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GARY M. RESTAINO

United States Attorney

District of Arizona

KEVIN M. RAPP (Ariz. Bar No. 014249, kevin.rapp@usdoj.gov) MARGARET PERLMETER (Ariz. Bar No. 024805, margaret.perlmeter@usdoj.gov) PETER S. KOZINETS (Ariz. Bar No. 019856, peter.kozinets@usdoj.gov) 

ANDREW C. STONE (Ariz. Bar No. 026543, andrew.stone@usdoj.gov) 

Assistant U.S. Attorneys 

40 N. Central Avenue, Suite 1800 

Phoenix, Arizona 85004-4408 

Telephone (602) 514-7500 

DAN G. BOYLE (N.Y. Bar No. 5216825, daniel.boyle2@usdoj.gov) Special Assistant U.S. Attorney 

312 N. Spring Street, Suite 1400 

Los Angeles, CA 90012 

Telephone (213) 894-2426 

NICOLE M. ARGENTIERI

Acting Assistant Attorney General Criminal Division, U.S. Department of Justice 

AUSTIN M. BERRY (Texas Bar No. 24062615, austin.berry2@usdoj.gov) 

U.S. Department of Justice 

Child Exploitation and Obscenity Section 

1301 New York Avenue, NW, 11th Floor 

Washington, D.C. 20005 

Telephone (202) 412-4136 

Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America, 

 Plaintiff, 

 v. 

Michael Lacey, et al., 

 Defendants. 

CR-18-422-PHX-DJH 

UNITED STATES’ RESPONSE TO 

DEFENDANT BRUNST’S 

SUPPLEMENTAL BRIEF IN 

SUPPORT OF RULE 29 MOTION 

(Doc. 2007) 

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SUMMARY OF ARGUMENT

Defendant Brunst’s Rule 29 Motion should be denied. Brunst’s Supplemental Brief 

in Support of Rule 29 Motion (Doc. 2007 (“Supp.”)) does nothing to bolster his argument. 

Defendant fails to show that when the evidence is viewed in the light most favorable to the 

United States, it was inadequate to allow any rational juror to find the essential elements 

of the crimes beyond a reasonable doubt. The trial evidence demonstrated that Brunst 

played a pivotal role in both the Travel Act and money laundering conspiracies. In addition, 

the evidence supports Brunst’s convictions for the substantive money laundering counts 

alleged against him. His convictions should remain. 

FACTUAL BACKGROUND

I. Brunst Owned and Served as Backpage’s Chief Financial Officer

Brunst owned Backpage.com (Backpage), along with Michael Lacey, Jim Larkin, 

and Scott Spear. 9/12/23 p.m. Tr. at 11:23-12:5, 78:25-79:1. Brunst served as Backpage’s 

Chief Financial Officer (CFO) of Backpage’s parent company. Ex. 5. 

In 2013, 2014, and 2015, the great majority of Brunst’s income—over $6,000,000, 

$10,000,000, and $3,800,000, respectively—came from Backpage. 10/13/23 a.m. Tr. at 

127:7-133:14; Ex. 1481.

II. Brunst Understood, and Approved of, the Marketing Strategies that 

Accelerated Backpage’s Growth

Brunst’s co-conspirators—Spear and Ferrer—quickly recognized that Female 

Escorts was the most profitable category in Backpage’s Adult section, and that Female 

Escorts meant “hooker ads.” 9/12/23 p.m. Tr. at 90:12-91:22; Exs. 1056, 1056a; see Ex. 

1057. They focused on growing escort advertising because, based on their experience, they 

“knew the revenue implications”: “Money.” 10/18/23 p.m. Tr. at 96:1-15; 10/18/23 p.m. 

Tr. at 95:4-96:19. Unlike a job ad, where the need to advertise ends after a position is filled, 

escorts “needed repeat business” and wanted to advertise “everyday.” 10/18/23 p.m. Tr. at 

95:8-18. 

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A. Content Aggregation

To expand escort ads, Spear directed the roll-out of Backpage’s “content 

aggregation” marketing strategy, “which was internal code for stealing ads from 

Craigslist”—primarily “their Erotic Services” ads. 9/12/23 p.m. Tr. at 26:16-24. Spear and 

Ferrer presented aggregation to Brunst and Larkin as a strategy to meet growth goals in 

2009. 9/13/23 p.m. Tr. at 42:16-43:11. Brunst approved this strategy and permitted the 

company to hire staff to execute it. 9/12/23 p.m. Tr. at 30:6-12; id. at 89:1-90:1-7 

(discussing plan to “seed the site, the Female Escorts category, with 200 independent 

escorts”). 

B. The Erotic Review

Brunst was aware, and approved of, Backpage’s partnership with The Erotic Review 

or TER, a prostitution review website where “Johns” (purchasers of sex from prostitutes) 

provided “[t]he price of the services and a description of the sexual services along with a 

description of the escort[.]” 9/12/23 p.m. Tr. at 32:1-6; see 9/13/23 a.m. Tr. at 21:21-27:5. 

