Top executives of prostitution website Backpage.com get prison time

The top executives of the prostitution website Backpage.com were sentenced to prison time on money-laundering charges on Wednesday.

Backpage.com owner Michael Lacey, 76, of Paradise Valley, Ariz., was sentenced to five years in prison and three years of supervised release, and was fined $3 million.

The company’s executive vice president, Scott Spear, 73, of Phoenix, was sentenced to 10 years in prison and three years of supervised release, and Backpage.com CFO John “Jed” Brunst, 72, of Phoenix, was sentenced to 10 years in prison and three years of supervised release.

“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,” Argentieri said. “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.”

According to court documents and evidence presented at trial, Backpage.com used an automated filter and human moderators to remove terms known to indicate sex-for-money, while still allowing the ads to be posted.

Through this attempt to sanitize the ads, the conspirators sought “plausible deniability” for what the conspirators knew to be ads promoting prostitution.

The crime was laundering the hundreds of millions of dollars that the site raked in through numerous shell companies they created in multiple foreign countries.

In November, 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.

This week’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 and 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 LLC, pleaded guilty to conspiracy to engage in money laundering.

Co-conspirator James Larkin, 73, died on July 31, 2023, before trial began.