Judge Sets Sentencing Dates for Backpage Defendants (w/Update)

Federal Judge Diane Humetewa, from a U.S. House Judiciary Hearing in 2021
In an order issued on Monday, federal Judge Diane Humetewa set a sentencing date for journalist Michael Lacey and two former executives tied up in the Backpage travesty.

UPDATE April 18, 2024: Judge Humetewa has pushed back the sentencing date for the three Backpage defendants. Journalist Michael Lacey will be sentenced June 17, 2024 at 10:30 a.m. John Brunst will be sentenced the same day at 9:30 a.m. And Scott Spear is scheduled to be sentenced on July 9, 2024 at 10 a.m. The sentencings will take place at the Sandra Day O’Connor U.S. Courthouse in Phoenix.

The following is the opinion and analysis of the author and no one else.

Although U.S. District Court Judge Diane Humetewa has yet to rule on pending defense motions for acquittal or for a new trial, the court issued an order on Feb. 12 setting a sentencing date for three defendants in the Backpage case: veteran newspaperman Michael Lacey and former business executives Scott Spear and Jed Brunst.

Absent a favorable ruling on the pending motions, all three men will be sentenced on May 1, in Courtroom 605 of the Sandra Day O’Connor U.S. Courthouse in downtown Phoenix.  Spear’s sentencing is set for 9:30 a.m., Brunst’s for 10:30 a.m. and Lacey’s for 1:30 p.m.

Each man is situated differently.

Lacey, 75, was convicted in November on one count of international concealment money laundering in connection with a transfer of $17 million to a bank in Hungary.  The transfer was prompted by U.S. banks closing Lacey’s accounts, in part due to pressure on the banks from the federal government.  Lacey and his attorneys followed the law when making the transfer and reported the transfer to the IRS as required.

There was no “concealment,” but the jury convicted Lacey on this count anyway. Jurors also found him not guilty on another money laundering count and returned “no verdicts” on 84 counts related to conspiracy, money laundering and facilitating unlawful business enterprises involved in prostitution in violation of the U.S. Travel Act. The government contended at trial that Lacey’s former co-ownership of the classified-listings site, Backpage.com, was enough to make him guilty of those crimes.

The maximum Lacey could receive on the one count for which he was convicted? 20 years in prison.

Humetewa declared a mistrial on the 84 no-verdict counts and, in late January, the U.S. Attorney’s Office declared its intention to retry Lacey on those counts.  Subsequently, Humetewa set a tentative date for the re-retrial of Aug. 6.

That would be the third trial for Lacey on those charges.  The first trial in 2021 ended in a mistrial due to egregious prosecutorial misconduct.  After a failed appeal on double-jeopardy grounds, the case returned to Humetewa.  An 11-week trial, the second, ran from September to mid-November 2023.

Though the trial was to begin a month earlier, it was delayed after Lacey’s longtime business partner and fellow newspaperman, Jim Larkin, took his own life, driven to despair by this grueling six-year prosecution and the decade-long witch-hunt that preceded it.

Add to this the feds’ seizure of nearly all of Larkin and Lacey’s assets, including more than $10 million in attorney trust accounts, which were set aside to pay legal expenses, and Larkin’s suicide is no mystery.  Every man has a breaking point.

STRAIGHT ARROWS

Brunst, 72, and Spear, 73, onetime executives of the parent company of Backpage, face sentencing on a host of convictions that are equally unfounded.  They are straight-arrow men, who have given back to their communities and have never violated a law in their lives.

Backpage cooperated extensively with law enforcement and won case after case in the federal courts, which consistently ruled that Backpage was operating legally under the First Amendment and federal law. Backpage’s many attorneys repeatedly advised the company that they were legally kosher.

But Judge Humetewa precluded the defense from informing the jury of Backpage’s court victories, the advice of Backpage’s counsel and prior favorable court rulings.

Mentions of the First Amendment allowed in front of the jury? Minimal.

As a result, the jury found Brunst guilty on one conspiracy count and more than 30 money laundering counts; Spear was found guilty on 39 counts, including money laundering, conspiracy, and Travel Act violations.

The max on the money-laundering counts is either 10 years or 20 years, depending on the charge.  On the conspiracy and Travel Act counts, five years.  The sentencing guidelines are complex, and a presentence report will be prepared by the U.S. Probation Office recommending possible sentences based on several factors.

Brunst and Spear’s convictions come with a cruel irony:  the government roped them into this Kafkaesque nightmare because it wanted Larkin and Lacey behind bars.  Larkin and Lacey spent their entire lives in journalism, defying authority and exposing the foibles of the powerful, such as the late Sen. John McCain and his wife Cindy.

Unlike Craigslist, which shuttered its adult services advertising in 2010, Lacey and Larkin refused to do so, knowing they had the First Amendment and the law on their side.  Lacey became the voice of principled opposition and, therefore, the number one target for self-serving politicians and others having moral panics (who now have moved on to new targets).

The feds targeted Spear and Brunst, hoping they’d turn on Lacey and Larkin, as did the government’s star witness, Carl Ferrer.  But that did not happen.

Prosecutors had the same plans for Andrew Padilla and Joye Vaught, two middle-level, salaried employees at Backpage who also were charged.  The feds wanted them to turn as well.  But to their eternal credit, they didn’t.

But they paid a heavy price for standing by their principles — six years of their lives under psychological and financial torture.

In the end, Padilla and Vaught were vindicated.  The jury rebuked the government’s iron fist by sparing them, finding them not guilty on the 51 counts against them.  No doubt, the  jurors looked at these worker bees, saying, “There but for God’s grace go I.”

Humetewa recently rejected a defense motion to dismiss the case based on the government’s withholding of evidence and late disclosures thereof.  There are other pending motions for acquittal or a new trial on the guilty counts, on which Judge Humetewa has yet to rule.

All three men are certain to appeal their convictions if they are sentenced.

EQUAL JUSTICE OR VINDICTIVENESS?

If Judge Humetewa denies the pending motions and sentences these men, the number one question will be: will these men — who have obeyed all of the conditions of their release for going on six years, who are no threat to society and who are not flight risks — be allowed to remain out pending their appeals?

In December, I asked Tucson defense attorney Michael Piccarreta this very question.

He replied, thus:

“They’ve complied with all of their conditions of release.  These are nonviolent crimes.  They are ancient crimes.  They relate to Backpage, which no longer is in existence.  So, there’s no danger to anybody.  And there are super compelling issues [on appeal] . . . There’s no need to incarcerate [them] when there’s at least a possibility the case will get reversed.”

Indeed, both Judge Humetewa and Assistant U.S. Attorney Andrew Stone admitted in a recent hearing, there are serious issues for an appeal in this case.

But this prosecution has been an outlier in nearly all respects. So it’s difficult to trust the prosecution to treat Lacey, Spear and Brunst fairly.

“I don’t expect [the prosecutors] to do anything other than go after these people like they’re serial killers, which they’re not,” Piccarreta told me in December.

Will the prosecution treat Lacey, Spear and Brunst as it has other similarly situated individuals?  Will common sense and equality under the law prevail?  Or will vindictiveness and overkill rule the day?

We should know by May Day.

PLEASE ALSO SEE:
JUDGE SETS DATE FOR THIRD TRIAL OF JOURNALIST MICHAEL LACEY
AND
FEDS WILL RETRY LACEY, HUMETEWA SEALS TRIAL EXHIBITS

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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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