Note: Some of the following content was repurposed from live reports from the courthouse. For regular updates during breaks in the proceedings, follow @stephenlemons on Twitter/X.

The defense in the Backpage trial called its first witness on Tuesday in Phoenix’s federal court: Grant Snyder, a former commander with the Minneapolis Police Department (MPD) and founder of the department’s human trafficking program.

Under direct examination by defense counsel David Eisenberg, Snyder, a burly, bearded man who recently retired from the MPD after 27 years in law enforcement, explained how his department used ads in Backpage’s adult section to locate missing teens and reach out to those who might want help.

He said MPD did do prostitution busts of sex workers at one time but later moved to a “victim-centered approach” and refrained from arresting people “who were themselves engaged in prostitution.”

MPD still did reverse stings targeting “buyers of sex” by posting fake ads on Backpage. When a potential customer arrived at the designated location, instead of finding “a 15/16-year-old woman . . . it was me,” he said.

Snyder often subpoenaed information from Backpage, and Backpage would respond tout de suite. He didn’t find the site’s creator, government songbird Carl Ferrer, to be responsive. However, defendants Andrew Padilla and Joye Vaught — who oversaw moderation and dealt with law enforcement — were more helpful, according to Snyder.

Snyder said he could call them in the middle of the night with requests concerning “exigent circumstances,” wherein time was of the essence, and Vaught and Padilla would hustle to get him what he needed.

Vaught attended law enforcement conferences, and Snyder met her at one in New Orleans, saying he and other human trafficking experts were “excited that a representative of Backpage was there to answer questions.”

Snyder’s praise for Backpage and specifically Vaught and Padilla is sadly ironic given that Vaught and Padilla, along with two company execs and veteran newspaperman Michael Lacey, are charged with “facilitating” misdemeanor state prostitution offenses in violation of the U.S. Travel Act.

Vaught and Padilla were merely employees of Backpage. They didn’t own a percentage of the company, and they did not set company policy. Still, prosecutors roped these hard-working, law-abiding Americans into an alleged “conspiracy,” in a bid to get them to roll on Lacey and the others. You know, like their onetime boss, Ferrer, the government’s star witness, has done in exchange for a sweet plea deal.

Padilla and Vaught are two of several victims of this vindictive prosecution — one that’s lasted nearly six years and resulted in a mistrial in 2021 due to prosecutorial misconduct. Another victim of the case is Lacey’s longtime business partner in the journalism trade, the late Jim Larkin.

Many, including this writer, believe that the government’s persecution of Backpage and Lacey and Larkin led directly to Larkin’s untimely death.

The government seized and destroyed Backpage in April 2018 in an unprecedented act of direct government censorship. Since then, adult-themed advertising for massage, dating, and escorts — once common to alternative weeklies, daily newspapers, and even the Yellow Pages — has migrated overseas, beyond the reach of U.S. law enforcement.

Snyder attested to this new reality, testifying that his team had to “relearn where the ads were being posted.” Were the new sources of information as effective and cooperative as Backpage? No, Snyder said.

(Note: this new normal was documented in a 2021 report from the U.S. Government Accountability Office (GAO), though the GAO study has yet to be entered into evidence.)

As with other police witnesses, Snyder said he could not make a prostitution arrest based solely on an escort ad on Backpage, because the language was often “vague” and the images unreliable.

Photos were often “pirated,” and the young-looking women in the photos did not match the actual advertisers, who tended to be older than indicated in their ads.

Berry Berry Angry

A kerfuffle erupted on cross-examination when government attorney Austin Berry asked Snyder about his communications with the defense, normally a standard question each side asks on cross.

Snyder described text messages and emails between himself and the defense. Berry erupted, demanding that these communications be disclosed to the government.

Defense attorney Eisenberg said the communications were not subject to disclosure. The jury was given a break so the lawyers could go into cage match mode. At one point, Snyder said he wanted his own attorney.

Eventually, the texts were made available to Judge Diane Humetewa. She said most of them concerned travel plans and trial dates, but she disclosed substantive ones to the prosecution.

Despite all the hoo-ha, Berry ended up asking just a couple of questions of Snyder concerning some adult ads that the defense emailed to Snyder. In one text, Snyder wrote that some of Backpage’s adult ads, in general, might be “suspicious” though some were “benign” and others had references to sex for money.

Snyder wanted to explain the context of his comment, but he was not allowed. Nor was Eisenberg allowed to question Snyder about the text.

Later in the day, after the jury was dismissed, defense attorney Gary Lincenberg moved for a mistrial — the 7th such motion so far — saying Berry’s conniption fit about the Snyder texts was out of bounds and “grandstanding” in front of the jury, thus prejudicing the jurors.

Berry could have talked about the issue at a sidebar, Lincenberg said. Judge Humetewa agreed that would have been preferable, but she denied the motion, saying the issue “doesn’t rise to the level of dismissal.”

