995, Section 230 removes liability from service providers for harmful or illegal content published on their sites, so long as the provider doesn’t contribute to the content in any way other than removing obscene or illegal content.

“You’re not liable if you don’t touch it, but if you want to touch it just to protect your reputation or your customers, you can,” Leslie said.

Section 230 would give Backpage immunity if it acted solely as a third-party host of information. But witnesses in the last trial echoed the federal government’s claims that Backpage executives edited ads and recommended changes to users to better avoid detection by investigators.

“So that’s really the heart of that controversy,” Leslie said. “Did they lose their Section 230 protection because they became an advisor?”

Prosecutors asked U.S. District Judge Diane Humetewa to prohibit defendants from using free speech as a defense, saying the statute doesn’t protect illegal speech. Humetewa ruled that they can characterize their general business practices as free speech, as the burden to prove those practices were illegal falls on the prosecution.

If the prosecution meets that burden, Lacey and the four other defendants — Scott Spear, former executive vice president of one of Backpage’s parent companies; John Brunst, former chief financial officer; Andrew Padilla, former operations manager; and Joye Vaught, former assistant operations manager — could spend the rest of their lives in prison.

Each of the 50 counts of facilitating prostitution carries a maximum sentence of five years. Each money laundering count, of which there are 48, carries a maximum of 20 years.

Dan Hyer, former sales and marketing director for Backpage, pleaded guilty in 2018 to one count of conspiracy, a class 5 felony with a maximum sentence of five years. He’s scheduled to be sentenced in late September.

The other defendants appeared before a magistrate judge on Aug. 18 to confirm their denials of similar plea deals offered to them much earlier in the case.

While the defense clings to free speech, prosecutors have focused on sex trafficking, and particularly child sex trafficking — offenses defendants have been accused of outside of court but don’t face charges for. A witness in the first trial said most sex trafficking victims were sold through Backpage while it was active.

“I have no idea about percentages, and anybody who tells you they do is bullshitting,” said Alex Yelderman, special counsel to the Human Trafficking Legal Center. “There’s a huge amount of sentiment in the anti-human trafficking world that Backpage is a culprit here. They’re not.”

Prosecutors’ emphasis on the subject resulted in a mistrial in 2021.

“If you want to talk about trafficking in this case, there’s a perfectly good way to do that: charging them with trafficking,” Yelderman said. “And they can’t. They just don’t have a case.”

Yelderman said there’s no way to tell through the ads whether the services offered were consensual or not, as trafficking victims are often disguised as sex workers. In the past, ads suspected of trafficking were investigated by the FBI, with full participation from Backpage’s staff.

“They were incredibly responsive to subpoenas,” Yelderman said. “They got awards for being cooperative. And then politics got into it.”

Carl Ferrer, Backpage’s former CEO, who pleaded guilty to conspiring to facilitate prostitution in 2018, received a certificate from the FBI in 2011 thanking him for cooperating with their investigations.

Prosecutors asked Humetewa in a pretrial motion to allow them to use the terms “sex trafficking” and “child sex trafficking” synonymously with prostitution because the exhibits they plan to present make the terms unavoidable when discussing prostitution.

Humetewa ruled in an Aug. 18 hearing that exhibits and witnesses will be permitted to use such language so long as the content discussed is related to purported violations under the Travel Act — the federal law that bans crossing state lines, whether in person or virtually, as part of committing certain crimes, including prostitution — and distinctions are made between it and the actual pending charges.

“We need to know what the witness understands trafficking to be,” she said.

The defense argued against use of the terms at all to avoid another mistrial. Humetewa called the idea “a non-starter.”

Backpage has received intense scrutiny from anti-trafficking advocates since its 2004 inception. Pressure to shut the site down mounted in 2010 after Craigslist shuttered its adult section.

But its supporters say its dissolution did more harm than good. Without a centralized online platform to offer services, sex workers can’t take the time to screen clients, confirm payments or ensure their own safety.

“Backpage goes away. Sex work and trafficking returns to the streets. That’s always bad,” Yelderman said.

A 2021 Government Accountability Office report found that Backpage’s takedown, paired with the 2018 passing of the Fight Online Sex Trafficking and Stop Enabling Sex Traffickers Acts, made it harder to fight trafficking, as adult advertisers took their businesses to less cooperative websites hosted overseas where U.S. subpoenas mean very little.

Yelderman said several groups that previously offered resources for sex workers shut down in 2018 to avoid legal trouble.

Depending on how long jury selection lasts, opening arguments are likely to commence Thursday and the trial is set to wrap up Nov. 9.

Both sides have denied requests for comment.

This article was first published by Courthouse News Service and is republished under their terms of use.

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