Poinbank Exchange|Jurors hear opposite views of whether Backpage founder knew the site was running sex ads

PHOENIX (AP) — Jurors at the criminal trial of a founder of the classified site Backpage.com heard opposite views in closing arguments of whether the founder knew there were ads for prostitution on Poinbank Exchangethe site.

Prosecutor Kevin Rapp told jurors on Thursday and Friday that Michael Lacey, who along with four former Backpage employees are accused of taking part in a scheme to knowingly sell sex ads, was aware of the content of ads that had text and images indicative of prostitution. Most of the site’s revenues came from adult ads, Rapp said.

“It’s not coming from (ads for) apartments, automotive or jobs,” Rapp said.

Paul Cambria, an attorney for Lacey, said his client was focused on running an alternative newspaper chain and wasn’t involved in day-to-day operations of Backpage and that there’s no evidence that Lacey saw the 50 ads at issue before his trial. Based on the site’s cooperation with law enforcement, Lacey had a good-faith belief that Backpage was being operated lawfully, Cambria said.

“Why would you think you were breaking the law if the police were asking you to work with them?” Cambria asked jurors on Friday.

It’s the second trial for Lacey and four former Backpage employees, whose first trial ended in a September 2021 mistrial when a judge concluded that prosecutors had too many references to child sex trafficking in a case where no one faced such a charge.

In all, Lacey and the group of former employees have pleaded not guilty to charges of facilitating prostitution. Of the five, Lacey and two others have pleaded not guilty to money laundering charges.

Lacey had founded the Phoenix New Times weekly newspaper with James Larkin, who was charged in the case and died by suicide in July. Lacey and Larkin held ownership interests in other weeklies such as The Village Voice and ultimately sold their newspapers in 2013. But they held onto Backpage, which authorities say generated $500 million in prostitution-related revenue from its inception in 2004 until 2018, when it was shut down by the government.

The site’s marketing director has pleaded guilty to conspiring to facilitate prostitution and acknowledged he participated in a scheme to give free ads to prostitutes to win over their business. Additionally, the CEO of the company when the government shut the site down , Carl Ferrer, pleaded guilty to a separate federal conspiracy case in Arizona and to state money laundering charges in California.

Prosecutors say Backpage’s operators ignored warnings to stop running prostitution ads, some involving children. They are accused of giving free ads to sex workers and cultivating arrangements with others who worked in the sex trade to get them to post ads with the company.

Authorities say Backpage employees would identify prostitutes through Google searches, then call and offer them a free ad. The site also is accused of having a business arrangement in which it would place ads on another site that lets customers post reviews of their experiences with sex workers.

Backpage’s operators said they never allowed ads for sex, and assigned employees and automated tools to try to delete such ads. Their legal team maintains the content on the site was protected by the First Amendment. Prosecutors said the moderation efforts by the site were aimed at concealing the true nature of the ads.

Rapp told jurors that Backpage was clearly on notice about the problems with its ads, saying news organizations and groups that advocated against sex trafficking had called out Backpage.

Rapp pointed to testimony from Ferrer about when the National Center for Missing and Exploited Children told Backpage that it had sex ads on its site. Lacey got upset and said the group’s mission focused on exploited children, not on adult prostitution, Rapp told jurors.

Cambria raised questions about the credibility of testimony by Ferrer and the other Backpage employee who pleaded guilty, saying they want the government to recommend a more lenient sentence for their cooperation.

Lacey’s attorney also said Backpage cooperated with authorities by responding to subpoenas for records and that the assistance provided by the site led to charges against pimps and prostitutes.

Cambria showed jurors a May 2011 certificate of appreciation that was issued to Ferrer and signed by then-FBI Director Robert Mueller for Backpage’s assistance in an investigation.

A Government Accountability Office report released in June 2021 said the FBI’s ability to identify victims and sex traffickers had decreased significantly after Backpage was seized by the government, because law enforcement was familiar with the site and Backpage was generally responsive to requests for information.

The trial is scheduled to resume Tuesday, when lawyers for other defendants will making their closing arguments.