Michael Lacey Free on Bond in Backpage First Amendment Case

color photo of a grizzled, grinning Michael Lacey walking, hand in hand with his wife, as an unidentified reporter runs alongside, taking a picture with his phone.
Veteran newspaperman Michael Lacey exits the federal courthouse in Phoenix on April 13, 2018. (photo by Stephen Lemons)
Former Backpage co-owner Michael Lacey walked free from federal custody on April 13, a week after the FBI arrested him and six other current and former company execs

The smile on Michael Lacey’s face as he exited the Sandra Day O’Connor U.S. Courthouse in Phoenix, Arizona, at a little after noon on Friday was worth a million dollars. Literally.

That morning, Lacey posted a $1 million bond, secured by two properties he owns, and agreed to a number of conditions for his release from federal detention, including electronic monitoring and restrictions on his travel without the prior permission of the court’s pretrial-services division.

Looking a little grizzled after his week in custody, Lacey beamed after he was finally discharged about three hours after his 9 a.m. hearing before Magistrate Judge Bridget S. Bade. Wearing a black shirt and jeans — in contrast to the black-and-white bumblebee stripes he wore when he faced Judge Bade — the award-winning newspaperman was uncharacteristically mum as reporters lobbed questions his way.

Lacey’s reticence is likely indicative of the seriousness of the charges against him. On April 6, federal agents apprehended Lacey, his longtime business partner Jim Larkin, and five other current and former owners and employees of the online listings behemoth Backpage.com on a 93-count grand jury indictment that accused the defendants of crimes involving the facilitation of prostitution, conspiracy, and money laundering.

The least serious of the counts are punishable by a maximum of five years in prison, the most serious by as much as twenty.  The FBI also seized Backpage’s website and raided homes owned by Lacey and Larkin.

Unlike the other five defendants in the case, who were released within days of being taken into custody, Lacey remained behind bars for an entire week. Larkin will not be set free until the final details of his release are ironed out — Monday afternoon at the earliest.

In court documents, federal prosecutors characterize the pair as the “masterminds” behind Backpage, a.k.a. “the internet’s most notorious destination for prostitution advertisements.” The feds contended that the two men pose “a danger to the community” by virtue of the fact that they might somehow wrest control of Backpage from the FBI and set out to wreak havoc.

Ironically, Lacey and Larkin — who founded Front Page Confidential in 2017 to provide news and commentary on issues related to the First Amendment and free speech — sold their share of Backpage in 2015 to co-founder and company CEO Carl Ferrer. Ferrer’s name is noticeably absent from the indictment, though he is referred to by his initials throughout the document.

It turned out Ferrer had secretly pleaded guilty on April 5 to a single low-level conspiracy charge, as part of a deal with the feds. He also pleaded guilty to state charges pending in California and Texas and pledged to forfeit all company assets to the government and testify against other defendants in the Backpage case.

As outlined in his plea agreement, Ferrer’s admission of guilt tracks the federal government’s theory of the case. It’s a theory that intentionally overlooks previous federal and state court rulings that have found that Backpage has operated within the law — specifically, Section 230 of the Communications Decency Act of 1996, which states that interactive websites generally are not liable for content posted by users.

Late last month Congress undermined that law to include exceptions for facilitating consensual commercial sex among adults (i.e., prostitution) and sex trafficking. Of course, Section 230 never did offer interactive platforms immunity from federal crimes like the ones with which the Backpage execs are charged.

Yet courts have also found that Backpage is protected by the First Amendment. And Lacey and Larkin’s attorneys have already cited that unique provision of the U.S. Constitution,  decrying the government’s act of direct censorship in shutting down Backpage and treating Lacey and Larkin more like Mafia dons than the publishers and journalists they are.

See Also:
“Feds Seize Backpage, Arrest Former Owners in Act of Direct Government Censorship”

“Federal Backpage Indictment: Bloated with Familiar Bluster; No Sex-Trafficking Charges”

“Attorney for Ex-Backpage Owner Michael Lacey: ‘He’s a fighter. He’s a First Amendment guy.'”

The two are best known as the erstwhile executive editor and CEO, respectively, of the Village Voice Media (VVM) empire, a nationwide chain that at one time comprised seventeen alternative weeklies. Their careers date back to the 1970 founding of what would become VVM’s flagship publication, Phoenix New Times, as a reaction to the Kent State tragedy and the Vietnam War.

Christine Biederman, a former Assistant U.S. Attorney and now a private attorney in Dallas, Texas, was in town this past week to cover the proceedings in the Backpage prosecution for a book she’s writing. An award-winning journalist in her own right, Biederman was a staff writer and longtime contributor at VVM’s Dallas Observer. (The paper remains part of the chain, which was renamed Voice Media Group after Lacey and Larkin sold VVM to company insiders in 2012.)

Biederman told Front Page Confidential  that while Ferrer’s cooperation with the government makes the case more difficult for Lacey and Larkin, it’s no slam dunk for federal prosecutors.

Because proceedings are in criminal court, the prosecution must show “particularized proof” of wrongdoing.

For instance, the indictment lists 50 adult-themed ads that allegedly appeared on Backpage from September 10, 2013 to February 6, 2018, containing text such as “50 Red R*O*S*E*S  S*P*E*C*I*A*L – DON’T MISS OUT!,” “Ready for some fun daddy? This is your chance to have an amazing time – 21,” and “GFE Kisskisspop 100% Real Photo Choice 9Asian girl Nurunude.”

The government seems to believe that such ads can be interpreted in only one way, but Biederman says that might be a miscalculation.

“I think you bring twelve different people in, you might get one of these ads to read twelve different ways,” she said. “I mean, they’re intended to be vague. And who knows if they are an actual ad for an actual crime?”

Not to mention that the indictment cites a grand total of 50 ads, plucked from among tens of millions that were published on the site for everything from puppies for sale to job listings to offers for legal sex work like bondage and domination, foot fetishes, striptease, et cetera.

Biederman called the government’s move against Backpage “an attempt to federalize the prosecution of prostitution in this country.” She believes the current climate concerning adult ads online is indicative of a pendulum swing away from the liberalization of sexual mores.

Which is why the Backpage case is shaping up as a First Amendment donnybrook of epic proportions.

“I have a feeling that if these guys [Lacey and Larkin] have funded their lawyers properly and the feds haven’t lien-ed up everything and seized all the money, this will go to all the way to the Supreme Court,” Biederman predicted. “This will be a great First Amendment battle like we haven’t seen in a long time.”

Update April 16, 2018 5 PM: Lacey’s longtime business partner Jim Larkin was released from federal custody late Monday afternoon after spending more than a week behind bars. The conditions of release were similar to Lacey’s and involved the posting of a $1 million bond, guaranteed by two properties.

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About Stephen Lemons

Stephen Lemons is an award-winning investigative journalist with more than 20 years of experience covering everything from government corruption to white-supremacist gangs. In addition to Front Page Confidential, his work has appeared in Phoenix New Times, the Los Angeles Times, Salon.com, and the Southern Poverty Law Center’s Intelligence Report magazine.

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