As Ferrer testified, this partnership “was the secret sauce”: “[B]y having a relationship with 

The Erotic Review, we could make those ads that we stole from Craigslist, we could make 

their phone numbers ring.” 9/12/23 p.m. Tr. at 31:11-16. See id. at 41:23-25 (TER was a 

reason why “Backpage became the default choice” when Craigslist shut its Adult section). 

Brunst attended annual budget meetings where other employees presented 

Backpage’s financial forecast for the coming year. 10/10/23 p.m. Tr. at 130:4-132:11. In 

the 2008 budget plan, the overview included the following language, “we struck a deal 

with TheEroticReview.com, TER, with reciprocal links it created huge brand awareness in 

this niche industry and increased page views from TER by 120,000 per day.” Ex. 23 at 3; 

9/13/23 a.m. Tr. at 70:10-73:20. See also 9/13/23 p.m. Tr. at 43:12-44:1; Exs. 19, 20. In 

addition to hyper-linking Backpage ads to TER prostitution reviews (and vice-versa), see

10/10/23 p.m. Tr. at 134:20-136:9, the TER relationship included a “banner ad exchange 

program” where each website featured banner ads for the other. 9/12/23 p.m. Tr. at 35:18-

37:2. 

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In 2009, the budget plan that Brunst received included additional information about

TER. That budget plan stated both that “TER – [has] high page view per referral” and “[w]e 

have made a special buy with TER in terms of high quality referrals.” Ex. 24a. 

For years, Brunst, Spear, and Larkin regularly received Google Analytics reports 

showing that The Erotic Review was the number one source of non-search engine referrals 

to Backpage. 9/12/23 p.m. Tr. at 35:6-12, 41:1-7; 9/13/23 a.m. Tr. at 21:21-27:5; 9/13/23 

p.m. Tr. at 46:16-47:21, 49:4-22, 50:6-9; 9/19/23 p.m. Tr. at 12:22-15:16, 88:4-9; see, e.g., 

Exs. 19, 986, 986a, 1151, 1151a, 1919, 1919a, 1924, 1926. 

Backpage paid TER $4,000 per month for years as part of this relationship. 9/12/23 

p.m. Tr. at 35:18-37:2. Ferrer submitted the invoices to Spear and Brunst for approval. 

9/13/23 p.m. Tr. at 27:17-28:6; id. at 35:11-12. 

C. Moderation and Outside Scrutiny

Backpage began sanitizing the site of certain “terms [that] made the ads more 

obvious prostitution[.]” 9/12/23 p.m. Tr. at 60:8-10, 60:15-17. As Ferrer testified, “we 

started removing those words from the ad but not deleting the ad.” 9/12/23 p.m. Tr. at 

60:17-18. Brunst, along with Spear and Larkin, approved budget increases for these types 

of moderation practices. 9/13/23 p.m. Tr. at 106:21-107:2.

Backpage also started receiving thousands of prostitution investigation subpoenas. 

See, e.g., 9/13/23 a.m. Tr. at 62:16-25. In April 2010, responding to a Lacey email asking 

“is there any evidence of child trafficking anywhere?,” Spear replied: “We have had 

subpoenas that deal with this exact issue. . . . We get a ton of subpoenas that we comply 

with on a daily basis.” Ex. 804. Spear and Brunst approved hiring staff to handle the 

subpoenas. 9/13/23 a.m. Tr. at 62:11-15, 63:11-21, 65:4-9.

In late 2010, Backpage learned CNN was planning an exposé about the site. 9/14/23 

a.m. Tr. at 80:20-21. Backpage management watched and discussed the CNN report in 

early 2011. 9/15/23 a.m. Tr. at 43:15-44:7. It showed CNN’s Amber Lyon posting an ad 

of herself on Backpage’s escorts section, using text from a Backpage ad selling a 12-yearold girl. Ex. 1052b1. When Lyon posted, her phone “start[ed] ringing off the hook.” 

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9/15/23 a.m. Tr. at 59:16-23. Brunst, Lacey, and Spear tried to stop CNN from 

rebroadcasting the story. 9/15/23 a.m. Tr. at 60:10-62:13.

In 2012, Brunst wrote to Backpage’s corporate investors that “the Backpage 

pressure has reached red hot.” Ex. 2042. Near the end of 2012, Larkin, Brunst, and Spear 

asked Ferrer to provide a comparison of revenue growth by sections from October 2010 to 

November 2012. 9/20/23 a.m. Tr. at 64:6-66:1; Exs. 355, 355b. The comparison showed 

huge growth in Adult compared to all other sections, which Ferrer attributed to the 

company’s moderation strategy. 9/20/23 a.m. Tr. at 65:19-20. See id. at 65:23-66:1.

III. Brunst’s PowerPoint Presentation Demonstrated Particular Knowledge About 

Backpage’s Business Practices

In 2011, Brunst asked Ferrer to help in creating a presentation to give to Backpage’s 

potential buyers. 9/19/23 p.m. Tr. at 15:17-16:6. Brunst headed efforts to sell the website, 

which included creating a PowerPoint to present to prospective buyers. 9/19/23 p.m. Tr. at 

16:4-16:6, 17:11-18:2. That PowerPoint included a slide on revenue, which showed that 

nearly 80% of Backpage’s revenue derived from the Female Escorts section and over 94%

of the revenue was generated from the Adult category. Ex. 120 at 15, 17. Brunst received 

other internal documents that demonstrated the same revenue split. Exs. 355, 355b. Brunst 

understood that Backpage made nearly all of its revenue from the Female Escorts section. 

