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PICCARRETA DAVIS KEENAN FIDEL PC

2 East Congress Street, Suite 1000

Tucson, Arizona 85701-1782

(520) 622-6900

Michael L. Piccarreta 

State Bar No. 003962 

Email: mlp@pd-law.com

Attorney for Defendant Andrew Padilla

 -andKARP & WEISS, P.C. 

3060 N Swan Road

Tucson, AZ 85712 

(520) 325-4200 

Stephen M. Weiss

State Bar No. 002261

Email: sweiss@karpweiss.com

Attorney for Defendant Joye Vaught

IN THE UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

United States of America,

 Plaintiff,

v.

6. Andrew Padilla,

 (Counts 1-51)

7. Joye Vaught,

 (Counts 1-51)

 Defendants.

NO. CR-18-00422-06-PHX-DLR

JOINT REPLY TO RESPONSE (DOC. 476) 

TO MOTION TO DISMISS DUE TO 

GOVERNMENT INTERFERENCE WITH 

RIGHT TO COUNSEL AND REQUEST 

FOR DISCLOSURE OR, IN THE 

ALTERNATIVE, MOTION TO 

WITHDRAW (DOC. 456)

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I. BACKGROUND

In their motion to dismiss, defendants Padilla and Vaught note that Judge Logan1 made 

it clear that issues relating to the seizure of attorney trust accounts for the defendants in this 

case should be addressed in the Central District of California (see Doc. 447 p. 3), and 

defendants further noted that issues relating to the government’s unlawful seizures of 

defendants’ assets are currently pending on appeal from the Central District of California to 

the Ninth Circuit Court of Appeals. (Doc. 456 p. 9). The defendants repeated their strong belief 

that the government’s actions were unlawful and unconstitutional, but stated that they “will not 

reiterate those arguments here,” (Doc. 456 p. 9), given the fact that those matters are being 

currently litigated and await decision elsewhere. The defendants added: “However, even if, 

contrary to law and fact, the government’s seizures of attorney trust accounts were lawful, the 

government’s conduct nevertheless constitutes improper interference with Padilla’s and 

Vaught’s right to counsel of choice.” (Id.). Defendants’ motion then sets forth a number of 

grounds showing that the government’s improper interference with funds earmarked for 

indemnification and advancement of legal costs and fees denied them their right to counsel of 

choice under the Fifth and Sixth Amendments to the United States Constitution. (Doc. 456 pp. 

9-16). In its response, the government addresses none of these grounds for dismissal, injects 

many factual and legal matters beyond the scope of defendants’ motion, and re-argues the 

seizure issues while ignoring the actual arguments in defendants’ motion.

II. ARGUMENT

A. The Government’s Interference With Assets Earmarked To Fund The Defense 

Of The Present Case Has Denied Defendants Their Right To Assistance Of 

 1 Judge Logan recused himself from this case and related cases on March 1, 2019. (Doc. 485).

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Counsel Of Choice In Violation Of The Fifth And Sixth Amendments To The 

United States Constitution.

Defendants Padilla and Vaught have requested this Court to dismiss the indictment 

against them due to the government’s violation of their Fifth Amendment right to due process 

and Sixth Amendment right to counsel of choice, based on the principles set forth in United 

States v. Stein, 435 F.Supp.2d 330 (S.D.N.Y. 2006), aff’d 541 F.3d 130 (2d Cir. 2008), and 

this Court’s supervisory powers. Defendants submit that the government’s actions in the 

present case constitute the same type of improper interference with assets earmarked to fund 

counsel of choice that led the court to dismiss the indictment in Stein.

