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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 

KENNETH POLITE 

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 

DEFENDANTS’ MOTION IN LIMINE 

TO PRECLUDE EVIDENCE RE 

MERSEY AND ELMS 

(Doc. 1593)

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The Court should deny Defendants’ motion to preclude evidence relating to

unindicted co-conspirators David Elms and William “Dollar Bill” Mersey, including 

statements made by them. Elms and Mersey affirmatively furthered the charged 

conspiracy—which lasted from 2004 through April 2018—and their statements are thus 

admissible pursuant to Fed. R. Evid. 801(d)(2)(E). (See Doc. 230, ¶196; Doc. 929 at 7-10.) 

Argument

1. Relevance. The court previously denied the United States’ motion to admit 

communications with Elms and Mersey, finding “the Court cannot in any way determine 

the veracity of the claim that the communications further the conspiracy without 

determining the content of the specific statements, and whether they were made in a context 

that furthered the conspiracy.” (Doc. 1162 at 3.) But here, Defendants take issue with the 

timing of the communications, arguing that “evidence disconnected from those ‘fifty 

distinct occasions’ [on which Defendants published the ads described in the SI’s Counts 2-

51] is relevant neither to the Travel Act counts, nor can it be admitted under the coconspirator hearsay exception.” (Doc. 1593 at 4.) This argument has no basis in fact or law. 

(1) Doc. 946 supports a broader concept of relevance and admissibility regarding 

the counts (see, e.g., Doc. 946 at 13 (“The [SI’s] 92 detailed pages of allegations directly 

bearing on Defendants’ Travel Act violations surely place them on notice of their 

association with individuals and groups engaged in the business of prostitution.”); Doc. 

946 at 13-14 (explaining that Defendants’ publication of the 50 ads identified in Counts 2-

51 were part and parcel of “a continuous course of conduct where Defendants facilitated 

‘unlawful activity...’) 

(2) in denying Defendants’ written mistrial motion, filed after the United States’ 

opening statement, the Court rejected the same argument that (based on a single, out-ofcontext, quote from Doc. 946 at 13) all non-charged ads, all non-charged victims, and all 

other evidence not directly relating to the 50 ads are irrelevant or otherwise inadmissible. 

(See Doc. 1272 at 1-3; Doc. 1275 at 1-11; Doc. 1342 at 7 and 9; Doc. 1603; see also U. S. 

v. Fuchs, 218 F.3d 957, 961 (9th Cir. 2000) (“In order for the conspiracy to have occurred 

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during the statute of limitations period, only one overt act in furtherance of the conspiracy 

must have occurred during that period.”)

a. Backpage’s Reciprocal Link Agreement with The Erotic Review (TER). 

The SI details Backpage’s reciprocal link relationship with TER, and the critical 

role that relationship played in Backpage’s development as a source of online prostitution 

ads. (SI ¶¶45-58.) Ferrer is expected to testify that he met TER’s founder, Elms, in person 

(with Defendant Spear’s knowledge and approval) to further a profitable business 

relationship. Ferrer also had numerous email exchanges with Elms that discussed 

compensation, efforts to disguise their relationship, and how to increase referral traffic, 

among other things.1 In 2009, Elms was arrested for his involvement with an escort service

known as Desert Divas. (See Ex. A; Trial Ex. 573.) Larkin alerted Spear and Ferrer to the

story about three months after Elm’s arrest. (See Ex. A; Trial Ex. 28.)

The United States anticipates that the trial testimony will show that, although 

Defendant Padilla sent an email to Backpage staff instructing them to remove TER

references from postings in 2011, Backpage continued to publish review identification 

numbers that “Johns” could use to look-up TER reviews of prostitutes. (See Doc. 1591, Ex.

A.)2 As further evidence that Backpage continued to allow TER identifiers in Backpage’s

ads, a reporter raised the issue with Backpage in 2016. (See Ex. A, Trial Ex. 836.)

b. Backpage’s Affiliate Partnership with William “Dollar Bill” Mersey. 

The SI also details Backpage’s relationship with “super affiliate” Mersey. (SI ¶¶59-

67). Mersey received discounts and commissions on thousands of Backpage prostitution 

ads. (SI ¶¶59-67.) Larkin directed Ferrer to develop partners, including Mersey, for 

Backpage’s adult section. In a 2009 email from Mersey to Ferrer, Mersey boasts that he 

has “forwarded millions of dollars to Village Voice” in the last 10 years. (See Ex. B, Trial 

1

(See Ex. A, Trial Exs. 19, 20, 28, 558-560, 564, 564(a), 567, 567(a), 568, 570, 571, 573,

575, 575(a), 647a-e, 837, 1154, 1172, 1946, 1946a, and 1946b.)

2 Defendant Padilla concluded his email by directing staff with questions “to contact him 

or [Defendant] Joye [Vaught].” (See Doc. 1591, Ex. A.) 

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Ex. 582.) He exchanged numerous emails with Ferrer that discussed compensation, his 

placement of ads, and complaints about the removal of “his” postings.3

 The relationship 

with Mersey was terminated in 2012, but only after Backpage received a subpoena from 

the IRS.4

c. Evidence concerning Elms and Mersey is relevant to the charged 

offenses under Fed. R. Evid. 401-402. This evidence, at a minimum, shows that 

Defendants knew that their website was in the business of publishing prostitution 

solicitations. See U. S. v. Lacey, 423 F. Supp. 3d 748, 760-61 (D. Ariz. 2019) (discussing 

how these prostitution marketing strategies demonstrated Defendants’ intentional 

operation of Backpage as a prostitution-advertising website). Importantly, it shows that 

Defendants intended to facilitate their customers’ prostitution businesses by working with 

websites like TER and advertisers like Mersey. 

2. The Conspiracy Between Defendants, Elms, and Mersey. This Court has ruled 

that it requires proof that the emails furthered the conspiracy before allowing their 

admission. (Doc. 1212 at 3-5.) While it cannot rely solely on the coconspirator statements 

themselves, U. S. v. Castaneda, 16 F.3d 1504, 1507 (9th Cir. 1994), Ferrer is expected to

testify about the context and circumstances surrounding these emails. He will explain how 

Elms and Mersey were critical to prostitution marketing strategies during the early years 

of the conspiracy (2004-2012). (See also SI ¶¶9, 34, 45-67.) Last, the United States 

anticipates that the proof at trial will show that Elms and Mersey were participants in a 

“chain”-type conspiracy. (Cf. Mot. at 6 and n.2.) 

In sum, the communications were made in furtherance of the conspiracy by coconspirators who had a vested interest in the success of the conspiracy. The emails should 

be admitted under Rule 801(d)(2)(E) and Defendants’ motion should be denied. 

3

 (See Ex. B, Trial Exs. 34, 36, 39, 39(a), 41, 42, 42(a), 582, 738, 739.) 

4

 (See Ex. B; Trial Exs. 738, 739.) 

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Respectfully submitted this 15th day of June, 2023.

 GARY M. RESTAINO 

 United States Attorney 

 District of Arizona 

_s/Kevin M. Rapp_________ 

KEVIN M. RAPP 

 MARGARET PERLMETER 

 PETER KOZINETS 

 ANDREW STONE 

DANIEL BOYLE

 Assistant U.S. Attorneys 

KENNETH POLITE 

Assistant Attorney General 

Criminal Division, U.S. Department of Justice AUSTIN M. BERRY 

Trial Attorney 

CERTIFICATE OF SERVICE 

I hereby certify that on June 15, 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

Daniel Parke 

U.S. Attorney’s Office 

Case 2:18-cr-00422-DJH Document 1607 Filed 06/15/23 Page 5 of 5