Phoenix, AZ – A federal judge in Phoenix today sentenced the three owners of Backpage, a notorious prostitution website, for their roles in promoting illegal activities and laundering the proceeds. The sentencing marks a significant victory in the fight against online sexual exploitation.
Michael Lacey, 76, of Paradise Valley, Arizona, received a five-year prison sentence followed by three years of supervised release. Scott Spear, 73, and John “Jed” Brunst, 72, both of Phoenix, were each sentenced to 10 years in prison with three years of supervised release. The court also ordered all three defendants to surrender to the U.S. Marshals Service by noon on September 11.
“The defendants and their co-conspirators amassed more than $500 million by operating an online platform 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. “They believed they could conceal their illegal profits through complex money laundering schemes involving shell companies in foreign countries. Today’s sentences serve as a powerful reminder that we are committed to protecting victims and following the money trail to unmask those who exploit human beings for financial gain.”
“These convictions hold accountable three top executives who profited from an enterprise built on criminal activities,” said U.S. Attorney Gary Restaino for the District of Arizona. “The courage of Backpage’s victims has been vindicated by the sentences imposed today, which include significant prison terms and a substantial fine for defendant Lacey. This fine will benefit the Crime Victims Fund and support victims of crime nationwide.”
Court documents and evidence presented at trial revealed that Lacey, Spear, and Brunst were the owners of Backpage. From September 2010 until the website’s seizure by the U.S. government in April 2018, Backpage was the leading online platform for prostitution ads. The trial exposed how the conspirators knowingly promoted prostitution through various marketing strategies, including a reciprocal link program with an independent web forum that allowed “johns” to post reviews of specific women. They also employed automated filters and human moderators to remove certain terms while allowing ads that promoted prostitution to remain, creating a façade of plausible deniability.
Over the course of the conspiracy, the three executives earned more than $500 million. To hide these illicit earnings, they laundered the money through multiple shell companies based in foreign countries.
In November 2023, a federal jury in Phoenix convicted Lacey of international concealment money laundering. Spear was found guilty of conspiracy to violate the Travel Act, 17 counts of violating the Travel Act, money laundering conspiracy, and 10 counts of concealment money laundering. Brunst was convicted of conspiracy to violate the Travel Act, money laundering conspiracy, 10 counts of concealment money laundering, and five counts of international promotional money laundering.
Today’s sentences follow previous convictions of other Backpage leadership and corporate entities:
- In April 2018, Carl Ferrer, 57, of Frisco, Texas, Backpage’s co-founder and CEO, pleaded guilty to conspiracy to facilitate prostitution using a facility in interstate or foreign commerce and to engaging in money laundering.
- In August 2018, Dan Hyer, 54, of Dallas, Backpage’s Sales & 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, passed away on July 31, 2023, before his trial began.
The sentences were announced by Principal Deputy Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Gary M. Restaino for the District of Arizona, Special Agent in Charge Carissa Messick of the IRS Criminal Investigation (CI) Phoenix Field Office, Acting Assistant Director Jodi Cohen of the FBI’s Criminal Investigative Division, Special Agent in Charge Jose A. Perez of the FBI Phoenix Division, and Acting Inspector in Charge Matthew Shields of the U.S. Postal Inspection Service (USPIS) Los Angeles Division.
Assistant U.S. Attorneys Kevin Rapp, Margaret Perlmeter, and Peter Kozinets for the District of Arizona, along with Trial Attorney Austin M. Berry of the Criminal Division’s Child Exploitation and Obscenity Section, prosecuted the case. They received significant support from the U.S. Attorney’s Office for the Central District of California, the Office of the California Attorney General, and the Office of the Texas Attorney General. Assistant U.S. Attorney Joseph Bozdech for the District of Arizona handled the asset forfeiture aspects of the case.
