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Backpage Founder's 93 Charges Lack Actual Sex-Trafficking Claims

Indictment reveals money-laundering, conspiracy charges, and a tricky federal law known as the Travel Act.

BackpageBackpageThe Department of Justice this afternoon finally released the indictment against Michael Lacey, founder of Backpage.com, the website the feds seized control over on Friday and shut down.

The site has long been a center of accusations that Lacey was fostering sex trafficking, including child sex trafficking and sex slavery, and the indictment's text focuses on whether Lacey knew what was being posted on his site (prosecutors argue he did). Lacey stands accused of profiting off prostitution on Backpage.com, turning a blind eye to it (including underage prostitution), and attempting to hide the money from the feds.

But Lacey isn't actually charged with actual sex trafficking. He faces 93 total charges, 79 of which are felonies. For the felonies, he's charged with one count of conspiracy, 28 counts of various kinds of money laundering, and 50 counts of violating the Travel Act. The Travel Act is how they're hitting him for prostitution. Soliciting prostitution is not currently a federal crime (as yet). But the Travel Act allows the Department of Justice to intervene and apply federal charges in certain state-level criminal violations that cross state lines or foreign borders. Prostitution is one of the crimes the Travel Act covers, and the Department of Justice has used the Travel Act to shut down other sites (like gay escort site Rentboy.com in 2015). While it's not technically wrong to say that Lacey is being charged with facilitating prostitution (how many media sites are reporting it), the feds are doing so by using a round-about fashion.

The indictment claims that Lacey knew about prostitution ads in Backpage and even bragged about it. When sex trafficking ads appeared on the site that included those who were listed as being underage, prosecutors say Backpage edited the ads to remove any suggestion that a child was involved and reposted. The indictment says that the National Center for Missing and Exploited Children (NCMEC) gave Lacey and Backpage several recommendations to help prevent underage prostitution from appearing on Backpage, and he declined to adopt them.

The indictment makes it clear that the Department of Justice believe Backpage was doing more than just hosting prostitution ads, but deliberately pursuing them and encouraging them. Therefore, federal law shielding web sites for third-party postings of illegal behavior don't apply here. Elizabeth Nolan Brown previously took note of a civil suit against Backpage for similar allegations.

The indictment (readable here) posts example after example of Backpage helping facilitate the posting of online prostitution ads by editing the language to conceal the financial exchange, and this included ads for children being pimped for sex. The indictment includes lurid stories of women who were murdered by Johns after being pimped out for sex with Backpage.com ads. There's even a reference to a woman being taken to Phoenix to be sold for sex because the Super Bowl was there, which will no doubt feed into that well-worn sex-trafficking mythology.

As Backpage drew in more and more money—eventually surpassing $100 million per year—Lacey is accused of all sorts of different tactics to shift the money around to shield its origins. And a good chunk of it went back to Lacey. The feds say he pocketed more than $30 million in 2016 filtered through a property company.

The Department of Justice is asking that Lacey be detained for prosecution as both a flight risk and a danger to the community. But if the government does decide to release Lacey prior to trial, they're asking for him to give up his passport, subject himself to electronic monitoring, post a bond, not engage in any financial transactions, and of course, stay away from Backpage.com operations. The indictment also includes forfeiture requests to seize all that money Lacey made from Backpage.

Seven other Backpage employees have also been charged with crimes. Read more about those charges here.

Photo Credit: Backpage

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  • John C. Randolph||

    I had no idea Backpage was seeing $100M/year in revenues. With that kind of money involved, I'd expect there to be a dozen replacements hosted in other countries by now.

    -jcr

  • Diane Reynolds (Paul.)||

    Drive it underground. I like your thinking.

  • John C. Randolph||

    Not even underground, just offshore.

    -jcr

  • Crusty Juggler||

    More like off-whore, am I right?

  • Ken Hagler||

    And to think that people don't believe that the US already has shariah laws.

  • Get lit||

    Still, always, burning witches.

  • croaker||

    It's not called the American Taliban for nothing.

  • Hank Phillips||

    Asset forfeiture, eh? So it turns out there was probable cause for a pretext after all...

  • ||

    not engage in any financial transactions

    Like not pay his lawyers?

  • ||

    I'm commenting on Hit & Run in order to buy sex.

    Anybody got a problem with that? I'm asking you, FOSTA/SESTA!

  • Crusty Juggler||

    FWIW my services are priced by inch.

  • MatthewSlyfield||

    His or yours?

  • Don't look at me.||

    So, a bargain then?

  • Agammamon||

    Dude, this is stupid, pointless, and shows that you have no idea how FOSTA works.

    Just knock it off.

  • Don't look at me.||

    No, keep it up. Know what I'm sayin'? Nudge, nudge, wink, wink. Say no more?

  • Jerryskids||

    The indictment says that the National Center for Missing and Exploited Children (NCMEC) gave Lacey and Backpage several recommendations to help prevent underage prostitution from appearing on Backpage, and he declined to adopt them.

    Apparently I've been mis-using the term "recommendation" all these years.

  • Sevo||

    "Apparently I've been mis-using the term "recommendation" all these years."

    The IRS assures me that taxes are "voluntary", but I sort of doubt their honesty.

  • Wizard4169||

    Hey, breathing is voluntary. You always have the option to suffocate.

  • Cyto||

    Yeah, I picked up on that bit too. Apparently there are private organizations that can make recommendations for your business that are so powerful that they can be cited as evidence of criminal intent if not followed.

  • georgeliberte||

    They also used the standards police report phrase "and even bragged about it." to show how really awful and callous he was. Criminal's brag, cops praise.

