Sentencing for Journalist Michael Lacey Pushed Back to July 9

A statue of the Roman goddess Justitia in the Superior Courts Building in Budapest, Hungary (By Duke83 - Own work, CC BY-SA 4.0)
During a hearing on May 13 in Phoenix's federal court, Judge Diane Humetewa rescheduled to July 9 journalist Michael Lacey's sentencing date for his single guilty verdict in the 2023 Backpage trial.

The following represents the opinion of the author and no one else.

Government attorneys in the Backpage case previously signaled their intention to retry veteran newspaperman Michael Lacey on outstanding counts against him, asking for and getting a tentative trial date of Aug. 6.

In a hearing on Monday in Phoenix before federal Judge Diane Humetewa, Assistant U.S. Attorney Andrew Stone said the prosecution wants Lacey and two co-defendants to be sentenced on their respective guilty verdicts so the three men can appeal to the Ninth Circuit Court of Appeals, which hopefully will weigh in on “the number of unresolved issues” in the case.

“Then the government will decide if it will retry Lacey,” Stone told the judge.

Humetewa said she “remains concerned about the age of the case . . . and the status and age of all the defendants.”

But she agreed with the prosecutor on what should happen next.

“It makes better sense to pursue the appeal and have the sentencing hearing,” she said. “In that way, the total package goes back up to the Ninth.”

Humetewa vacated Lacey’s previously scheduled Aug. 6 retrial date and set sentencing for July 9 for Lacey and two former executives of Backpage’s parent company, Scott Spear and Jed Brunst. Humetewa said the sentencing hearing could be extended to July 10, if need be.

Government attorney Kevin Rapp told Humetewa that the prosecution planned on bringing in several of the women who testified for the prosecution at last year’s trial to speak as victims, presumably so the government can ask for more severe consequences for the defendants, who are all in their 70s and face the prospect of dying in prison.

Lacey’s attorney Paul Cambria raised the possibility that Lacey be allowed to remain out on bond pending the outcome of any appeal.

“That remains to be seen,” Humetewa told Cambria.

The one thing the judge and the parties agreed on was that there are weighty matters to be decided by the Ninth, including prosecutorial misconduct, the jury instructions on the U.S. Travel Act and the First Amendment, the late disclosure by the prosecution of potentially exculpatory evidence, and so on.

The Ninth Circuit could overturn the convictions or remand the case back to Humetewa for a retrial. It could take anywhere from eight months to two or three years before the Ninth issues a decision.

Which means there is no immediate end in sight for this vindictive prosecution, now in its seventh year.

The main question now is: will these three nonviolent, white-collar defendants — who have never physically hurt anyone — have to wait out their appeals in federal custody?

The Long and Winding Road

Last year, after an eleven-week trial, a jury found Lacey guilty on one count of international concealment money laundering and not guilty on another money-laundering count.

The jury was hung on 84 counts against Lacey related to conspiracy, money laundering, and violations of the U.S. Travel Act, which makes it illegal to use a vehicle of interstate commerce to facilitate business enterprises engaged in certain activities forbidden by state laws, such as prostitution.

International concealment money laundering is punishable by up to 20 years in prison.

In April 2018, the federal government seized and destroyed Backpage.com and arrested Lacey, his longtime business partner Jim Larkin, and four others — two salaried employees of Backpage and two executives of Backpage’s parent company. Prosecutors sought to hold the defendants vicariously liable for criminal acts committed by third parties, which the government linked to 50 ads on the site.

Above all, the government wanted Lacey’s head on a platter.  Lacey and Larkin co-owned Backpage, a classified listings site that was once part of Village Voice Media, a national chain of 17 alt-weekly newspapers. Lacey had nada to do with the running of Backpage or its policies. But Lacey vociferously defended the site’s right to publish under the First Amendment, a position validated by several federal and state court rulings in Backpage’s favor.

This defiance made Lacey a target of the government’s ire, as evidenced by the U.S. Department of Justice’s extreme tactics: overcharging the defendants with a 100-count indictment; utilizing an interpretation of the Travel Act that does not comport with the government’s interpretation in cases in other jurisdictions; the wholesale destruction of evidence; the suppression of internal DOJ memoranda showing Backpage complied with the law; the seizure of the defendants’ assets, including more than $10 million set aside for legal expenses; and egregious prosecutorial misconduct, including that which  caused a mistrial in the first, abortive 2021 trial.