The PowerPoint presentation Brunt created also included the following statement: 

“Maintaining a vibrant general purpose classifieds site strengthens Backpage’s defensible 

market position in the Adult category: Creates mainstream environment for site participants 

and allows ‘plausible deniability’ for exposure.” Ex. 120 at 17 (emphasis added). 

“Plausible deniability” was a key selling point Brunst used in attempting to offload the 

website, though his efforts ultimately proved unsuccessful. 

IV. As Backpage Grew Toxic, Banking Became the Primary Focus

In 2013, Brunst continued to serve as Backpage’s CFO. 9/20/23 p.m. Tr. at 13:9-

14:1. But Brunst avoided using a “backpage.com” email address because of “reputational 

risk”— Backpage’s name had become toxic. 9/20/23 p.m. Tr. at 14:2-9. That toxicity 

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triggered a banking crisis: other internal issues were put “on the back burner” “[b]ecause 

the barn is on fire[.]” 9/20/23 p.m. Tr. at 47:23-48:7. From 2013 forward, the company’s 

“entire focus . . . is banking, is trying to get payments, ways for users to be able to pay for 

ads and then find treasury banking solutions.” 9/20/23 p.m. Tr. at 29:7-16. 

In 2013, Backpage’s U.S.-based credit card processor, Litle, announced it was 

dropping Backpage. 9/12/23 p.m. Tr. at 69:17-70:8. Ferrer then “worked] closely” with 

Brunst, Spear, and Larkin “to secure credit card processing from Europe.” 9/20/23 p.m. Tr. 

at 14:22-15:7. When Chase Bank informed Backpage that it “was no longer accepting 

transactions from Backpage.com, due to their involvement in human trafficking,” Ex. 173, 

Backpage responded by directing Chase credit card purchasers to EMP (e-Merchant Pay), 

a European processor that would “use a different billing descriptor that won’t say 

Backpage.com on it.” 9/20/23 p.m. Tr. at 21:7-22; Ex. 173; see also Ex. 1110.

In September 2013, Ferrer wrote Brunst and Spear about Netcash, a Cyprus-based 

credit card processor. 9/20/23 p.m. Tr. at 13:3-8; Ex. 1092. In October 2013, Ferrer 

exchanged emails with Brunst, copying Larkin and Spear, about getting the CCBill contract 

signed, and Ferrer’s discussions with “JetPay” regarding other banking solutions. 9/20/23 

p.m. Tr. at 31:12-37:23; Ex. 752.

In November 2013, Ferrer sent Larkin, Brunst, and Spear a consultant’s 

recommendations on credit card transactions. 9/20/23 p.m. Tr. at 37:24-40:13; Ex. 175. 

The recommendations included using names, internet addresses, and billing descriptors 

that don’t include “Backpage.” 9/20/23 p.m. Tr. at 38:24-42:22. Backpage’s executives 

started “open[ing] up holding companies with innocuous names like Classified Solutions, 

Payment Solutions, just general-sounding companies that you don’t know really—they 

don’t say Backpage.” 9/20/23 p.m. Tr. at 15:12-23; 10/10/23 p.m. Tr. at 74:13-14.

The recommendations also included “load balancing across many banks with 

different billing descriptors”; as Ferrer explained, this meant “adding a lot of banks” and 

“distributing . . . transactions” to stay below thresholds that would otherwise trigger 

reviews by Mastercard and Visa. 9/20/23 p.m. Tr. at 38:10-23. Backpage accordingly used 

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Classified Solutions (in England) for credit card processing with EMP (in Bulgaria), and 

spread payments from EMP across other banks including Borgun (in Iceland) and Bank 

Frick (in Liechtenstein). 9/20/23 p.m. Tr. at 43:18-44:6; 9/21/23 p.m. at 76:3; Ex. 6189.

A. Creation of Website Technologies 

Backpage’s dealings with U.S.-based financial institutions continued to deteriorate. 

This deterioration caused Brunst, among others, to create a separate “shell company”

named Website Technologies, so they could open bank accounts under a name other than 

“Backpage.” 9/21/23 p.m. Tr. at 89:8-10 (Website Technologies was a “very generic 

sounding company that we could open bank accounts with”); see also 9/20/23 p.m. Tr. at 

28:19-26 (“We needed a name other than Backpage . . . . Brunst asked me for names and I 

suggested Website Technologies and that’s the name we ended up using.”). When US Bank 

gave notice in April 2014 of dropping the company, Brunst wrote Spear, Ferrer and others

that “[w]e will move all banking under Website Technologies at BMO.” 9/20/23 p.m. Tr. 

at 72:5-73:4; Exs. 178, 178a. Also in April 2014, Ferrer updated Brunst and Spear that 

Chase had “figured . . . out” that Backpage had temporarily succeeded in allowing

customers to use Chase credit cards for adult ads by using “a different billing descriptor,” 

“so we just have to change again.” Ex. 1120; 9/20/23 p.m. Tr. at 90:17-24, 91:25-92:4. 

