A federal judge in Phoenix Wednesday sentenced the three owners of Backpage.com, a prostitution website, for offenses arising from their promotion of and associated money laundering, officials stated.
The sentence for Michael Lacey, 76, of Paradise Valley, Arizona, was five years in prison and three years of supervised release.
John “Jed” Brunst, 72, and Scott Spear, 73, both of Phoenix, were each given a 10-year prison sentence with a subsequent three-year period of supervised release.
The court has ordered all defendants to surrender to the U.S. Marshals Service by noon on Sept. 11.
“The defendants and their conspirators obtained more than $500 million from operating an online forum that facilitated the sexual exploitation of countless victims,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “The defendants thought they could hide their illicit proceeds by laundering the funds through shell companies in foreign countries. But they were wrong. Their sentences should serve as a stark reminder that the Criminal Division and its law enforcement partners are committed to protecting victims and following the money to unmask those who exploit human beings for financial gain.”
“These convictions hold accountable three C-Suite executives who controlled an enterprise and its illicit profits,” said U.S. Attorney Gary Restaino for the District of Arizona. “The courage of the victims of Backpage’s criminal activities is vindicated by the sentences imposed by the Court, to include the loss of liberty for each defendant as well as the additional large fine imposed on defendant Lacey, which will inure to the benefit of the Crime Victims Fund and crime victims everywhere.”
According to court documents and evidence presented at trial, Michael Lacey, Scott Spear, and John “Jed” Brunst owned Backpage.com.
From September 2010 until its seizure by the United States in April 2018, Backpage.com was the leading online platform for prostitution ads. The evidence showed that the conspirators knowingly facilitated and promoted prostitution through various marketing strategies.
For instance, they participated in a reciprocal link program with an independent web forum where “johns” could post reviews of prostitution encounters with specific women.
Additionally, they used automated filters and human moderators to remove explicit terms related to sex-for-money transactions while still allowing the ads to be posted. This tactic was intended to create “plausible deniability” for what they knew were ads promoting prostitution.
The conspirators earned more than $500 million during the conspiracy.
Lacey, Spear, and Brunst laundered the money through a network of shell companies established in multiple foreign countries to safeguard their illicit profits.
In November 2023, a federal jury in Phoenix convicted Lacey of one count of international concealment money laundering; Spear of conspiracy to violate the Travel Act, 17 counts of violating the Travel Act, money laundering conspiracy, and 10 counts of concealment money laundering; and Brunst of conspiracy to violate the Travel Act, money laundering conspiracy, 10 counts of concealment money laundering, and five counts of international promotional money laundering.
Wednesday’s sentences follow prior convictions of Backpage leadership and corporate entities:
- In April 2018, Carl Ferrer, 57, of Frisco, Texas, who was Backpage’s co-founder and CEO, pleaded guilty to conspiracy to facilitate prostitution using a facility in interstate or foreign commerce and to engage in money laundering.
- In August 2018, Dan Hyer, 54, of Dallas, who was Backpage’s Sales & Marketing Director, pleaded guilty to conspiracy to facilitate prostitution using a facility in interstate or foreign commerce.
- In April 2018, several Backpage-related corporate entities, including Backpage.com LLC, pleaded guilty to conspiracy to engage in money laundering
Co-conspirator James Larkin, 73, died on July 31, 2023, before the trial began.
Assistant U.S. Attorneys Kevin Rapp, Margaret Perlmeter, and Peter Kozinets for the District of Arizona and Trial Attorney Austin M. Berry of the Criminal Division’s Child Exploitation and Obscenity Section are prosecuting the case.