FBARed by the IRS

Scottsdale attorney John Becker also testified on Tuesday about funds that he transferred in 2017 to a bank in Hungary on Lacey’s behalf. Becker explained that Lacey needed a place to park his money because U.S. banks kept closing his accounts due to the controversy over Backpage.

Becker’s specialty is estate planning, but he suggested that Lacey may want to look outside the U.S. Becker and Lacey consulted with a Los Angeles attorney whose expertise was offshore accounts. It was decided to transfer the money — nearly $17 million intended to be placed in a trust for Lacey’s sons — to a bank in Hungary.

The government has repeatedly attempted to portray this transaction as illicit, but under questioning from Lacey’s attorney Paul Cambria, Becker demonstrated that it was a totally legal transfer of funds.

By law, Becker had to inform the IRS of Lacey’s foreign account on a yearly basis by filing an official form, known as an FBAR, or, Report of Foreign Bank and Financial Accounts. In emails to Becker, Lacey made clear that he wanted the transfer done by the book and all taxes paid. Cambria displayed the FBARs and documents from Lacey’s tax returns on courtroom monitors, showing the transfer to be legit.

Banks are notoriously skittish, and will cancel an account at the drop of a dime if there’s a perception of “reputational risk.” Becker said he didn’t know anything about Backpage and never looked at it.

On cross, prosecutor Andy Stone asked Becker if he’d been told more about the Backpage case, would he have done the transfer for Lacey?

“Probably not,” Becker replied. “I don’t need the hassle.”

On redirect, Cambria asked, “Hassle or not, it was absolutely legal, a solid transaction?” Becker forcefully agreed, yes, it was solid.

There’s no doubt that the transaction was lawful and documented as such. But can the government win a conviction by simply suggesting that something might be illegal?

Come to think of it, that’s what the prosecution is doing with Backpage’s adult advertising, which was legal on its face.

People may be stunned by the amount of money involved in the Hungarian transfer, but hopefully, they can see past that and the government’s insinuations. After all, the government is the greedy party here. It wants ALL of Lacey’s money or as much of it as it can get. Already, it has seized or frozen most of his assets.

What the Jury Won’t See

Earlier in the day, Judge Humetewa announced that she would reserve, for now, her ruling on the defense’s Rule 29 motion to acquit, which is based on what the defense believes to be the weakness of the prosecution’s case.

Both sides then discussed defense motions to reconsider Humetewa’s pre-trial rulings, in which she precluded or limited the following: discussion of Section 230 of the CDA; advice of counsel that Backpage’s business practices were legal; and the many wins Backpage had in federal and state courts upholding Backpage’s right to publish under CDA 230 and the First Amendment.

The defense argued that all of these things go to the “state of mind” of the defendants and their belief that they were acting in good faith and not breaking the law.

If the defendants decide to testify, they would want to make these points.

Ruling from the bench, Humetewa said that advice of counsel testimony would not be permitted unless the defense first satisfied four or five requirements concerning legal advice, including whether the defendants made complete disclosures to the attorneys in question concerning Backpage’s activities.

Humetewa gave the defense some wiggle room concerning the defendants’ own understanding of the legality of Backpage’s ads and any advice or instructions they may have received. But it could not be mentioned that such advice came from an attorney.

Regarding Section 230, which offers immunity from civil liability and state criminal law for content posted by others, she ruled the law was irrelevant because CDA 230 does not immunize against federal criminal laws, like the U.S. Travel Act, which is what the defendants are charged with violating.

A prior judge in the case ruled that it *was* relevant that 230 included a safe harbor provision encouraging websites to moderate. But Humetewa disallowed discussion of this, saying that to do so would cause the trial to “go down a rabbit hole” of irrelevant material that would “confuse the jury.”

One defense attorney asked if his client could testify that auditors of the site never informed him of any illegality. Humetewa said she would allow this as long as communications between the auditors and the attorneys are not mentioned.

Padilla and Vaught could testify to their roles overseeing moderation and what was communicated to them by their superiors. Vaught could talk about her testimony to a federal grand jury in 2012 and the fact nothing came of it.

They could both testify about instructions given to them by Liz McDougal, who was in charge of moderation at one point, but they can’t say she is an attorney. BP’s past legal wins? Can’t come in as they are not relevant to this trial, declared Humetewa. The defense respectfully disagreed, saying that this past litigation went to the defendants’ state of mind.

Lacey and the others could testify about their belief that Backpage was protected by the First Amendment but not that they received advice of counsel to that effect.

The defense needed these issues addressed because whether the defendants will testify hinges on Humetewa’s dictates.

Her decisions will also affect which witnesses are called and how long the defense’s case will last. One attorney asked about the possibility of closing arguments starting by week’s end, but the defense has notified the government about 17 witnesses so far. How long the trial will last remains an open question.

Interestingly, it was mentioned that one of Lacey’s witnesses will be award-winning journalist John Dougherty, formerly with the Phoenix New Times. He’s expected to testify Wednesday.

For regular updates during breaks in the proceedings, follow @stephenlemons on Twitter/X.

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