  • Flinch||

    I mark the death of the internet as we know it with the Napster case. This latest federal folly is just another domino in the spectacle of grinding a piece of freedom into dust. Obama opened the door to medical tourism, and at some future date an enterprising nation will open the door to virtual citizenship - you don't give up your home of record or passport, just establish a 'financial interest' [in the form of a gift] and receive a vpn account outside US jurisdiction more valuable than your passport, and guarded as a sovereign right. There will be black market web services, and its going to be big.

  • jelabarre||

    I mark the death of the internet as we know it with the Napster case.

    Yes, it seems in between regulation, spam, trolling, and the under-estimation of Sturgeon's Law, the internet's signal:noise ratio will make it unusable quite soon. We'll all have to go back to letter-writing to communicate with anyone not in our immediate vicinity. Mind you, those letters will have to be hand-written, because patent trolls (and other bad judgements like APIs being copyrightable) will make computer technology untenable.

    Although we won't have to worry about the "singularity" then, because lawyers and federal agents will kill it before it reaches sentience.

  • Cyto||

    The cash grab is particularly egregious as there is no chance in hell that they can show that all of his income is due to illegal underage prostitution ads that he was aware of. This smacks of extortion, federal prosecutor style. Fork over a few tens of millions of dollars and go to jail for 5 years, or face 79 consecutive life sentences. Oh, and we'll preemptively seize all of your assets to prevent the possibility of mounting a vigorous defense. So.... do we have a deal?

  • Cyto||

    I wonder about the "filtered through a property company" bit. It sounds like they are trying to make ordinary holding company business structures into "money laundering".

    Most privately held businesses of any size and complexity are actually going to be held by multiple holding companies and businesses. Backpage could have a master partnership holding company that is owned by several different businesses - some are investment bank partners and some are companies representing the actual partners, but the company itself just exists to own Backpage. Then they could have a holding company for their intellectual property, a different one for their physical operations, etc. Each of these would be a bankruptcy remote entity.

    Any time there are complex financial relationships you see business structures like this, to prevent one division of a company from bringing the entire thing down, or to prevent a lawsuit from clawing back into your personal assets.

    If that it what the Feds are up to, this could be a hideous precedent. Since "money laundering" has become a crime unto itself, unmoored from any underlying crime, any sufficiently complicated financial transaction could be prosecuted as money laundering.

  • Robert||

    Looks like attempting to stay legal is illegal.

  • Robert||

    I'm still amused by the possibility that under FBI ownership Backpage would give better service.

  • Agammamon||

    Apparently the FBI was a good provider of child pornography for a long while - ostensibly to catch a predator.

    So it wouldn't surprise me to see them get BP.com up and running again. Definitely make them more money than another cross-state drug trafficking case where they have to fight for the spoils with the DEA.

  • loveconstitution1789||

    The National Center for Missing and Exploited Children (NCMEC) has the largest known private inventory of child porn in the World. Its worse than murder for anyone to have that stuff yet somehow a psuedo-government sponsored non-profit has hundreds of thousands of victimized kids on its servers while the government simultaneously prosecutes hundreds of Americans for the having the same pictures.

  • loveconstitution1789||

    The indictment claims that Lacey knew about prostitution ads in Backpage and even bragged about it.

    The government used fake underage women to catch the 1st Amendment protected publication's owners talking about victimless crimes as if the 1st Amendment protected them posting other people's business information. This is totes different than WaPo posting other people's business information in their classifieds.

    No bail huh? The 8th Amendment disagrees with the government's tyrannical violations of the Constitution. Every criminal defendant is entitled to bail that is not excessive. Even murderers and publishers of prostitution advertisements.

  • JeremyR||

    It's the Silk Road all over again.

  • loveconstitution1789||

    I have said that since the War on Drugs has died down a bit since weed is now legal in almost half the states, that law enforcement would go after other vice crimes. These LEOs never lost much personnel with less drug raids, so they needed to justify their jobs.

    Sex behavior became the next war target.

  • Anomalous||

    Fire up the woodchippers.

  • ravenshrike||

    Seems less roundabout than taking down Capone for tax evasion.

  • LarryA||

    Remember when "felon" meant someone like John Dillinger, instead of someone like Martha Stewart?

  • jelabarre||

    Remember when "felon" meant someone like John Dillinger, instead of someone like Martha Stewart?

    There's something I could never understand; just what is the difference between "stock tips" and "insider trading"? From where I sit it seems the only differentiating factor is that some prosecutor has declared it to be insider trading (because they need to pad their resume).

  • honeygirl||

    Btw,backpage had a feature that allowed users to report themselves as being trafficked with just a few clicks. How exactly is that fostering coerced sex trafficking?

    I can agree that this is ramping up because war on drugs has decreased somewhat. Let's be honest here...Oftentimes cops dont want to solve crimes. My family and I have had issues in several states, several different departments, and every time the pd has done the bare minimum (theft, breaking and entering, someone stole a relatives brand new car). Everytime it was "Oh well, wasn't on camera. We cant do anything." I think we'll need a blank decriminalization of drugs and prostitution to make cops actually WORK.

    If cops really cared about finding real victims, they could do simply ignore consenting adults during busts and save their resources to find true victims. Cops comes to the chic, asks if she needs help/if she's being trafficked. If she says yes, help her. If she's says no, move on to someone else. The drawback is expending a lot of manpower while finding virtually no victims and making very few arrests.

    So what if the guy bragged about having prostitution ads on his site. This is 2018. In some ways people are more bonkers now than in medieval times.

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