Brunst also was cognizant about ensuring that the name Website Technologies didn’t 

become affiliated with Backpage. See Trial Ex. 177 (When asked by Ferrer and employee 

Joe Kaiping whether they could replace their “backpage.com” email addresses with 

“websitetechnologies.com,” Brunst replied: “We need to think this thru or all the work to 

separate it from BP will be lost.”); see also 9/20/23 p.m. Tr. at 71:17-72:4 (“[Brunst] set 

up Website Technologies to handle payroll, 401(k) and to do leases so he wants to ensure 

that its reputation is protected, not affiliated with Backpage.”).

The money that flowed through Website Technologies derived primarily “from 

postings in the female escorts section” on Backpage and, Ferrer testified that Website 

Technologies and Backpage were “the same company.” 9/21/23 P.M. Tr. at 90:16-22 & 

11:23-12:4. 

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B. Credit Card Armageddon 

After Visa, Mastercard, and American Express dropped Backpage by mid-2015, the 

sellers, represented by Brunst, assisted Backpage in trying to obtain credit card processing. 

9/12/23 p.m. Tr. at 81:7-16. Brunst “was involved in the financial problems the company 

was having and wanted to understand the revenue that was coming in and what our options 

were for banking and when we might, you know, get the reserves coming from these other 

credit card processors[.]” 9/12/23 p.m. Tr. at 81:23-82:3. Ferrer or Backpage’s then-CFO 

had contact with Brunst “[a] minimum of a few times a week” from July 2015 going 

forward. 9/12/23 p.m. Tr. at 82:4-8.

Brunst helped find alternative methods for receiving money from the pimps and 

prostitutes who advertised on Backpage, which included turning to cryptocurrency. Ex. 

897; 9/21/23 p.m. Tr. at 78:19-79:19; 93:24-94:20. After the credit cards stopped working 

with Backpage, the amount of revenue the company received through cryptocurrency 

proliferated. Ex. 1545. Within 18 months, Backpage went from receiving under $15,000 a 

month from cryptocurrency (Feb. 2015) to receiving over $3.5 million (May 2016). Ex. 

1545. When the banks and the credit card companies stopped doing business with 

Backpage, Brunst led the charge in finding other ways to keep the revenue flowing.

ARGUMENT

Brunst moves under Rule 29 for an acquittal for all 34 counts in which the jury 

found him guilty. But to overturn the jury’s verdicts, Brunst must overcome the steep 

hurdle of showing that the evidence—“‘view[ed] . . . in the light most favorable to the 

prosecution’”—could not have allowed “‘any rational trier of fact’” to find that the ads 

proposed illegal transactions. United States v. Nevils, 598 F.3d 1158, 1163-64 (9th Cir. 

2010) (en banc) (quoting Jackson v. Virginia, 443 U.S. 307, 319 (1979). As documented 

below, Brunst fails to do so under this liberal standard. 

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I. The Evidence Supports Brunst’s Count 1 Conviction

A. The United States’ Argument About the “Object” of Defendants’

Conspiracy Was Appropriate

The Ninth Circuit defines a conspiracy as “a combination of two or more persons to 

accomplish some unlawful purpose, or some lawful purpose by unlawful means.” United 

States v. Caplan, 633 F.2d 534, 542 (9th Cir. 1980) (emphasis added). The conspiracy 

alleged against Defendants in the Superseding Indictment adhered to this definition. Doc. 

230 at ¶ 197. The United Statesthen argued this point to the jury during closings. 10/27/23 

p.m. Tr. at 6:8-7:12. “There was an agreement between two or more persons to commit 

violations of the Travel Act. . . . Defendant became members of the conspiracy knowing 

of at least one of its objects and intending to help accomplish it. What is the object in this 

case? Well, one of the objects is to make money. And they did.” 10/27/23 p.m. Tr. at 6:8-

23. And, “[t]here is no federal statute that says it’s illegal to make hundreds of millions of

dollars. That’s not the charge. That is not the crime. They are not charged with making 

money. . . . They are charged with how they made money, and that was off the backs of 

people engaged in illegal prostitution business enterprises.” 11/1/23 p.m. Tr. at 40:12-21; 

see also Ninth Circuit Model Crim. J. Instructions 11.1 (word “illegal” not listed before 

“objects”).

The United States’ allegations in the Superseding Indictment and subsequent 

argument to the jury were both entirely appropriate. The Court has already recognized this 

fact. During oral arguments for finalizing the jury instructions, the Court ruled:

Again, I think we had this argument early on in the case, and I went back and 

looked at what was argued it appears to me that under the [C]aplan case, the 

additional guidance there is that a conspiracy is defined as a combination of 

two or more persons to accomplish some unlawful purpose or some lawful 

purpose by unlaw means. And so because of that, I think it is not necessary 

to include “illegal.”

10/26/23 a.m. Tr. at 18:20-19:1.

The Court’s position is entirely correct. Defendant’s cited cases are distinguishable 

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and don’t change the Court’s previous conclusion. In United States v. Manarite, 44 F.3d 

1407 (1995), the Ninth Circuit overturned the conspiracy conviction because the United 

States had alleged multiple objects, but the jury used a general verdict form, “which gave 

no indication of which object or objects formed the basis of their decision.” Id. at 1413. 