The government contends that Stein is inapposite because there was no question that 

the funds of the accounting firm, KPMG, were “untainted.” (Doc. 476 p. 9). The government’s 

response ignores several key factors. First, the government has never established that the funds 

at issue in this case are “tainted” as it is obligated to do. Thus, assets earmarked for funding 

counsel of choice must be made available to fund the defense. Second, Stein involved both 

tainted and untainted assets of the accounting firm, KPMG, inasmuch as “KPMG admitted 

extensive wrongdoing, paid a $456 million fine, and committed itself to cooperation in any 

future government investigation or prosecution.” 541 F.3d at 139. It is not likely that the 

distinguished trial judge, Judge Lewis Kaplan, would have permitted the government to 

achieve the same result of denying the defendants their right to counsel of choice simply by 

alleging that KPMG’s “extensive wrongdoing” tainted all of KPMG’s assets.

In fact, Stein is precisely on point in its analysis of the effect of the government’s 

conduct in denying the defendants’ constitutional right to counsel of choice. As in the present 

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case, the defendants, by virtue of their employment with Backpage.com (“Backpage”), were 

entitled to use the assets earmarked for defense of the case.2 The government’s conduct 

regarding these assets “unjustifiably interfered with [the defendants’] relationship with counsel 

and their ability to mount the best defense they could muster.” Id. at 155.

The court’s analysis of the impact of the government’s interference with the 

defendants’ right to counsel is directly on point in the present case:

Defendants were indicted based on a fairly novel theory of criminal liability; 

they faced substantial penalties; the relevant facts are scattered throughout over 

22 million documents regarding the doings of scores of people...; the subject 

matter is “extremely complex”...; technical expertise is needed to figure out 

and explain what happened.... As Judge Kaplan found, these defendants “have 

been forced to limit their defenses...for economic reasons and...they would not 

have been so constrained if KPMG paid their expenses”.... We therefore hold 

that these defendants were also deprived of their right to counsel under the Sixth 

Amendment.

Id. at 157 (quoting district court).

In the instant case, defendants face a novel theory of criminal prosecution -- indeed, 

unprecedented and contrary to nine different courts that have addressed Backpage and its status 

of publisher. Defendants face substantial penalties given the government’s larding up dozens 

of alleged misdemeanor prostitution acts into federal five-year statutes by coupling them with 

the Travel Act. The relevant facts are scattered through tens of millions of pages of documents, 

most of which have not even been produced by the government despite a scheduling order that 

called for their production by December 3, 2018. The subject matter is extremely complex, 

 2 “Because defendants reasonably expected to receive legal fees from KPMG, the fees ‘were, 

in every material sense, their property.’” 541 F.3d at 151 (quoting district court).

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involving what rivals a law school exam question designed to see how many issues can be 

implicated -- First Amendment, Fourth Amendment, Fifth Amendment, Sixth Amendment, in 

addition to the potential need for expert assistance in areas of internet postings, publishing, 

electronic document tracing, age determination, and sex trafficking in order to address what 

happened and the government’s intended issues. And defendants already “have been forced to 

limit” their defense preparation “for economic reasons.” For example, due to expense, the 

defendants have been unable to hire a vendor needed to image, rectify, sort, organize, code, 

and search the in excess of ten million documents produced by the government thus far. And

they “would not [be] so constrained” if they had the funds promised to them to defend the 

allegations. It is as though Judge Kaplan were writing his opinion in our case. Because 

defendants Padilla and Vaught have also been denied access to assets earmarked to fund their 

counsel of choice, the indictment against them must also be dismissed.

Here, the law is clear that the government cannot by fiat declare the proceeds from 

Backpage are “tainted” any more than it can presume all adult advertising is illegal and 

unprotected by the First Amendment. However, even if -- as the government has asserted --

this case is no different from any run-of-the-mill prosecution that does not involve 

constitutionally-protected interests, the government has engaged in improper actions in the 

present case that simply are not present in any of the cases upon which the government relies. 

The government’s response does not address these arguments or attempt to defend the 

government’s conduct.

1. Permitting Cooperating Defendants To Keep Funds Earmarked For 

Attorneys’ Fees While Denying Those Funds To Defendants Who Are 

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Contesting The Charges Is Unseemly And Undermines The Workings Of 

The Adversary System.