At the 2021 trial, prosecutors repeatedly mentioned sex trafficking and child sex trafficking, forcing then-trial judge, Susan Brnovich, to bring an end to the proceedings after just three days of testimony. Notably, none of the defendants was charged with sex trafficking or child sex trafficking.

What was the result of all this dirty pool? The two Backpage employees — little fish roped in to try to make them roll — were acquitted on all counts. The two executives, Scott Spear and Jed Brunst, men who have never committed a crime in their lives, were convicted on multiple counts.

Lacey caught the one money laundering conviction, though testimony from one of his attorneys at trial showed that Lacey complied with all laws and paid all taxes involving a transfer of funds overseas, one made necessary due to the FBI harassing Lacey’s banks to the point they would no longer do business with him.

Lacey was not convicted on any of the conspiracy or Travel Act counts. Which is likely why the government announced it wanted to retry Lacey on the 84 outstanding counts.

Humetewa threw a wrench into those plans when she ruled on a defense motion, made during the trial, to acquit the defendants on all charges. When it came to Lacey, Humetewa acquitted him on 50 counts, leaving 34 remaining.

Let that sink in: 50 counts, more than half of all charges brought against Lacey.

No wonder the government’s having second thoughts about a third trial.

Overcharging the defendants served to make them appear guilty in the eyes of the public and the jury.

It also arguably led to the demise of Larkin, who committed suicide on the eve of the second trial, impoverished and driven to despair by the prosecution’s ruthlessness.

Target Lacey

In April, attorney Cambria filed a motion seeking a status conference to discuss when Lacey would be sentenced and if the government intended to retry him.

The government had signaled that it wanted Lacey sentenced on the one count of international concealment money laundering, then Lacey could appeal along with Brunst and Spear. After the appeals court ruled, the government could decide whether it wanted to try  Lacey for a third time.

Cambria took the position in his motion that Lacey would not be able to appeal “because a judgment sentencing Mr. Lacey on Count 100 would not be a final judgment subject to appeal unless the government dismisses all the remaining charges.”

Cambria cited several legal precedents, including a 1956 U.S. Supreme Court decision in Parr v. United States.

Quoting the ruling, Cambria wrote:

“Long ago, the Supreme Court explained that ‘a judgment’ or a ‘decision’ is final for the purpose of appeal only ‘when it terminates the litigation between the parties on the merits of the case, and leaves nothing to be done but to enforce by execution what has been determined.'”

The Ninth Circuit “generally can review only final judgments,” wrote Cambria, and since 34 counts remained outstanding, ” a judgment on Count 100 would not be subject to appeal.”

If the state demands that Lacey be incarcerated immediately or shortly after sentencing, the consequences for Lacey could verge on the Kafka-esque.

Cambria wrote:

“Critically,  if the Ninth circuit declines jurisdiction over an appeal of a sentence on Count 100 because it does not qualify as a ‘final judgment’ due to the outstanding counts, and the sentence has been executed, Mr. Lacey would be incarcerated but unable to challenge his sentence and that scenario, ‘would raise fundamental notions of due process.”

During Monday’s status conference, Cambria reiterated these points, noting that he had not yet been retained by Lacey for a third trial. Lacey might have to ask the court for a so-called “Monsanto hearing,” in which the court would determine if any of Lacey’s frozen assets could be released to help pay attorneys’ fees.

Cambria argued that the best scenario would be for the court to hold off on sentencing Lacey until the Ninth Circuit had ruled on Brunst’s and Spear’s appeals.

Prosecutor Stone agreed with Cambria that there were many “unresolved issues” that the Ninth must weigh in on, a view shared by Humetewa.

But Stone countered that Lacey needed to be a part of any appeal to the Ninth, and so, Lacey must be sentenced. Stone assured the court that, based on legal precedents, that Lacey would be able to appeal Count 100, despite the outstanding counts.

Stone then asked that all three defendants be sentenced on the same date for the sake of efficiency.

Humetewa agreed with the government.

She said that “if there is a question if the Ninth has the jurisdiction” to take up Lacey’s appeal, then “this should be the case” where the Ninth answers that question.

Humetewa set July 9 as the date for sentencing Lacey, Spear and Brunst. Lacey and Brunst’s sentencing hearings were previously scheduled for June 17.

Please also see:
Judge Acquits Journalist Michael Lacey on 50 of 84 Counts in Backpage Case (w/Update)
and
Judge Sets Sentencing Dates for Backpage Defendants (w/Update)

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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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