The Ninth Circuit found that two of the alleged objects—wire fraud and mail fraud—were 

defective as a matter of law. Id. While other objects of the conspiracy would have been 

legally sufficient to support the conviction, the jury’s use of the general verdict form made 

that determination impossible. Id. Here, the only object alleged—and argued by the United 

States—was to make money through an agreement to violate the Travel Act. Doc. 230 at 

¶ 197; 10/27/23 p.m. Tr. at 6:8-23. Brunst also cites the unreported United States v. 

Johnson, 44 F. App’x 752 (9th Cir. 2002), which is equally unpersuasive. That case is 

similar to Manarite in that the United States alleged a conspiracy with multiple objects, 

including an object that wasn’t a federal offense. Id. at 754. The jury returned a general 

verdict form that didn’t allow for determining the object relied upon by the jury. Id. Again, 

these facts aren’t present here because the conspiracy to violate the Travel Act only had

one object—to make money through the promotion of business enterprises involving 

prostitution offenses. Doc. 1998 at 24, 43.

B. Trial Evidence Supported the Jury’s Conclusion that Brunst Was Guilty 

of Conspiracy to Violate the Travel Act

A rational juror, when viewing the evidence in the light most favorable to the United 

States, could certainly find Brunst guilty of conspiracy to violate the Travel Act. The facts 

as described at trial (and partially recounted above) demonstrate his intent, knowledge, and 

understanding of Backpage’s business practices, including the reciprocal link relationship 

with TER, aggregation, and moderation. See supra. Brunst conspired to promote business 

enterprises that posted millions of ads on Backpage which, in turn, helped line his pockets, 

including over $20 million in a three-year period. Ex. 1481.

Brunst asserts the Travel Act conspiracy in Count 1 is cabined by the 50 ads charged 

in the substantive Travel Act counts, Counts 2-51. See Supp. at 6. Not so. The United States 

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could have charged Count 1 without charging any substantive Travel Act counts; Counts 

2-51 merely reflect examples of the scores of such violations the resulted for Defendants’ 

operation of Backpage. As the Court has repeatedly recognized, Count 1 alleges a 14-year 

conspiracy spanning 2004 to 2018, and conduct before 2013 is clearly relevant to the 

charge. Doc. 1643 at 4 (“[T]he Court has already clarified that the Government may 

introduce proof of the entirety of the scope of the conspiracy.”); Doc. 1643 at 6 (“[T]he 

Court already found that facts that pre-date the 2013 allegations were relevant as evidence 

demonstrating ‘furtherance of the charged conspiracy.’”); 10/26/23 a.m. Tr. at 24:25-25:1 

(recognizing that the indictment charges a conspiracy from 2004-2018). 

Based on Brunst’s mischaracterization of Judge Brnovich’s Order, he then attempts 

to argue that the United States failed to establish that he was in a conspiracy to violate the 

Travel Act vis-à-vis the 50 charged ads. Supp. at 7. But Brunst, as Defendants have 

throughout this case, takes a hyper-restrictive view of the evidence. Brunst focuses on the 

purported dearth of granular evidence that relates to these specific ads, rather than 

understanding the broader sweep of Defendants’ policies and strategies. As this Court has 

already recognized, the facts in the Superseding Indictment “establish defendants had the 

specific intent to promote prostitution in violation of the Travel Act.” Doc. 793 at 20. At 

trial, the United States established these facts and the jury found that evidence persuasive 

to convict Brunst. Under the liberal Jackson/Nevils standard, Brunst’s motion fails.

II. Evidence Supports Brunst’s Money Laundering Convictions.

A. Jury Appropriately Found Brunst Guilty of Concealment Money 

Laundering (Counts 53-62)

1. Travel Act Violations

Brunst’s argument that he must be acquitted of the concealment money laundering 

counts (53-62) because “there is no specified unlawful activity that the jury could have 

found” is wrong. The money laundering counts don’t need to be tied to a charged 

substantive count. Indeed, the Court has found that even if the Travel Act counts were 

dismissed, the money laundering counts would survive. Doc. 946 at 17 (“even if the Travel 

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Act violations were inadequately plead, which they are not, and were the only foundation 

for the money laundering charges, the money laundering counts would still survive”). 

This argument is also contrary to controlling case law. United States v. Lazarenko, 

564 F.3d 1026, 1033–34 (9th Cir. 2009) (government need not allege all the elements of 

the specified unlawful activity when bringing money laundering charges); see also United 

States v. Golb, 69 F.3d 1417, 1429 (9th Cir. 1995) (same); United States v. Yagman, 2007 

WL 9724388, at *20 (C.D. Cal. May 3, 2007) (collecting cases); United States v. Cherry, 

330 F.3d 658, 667 (4th Cir. 2003) (“It is clear that a defendant may be convicted of money 

laundering even if she is not a party to, much less convicted of, the specified unlawful 

activity.”); United States v. Richard, 234 F.3d 763, 766-69 (1st Cir. 2000) (money 

laundering conviction “does not require proof that the defendant committed the specified 

predicate offense”); United States v. Martinelli, 454 F.3d 1300, 1312 (11th Cir. 2006) (“It 

is by now abundantly clear that in a money laundering case (or in a money laundering 

conspiracy case), the defendant need not actually commit the alleged specified unlawful 

activity.”); United States v. Awada, 425 F.3d 522, 525 (8th Cir. 2005) (“[T]here is 

absolutely no requirement that a money laundering defendant also be involved in the 

underlying crime.”); United States v. Mankarious, 151 F.3d 694, 703 (7th Cir. 1998) 

(rejecting “the defendants’ argument that the district court’s dismissal of the mail fraud 

counts mandates the reversal of the money laundering convictions”); United States v. 