The government does not even attempt to defend its conduct in allowing cooperating 

defendants to use allegedly “tainted” money to fund their defense, while denying funds from 

the very same source to those who will make it harder for the government to win its case 

through vigorous representation and assertion of the defendants’ rights, except to contend, in 

a footnote, that the government is permitted to provide benefits in exchange for cooperation. 

(Doc. 476 p. 16 n. 23).

The problem in this case is the government’s disparate treatment of defendants in an 

ongoing criminal prosecution. The defendants who have the temerity to assert their innocence 

and vigorously assert their rights are suddenly deprived of the assets necessary to continue to 

fund counsel of choice and thereby deprived of counsel. On the other hand, the defendants 

who curry favor with the government, give up their rights, and cooperate with the government 

can continue to utilize assets derived from the same allegedly “tainted” source in their 

attorneys’ trust fund accounts and continue to be represented by their counsel of choice. The 

result is to clearly undermine the contemplated workings of the adversary system and is 

precisely the type of “ends justify the means” conduct that has been rightly condemned. United 

States v. Helmandollar, 852 F.2d 498, 501 (9th Cir. 1988).

In short, if the government believes it can use “tainted” funds to further the 

government’s interest in securing cooperation from a co-defendant, then the government can 

surely use the same funds to further “the government’s interest that every defendant receives 

the best possible representation he or she can obtain.” Stein, 541 F.3d at 157. The fact that the 

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government has not done so here shows its true motivation and improper interference with 

right to counsel of choice.

2. The Timing Of The Government’s Seizure Of Attorney Trust Funds To 

Severely Disrupt Criminal Proceedings After Defendants Exercise Their 

Protected Constitutional And Statutory Rights Also Warrants Dismissal 

Of The Indictment.

The government’s response makes no effort to justify its conduct in seizing attorney 

trust accounts some 18 months after undersigned counsel began representing Mr. Padilla and 

seven months after Mr. Weiss began representing Ms. Vaught at the time of the initial 

indictment. It was only after months of vigorous litigation in the case and approximately two 

weeks after receiving rulings on litigated pretrial motions,3 that the government obtained its 

attorney trust account ex parte seizure warrants for defendants Padilla and Vaught. Again, this 

highly unusual and selective use of mid-case seizure of attorney trust accounts has not occurred 

in any of the cases the government attempts to rely upon. This is a seemingly intentional 

strategy which has severely impaired the ability of Padilla and Vaught to defend this case.

The government’s actions have completely disrupted the defense, creating uncertainty 

and limiting the ability for undersigned counsel to proceed in complex and time-consuming 

criminal litigation. This type of seizure of attorney trust accounts in the middle of highly 

disputed criminal litigation, with critical First Amendment implications, has not occurred 

previously in this district in undersigned counsel’s experience. This is especially troubling and 

there has not been a contested adversary hearing demonstrating that any of the publishing 

 3 These included adverse rulings on the government’s motion to disqualify counsel and violate 

attorney-client privileges. (Docs. 338, 345).

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assets are tainted. This case does not involve per se contraband,4 but rather legitimately earned 

publishing proceeds of a business that had been operating openly for years collecting revenue 

and paying its bills. Again, the government’s actions are undermining the workings of the 

adversary system.

The government’s conduct must be viewed in light of its pattern to deprive defendants

of their Sixth Amendment rights. The government sought ex parte seizure warrants outside of 

this district thus necessitating the expenditure of additional resources outside of this 

jurisdiction. The government adopted a course of conduct seeking to avoid judicial review of 

its actions. The government unsuccessfully attempted to conflict out First Amendment counsel 

of choice, which also took considerable time and resources to resolve. The government 

provided disclosure in a manner that is useless to the defendants without expensive technical 

assistance. After discussions with counsel for the defendants, the government elected not to 

seize trust accounts which contain the funds to defend the case. However, after defendants 

asserted their constitutional rights, the government changed course and seized the trust 

accounts of First Amendment counsel in yet another unsuccessful attempt to remove them 

from the case. Counsel for Padilla and Vaught vigorously asserted their clients’ rights and the 

government responded, in part, by seizing their attorneys’ trust accounts. The government then 

asserts that, even without the benefit of a valid seizure warrant, any attorneys accessing funds 

in the trust accounts may be investigated with no assurances that they will not be criminally 

 4 See Luis v. United States, 578 U.S. __, __, 136 S.Ct. 1083, 1090 (2016) (describing 

contraband subject to seizure as “a robber’s loot, a drug seller’s cocaine, a burglar’s tools, or 

other property associated with the planning, implementing or concealing of a crime”).

