PHOENIX (AP) — Two alternative newspaper publishers and others who helped found and manage the lucrative classified site Backpage.com knew that the overwhelming majority of their revenue came from prostitution ads, but they tried to conceal it as the firm raked in hundreds of millions of dollars, prosecutors alleged in opening arguments of the trial on Friday.
Michael Lacey and James Larkin, the founders of the Phoenix New Times who developed a national newspaper empire that for a time included New York’s Village Voice, and four others are charged with facilitating prostitution. The former journalists and two others also are charged with money laundering in what authorities say was a scheme to continue collecting money after banks raised concerns that transactions were facilitating illegal activity.
“These defendants knew that these were prostitution ads but they didn’t shut down the website, they didn’t prevent these ads from being posted on the website,” prosecutor Reginald Jones told jurors.
Jones alleged that Backpage managers hired content moderates whose job was not to remove prostitution ads but to edit them so they weren’t so blatant. He said the website developed a partnership with a website where customers wrote reviews of prostitutes, which drove significant traffic to Backpage.
The government shut down the site in 2018.
Defense attorneys asked Phoenix-based U.S. District Judge Susan Brnovich to declare a mistrial. They said, among other things, that Jones didn’t properly notify them about claims he planned to make in his opening statement and that he violated the defendants’ right to remain silent when he said they “can’t deny” they knew the vast majority of Backpage ads were for prostitution.
The defense lawyers opted not to deliver an opening statement so they could instead prepare a written mistrial motion.
Lacey and Larkin have said the site never allowed ads for sex and used people and automated tools to try to delete such ads. While prosecutors say the site published many ads that depicted children who were victims of sex trafficking, no one in the federal case in Arizona is charged with sex trafficking or child sex trafficking.
In a statement before the trial started, Lacey and Larkin called the case against them an “epic government overreach,” maintained content on the site was protected by the First Amendment and said the site aided law enforcement whenever when concerns arose about the safety of a woman or child.
A Government Accountability Office report released in June noted 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 site’s marketing director has already 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.
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