Kennedy, 64 F.3d 1465, 1479-80 (10th Cir. 1995) (affirming money laundering convictions 

despite acquittal of specified unlawful activity).

Brunst’s arguments that (a) he wasn’t convicted of any substantive Travel Act 

counts; (b) Defendant Spear’s convictions pre-dated transactions identified in Counts 53-

62; and (c) there are no substantive Travel Act counts alleged that match the dates for the 

concealment money laundering counts are all red herrings. These facts matter not. Again, 

the Court has already addressed this particular issue:

For instance, the first money laundering statute that Defendants are indicted 

under does not require the Government to allege or prove the underlying 

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offenses. See 18 U.S.C. § 1956(c)(1) (“the term ‘knowing that the property 

involved in a financial transaction represents the proceeds of some form of 

unlawful activity’ means that the person knew the property involved in the 

transaction represented proceeds from some form, though not necessarily 

which form, of activity that constitutes a felony.” (emphasis added)). The 

same thing goes for the other money laundering statute. See 18 U.S.C. 

§ 1957(c) (“In a prosecution for an offense under this section, the 

Government is not required to prove the defendant knew that the offense 

from which the criminally derived property was derived was specified 

unlawful activity.”).

Doc. 946 at 17 (emphasis in original).

The United States could have charged Brunst—along with his co-defendants—

strictly with money laundering crimes without charging the specified unlawful activity. 

Awada, 425 F.3d at 525 (“[T]here is absolutely no requirement that a money laundering 

defendant also be involved in the underlying crime.”) What the United States needed to 

prove to support the concealment money laundering counts is accurately described by 

Brunst: “[T]he government must prove that (1) the defendant conducted or attempted to 

conduct a financial transaction; (2) the transaction involved the proceeds of unlawful 

activity; (3) the defendant knew that the proceeds were from unlawful activity; and (4) the 

defendant knew ‘that the transaction [was] designed in whole or in part—(i) to conceal or 

disguise the nature, the location, the source, the ownership, or the control of the proceeds 

of specified unlawful activity.’” Supp. at 8 (citing United States v. Wilkes, 662 F.3d 524, 

545 (9th Cir. 2011)). The evidence that Brunst knew that (a) Backpage primarily derived 

its revenue from promotion of business enterprises that posted prostitution advertisements, 

and (b) each of the transactions at issue in Counts 53-62 included Backpage revenue are 

beyond dispute. See supra Factual Background.

2. Transactions in Counts 53-62 Were Designed to Conceal

The ten financial transactions that constitute the concealment money laundering 

counts (53-62) were all designed to conceal. First, Ninth Circuit case law makes clear that 

a transaction need not have been particularly complicated, or involve multiple steps, to 

support a concealment money laundering conviction. See, e.g., United States v. Twitchell, 

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69 F. App’x 892, 894 (9th Cir. 2003) (“On one of the money laundering counts, the jury 

also found Twitchell guilty of concealing or disguising bank fraud, in violation of 18 

U.S.C. § 1956(a)(1)(B)(i), by transferring money from his business account at the bank 

into private investment accounts at the brokerage house. A reasonable jury could have 

found that the deposits of proceeds from the bank fraud into brokerage accounts were made 

to disguise or conceal the proceeds.”); United States v. Sun, 673 F. App’x 729, 733 (9th 

Cir. 2016) (affirming a money laundering conviction where “[v]iewing the evidence in the 

light most favorable to the prosecution, a rational jury could find that Sun deposited the 

illegal cash proceeds from his medical practice into his personal bank account, rather than 

his business account, with the purpose “to conceal or disguise the nature [or] . . . the source” 

of the proceeds.”); United States v. Kellum, 119 F. App’x 32, 34 (9th Cir. 2004) (affirming 

concealment money laundering conviction where the defendant purchased a Wells Fargo 

cashier’s check with a manual check drawn on a Fidelity account; “[A] rational jury could 

find on the government’s evidence that by purchasing the Wells Fargo cashier’s check, 

Kellum helped to conceal the Fidelity account as the source of his fraudulently-obtained 

assets, making it harder for federal investigators to discover the existence of the Fidelity 

account.”); United States v. Huy Chi Luong, 468 F. App’x 710, 712 (9th Cir. 2012) (“A 

rational jury could also conclude that Luong intended to conceal the source, ownership, or 

control of the $5,000 he paid toward the mortgage of a piece of real property.”).

Second, each of the transactions in Counts 53-62 involved transfers from Website 

Technologies to Cereus Properties. Doc. 230 at 56-57. Brunst set-up Website 

Technologies, a “shell company” with a “very generic sounding” name that “we could open 

bank accounts with.” 9/21/23 p.m. Tr. at 89:8-10. Brunst and his co-defendants created 

Website Technologies to conceal Backpage’s revenue in bank accounts held by a 

differently named entity. (Trial Ex. 1481, annual revenue for years 2015-18.) 

 After the Backpage revenue flowed through Website Technologies it then was 

moved to Cereus Properties. Trial Ex. 1479 at 1-10. Defendants Lacey, Brunst, and Spear 

(along with Jim Larkin) owned Cereus Properties. 9/21/23 p.m. Tr. at 90:23-25. The source 

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of the money that flowed from Website Technologies to Cereus Properties was the 

prostitution ads posted on Backpage. 9/21/23 p.m. Tr. at 91:16-17. 

Backpage revenue that flowed from Website Technologies to Cereus Properties is 

sufficient to demonstrate a design “to conceal, in part, the nature, the location, the source, 

the ownership, or the control of the proceeds.” Wilkes, 662 F.3d at 545. Indeed, the Ninth 

Circuit has affirmed convictions with less compelling evidence. Twitchell, 69 F. App’x at 

894 (“A reasonable jury could have found that the deposits of proceeds from the bank fraud 

into brokerage accounts were made to disguise or conceal the proceeds.”); Sun, 673 F. 

App’x at 733 (affirming a money laundering conviction where “[v]iewing the evidence in 

the light most favorable to the prosecution, a rational jury could find that Sun deposited the 

illegal cash proceeds from his medical practice into his personal bank account, rather than 

his business account, with the purpose “to conceal or disguise the nature [or] . . . the source” 

of the proceeds.”). Brunst’s convictions for concealment money laundering should stand. 

B. Jury Appropriately Found Brunst Guilty of Promotional Money 

Laundering (Counts 64-68) 

A rational juror, viewing the evidence in the light most favorable to the United 

States, could find that Brunst promoted Travel Act violations through each of these five 

transactions. Brunst relies on an out-of-circuit case to argue that promotional money 

laundering is aimed “only at transactions which funnel ill-gotten gains directly back into 

the criminal venture.” Supp. at 11 (citing United States v. Brown, 553 F.3d 768, 786 (5th 

Cir. 2008). That’s wrong. Under controlling Ninth Circuit law, promotional money 

laundering does not require “plowing back” gains into the criminal enterprise. United 

States v. Montoya, 945 F.2d 1068, 1076 (9th Cir. 1991); Manarite, 44 F.3d at 1416. 

 In Montoya, the Ninth Circuit concluded that depositing a single check arising from 

a bribery transaction was sufficient to sustain a promotional money laundering conviction. 

945 F.2d at 1076. The defendant’s money laundering conviction arose from depositing a 

$3,000 check from a fictitious FBI front company, proceeds derived from a bribe, to his 

personal checking account. Id. The defendant argued that the deposit was not intended to 

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promote the carrying on of specified unlawful activity because “there was no ongoing

criminal venture” and “the activity had been completed upon receipt of the check from the 

undercover FBI Agent.” Id. The Montoya Court rejected this argument, finding that the 

defendant “could not have made use of the funds without depositing the check.” Id. As a 

result, it found that there was “sufficient evidence from which the jury could find beyond 

a reasonable doubt that the deposit of the check amounts to an ‘intent to promote the 

carrying on of’ the specified unlawful activity, in this case the bribery, within the meaning 

of section 1956(a)(1)(A)(i).” Id. 

Manarite, a case cited approvingly by Brunst, further developed Montoya’s holding. 

The Manarite defendants were prosecuted for a casino-chip cashing scheme and argued 

that “intent ‘to promote the carrying on’ of the illegal activity can only be found when the 

proceeds are ‘plowed back’ into the activity.” 44 F.3d at 1410, 1416 (emphasis in original). 

They argued that because “none of the cash was plowed back into the . . . scheme” and they 

instead “simply distributed the cash, pocketing their share,” they did not promote the 

carrying on of illegal activity. Id. The court rejected this view, noting that the “chipskimming scheme could not benefit its participants unless the chips were cashed. A rational 

jury could conclude that the Manarites cashed the chips with the intent to promote the chipskimming scheme. ‘Plowing back’ of the gains into the enterprise is not necessary.” Id. 

These two cases have been invoked in many Ninth Circuit decisions that stand for 

the proposition that criminal proceeds need not be “plowed back” into the illegal activity 

to constitute promotional money laundering. See, e.g., United States v. Barragan, 263 F.3d 

919, 923 (9th Cir. 2001) (“We have explicitly rejected the view ‘that intent ‘to promote 

the carrying on’ of the illegal activity can only be found when the proceeds are ‘plowed 

back’ into the activity.’ Rather, we have consistently held that a jury may infer intent to 

promote the illegal activity from evidence that illicit proceeds have been transferred.”); 

Twitchell, 69 F. App’x at 894 (“[Defendant’s] actions in removing funds from the bank he 

defrauded to a separate brokerage firm clearly promoted and furthered the underlying bank 

fraud.”); United States v. Baker, 63 F.3d 1478, 1494 (9th Cir. 1995) (“The government 

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presented abundant evidence of payments Baker made to the Clinkenbeards for the 

purchase of contraband cigarettes. Baker could not have continued the illegal trafficking 

without paying his cigarette suppliers.”).

The evidence at trial comfortably clears the elements for finding Brunst guilty of 

promotional money laundering. First, former federal agent Quoc Thai testified that Cereus 

Properties was a “payroll company” that primarily paid Lacey, Larkin, Brunst, and Spear, 

but also other Backpage employees. 10/13/23 a.m. Tr. at 136:14-20; 137:11-15. Sending 

money derived from the criminal activity, i.e., promotion of business enterprises involving 

prostitution offenses, to pay Backpage employees qualifies as promotion under the statute. 

Second, even without former agent Thai’s testimony about Defendants using Cereus 

Properties to help pay Backpage employees, the jury could have “infer[ed] intent to 

promote the illegal activity from evidence that illicit proceeds have been transferred.” 

Barragan, 263 F.3d at 923. The evidence is clear that money flowing to Cereus Properties 

was used to transfer Backpage funds to Defendants Lacey, Brunst, and Spear. 9/21/23 p.m. 

Tr. at 90:23-25; 91:16-17. Thai testified that after money was transferred to Cereus 

Properties it would be sent to Lacey, Brunst, Spear, and Larkin “almost immediately.” 

10/13/23 a.m. Tr. 136:24-137:10. Under the rule in Montoya and Manarite that evidence 

is sufficient to support Defendants’ convictions for promotional money laundering. 

C. Evidence Supports Brunst’s Convictions for Transactional Money 

Laundering

For the reasons stated above, there is ample evidence proving that the money Brunst 

transferred in Counts 69-70, 78-84, and 86-93 was all derived from Travel Act violations. 

Further, with respect to the money sent by Camarillo Holdings and Cereus Properties; 

Brunst served as the CFO for both entities. 10/13/23 a.m. Tr. at 136:21-23; 153:13-23. 

Brunst was also a signatory on the Cereus Properties’ bank account (‘6211) that was 

involved in most of the transactions at issue in the money laundering counts. 10/17/23 a.m. 

Tr. at 20; Trial. Ex. 1479. A bank account signatory can “make payments on the account,” 

“initiate wires,” and “transfer money.” 10/17/23 a.m. Tr. at 20-21. Accordingly, Lacey

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would not have received the criminal proceeds in Counts 69-70 and 83-84 without Brunst 

sending him the money. Viewing the evidence in the light most favorable to the United 

States, a rational juror could have found Brunst guilty of these four charges.

D. Brunst’s Rule 29 Motion Fails for Count 52

The jury found Brunst guilty of every single money laundering count alleged against 

him. Doc. 1978. The facts, as discussed above and during the United States’ oral argument 

at the Rule 29 motion, show how a rational juror could find Brunst guilty. For example, 

Brunst orchestrated the creation of Website Technologies, a “shell company” that existed 

for the sole purpose of permitting Backpage revenue to continue to flow. Without Brunst, 

Defendants could not have continued to reap the benefits of their criminal scheme. Under 

the liberal Jackson/Nevils standard, Brunst’s motion fails.

III. The Court’s Allen Instruction Was Appropriate

The Court’s reading of the Allen instruction was permissible and appropriate, and 

the Court should deny Brunst’s request to interview or serve targeted interrogatories on the 

jurors. Supp. at 17. Brunst’s argument is misleading. Supp. at 17. What Brunst omits from 

his discussion is the fact that an Allen instruction may become coercive, “if the judge knew 

which jurors were the holdouts and each holdout juror knew that the judge knew he was a 

holdout.” United States v. Williams, 547 F.3d 1187, 1205 (9th Cir. 2008) (citing United 

States v. Sae-Chua, 725 F.2d 530, 532 (9th Cir. 1984)). That wasn’t the case here. 

Assuming there were holdouts, neither the Court nor counsel knew who they were. 

Communications with the jurors after the fact won’t change what the Court knew about the 

jurors’ identities and respective positions at the time, which is the critical point addressed 

in Williams.

CONCLUSION

Defendant Brunst’s Rule 29 motion should be denied.

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Respectfully submitted this 22nd day of December, 2023.

 GARY M. RESTAINO United States Attorney District of Arizona

 NICOLE M. ARGENTIERI

Acting Assistant Attorney General Criminal Division, U.S. Department of Justice 

s/Andrew C. Stone 

KEVIN M. RAPP

MARGARET PERLMETER

PETER KOZINETS

ANDREW STONE

DANIEL BOYLE

 Assistant U.S. Attorneys 

 AUSTIN M. BERRY

Trial Attorney 

CERTIFICATE OF SERVICE

I hereby certify that on December 22, 2023, I electronically transmitted the attached 

document to the Clerk’s Office using the CM/ECF System for filing and transmittal of a 

Notice of Electronic Filing to the CM/ECF registrants who have entered their appearance 

as counsel of record.

s/ Daniel Parke

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