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prosecuted. As a result, counsel for Padilla and Vaught have not received any compensation 

for any services rendered after November 30, 2018, over three months ago. These actions 

cannot be viewed in a vacuum, but as an overall pattern which has significantly and adversely 

impacted defendants’ due process and Sixth Amendment rights, severely undermining the 

workings of the criminal adversary system.

The government’s response does not even attempt to excuse or justify the timing of 

these seizures of attorney trust accounts. Defendants submit that the chronology speaks for 

itself and demonstrates the government’s improper purpose in severely disrupting these 

criminal proceedings mid-stream, after the defendants have vigorously asserted their rights. 

See United States v. DeMarco, 550 F.2d 1224, 1227-28 (9th Cir. 1977).

3. Monsanto.

Finally, the government’s repeated emphasis on United States v. Monsanto, 491 U.S. 

600 (1989) is misplaced. As the defendants have repeatedly pointed out, Monsanto comes into 

play only after a lawful seizure of assets that could be used to fund counsel of choice, and that 

matter, as noted, has yet to be determined. Second, the government’s seemingly generous offer 

to counsel for Padilla and Vaught is not at all what it seems. The government states that it 

“specifically invited [counsel for Padilla and Vaught] to submit financial records evidencing 

financial need, and the Government would consider releasing attorneys’ fees, without 

requiring them to request a formal Monsanto hearing from this Court.” (Doc. 476 p. 17 n. 24). 

When counsel for Mr. Padilla pursued the government’s apparent offer to “consider releasing 

attorneys’ fees,” counsel learned that the government was actually stating only that “CJA panel 

funds” may be available “to supplement attorney fees.” (See email correspondence between 

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counsel for Mr. Padilla and counsel for the government, January 23, 2019, attached hereto as 

Exhibit 1). 

In other words, the government simply referred counsel to the “overworked and 

underpaid public defenders” that the Supreme Court found to be no substitute for a defendant’s 

retained counsel of choice. Luis v. United States, 578 U.S. __, __, 136 S.Ct. 1083, 1095 (2016). 

Indeed, Luisrecognized “a substantial risk that accepting the Government’s views would -- by 

increasing the government-paid-defender workload -- render less effective the basic right the 

Sixth Amendment seeks to protect.” Id. This, of course, would also directly contravene “the 

government’s interest that every defendant receives the best possible representation he or she 

can obtain.” Stein, 541 F.3d at 157. Thus, in addition to the fact that Monsanto is the improper 

vehicle for addressing access to funds for counsel of choice in this case, the government’s 

representations about relief under Monsanto ring particularly hollow.5

In any event, prior to any Monsanto hearing, the government would be required to 

identify the specific ads that it claims were for prostitution, identify the proceeds from those 

specific ads, and then trace those specific proceeds to the assets it has seized, none of which 

the government has done to date.

B. Defendants Are Entitled To Disclosure Of All Communications Relating To The 

Government’s Belated Decision To Seize Attorney Trust Accounts And 

 5 Indeed, Justice Kagan’s dissent in Luis, 136 S.Ct. at 1112, indicates that the controversial 5-

4 Monsanto decision permitting pretrial seizure of attorneys’ fees was incorrectly decided and 

is ripe for reconsideration. See also Sixth Amendment – Right to Counsel – Scope of Pretrial 

Asset Freezes -- Luis v. United States, 130 Harv.L.Rev. 357, 365 n. 76 (2016) (“interpreting 

Justice Kagan’s opinion as ‘openly invit[ing] future petitioners to make broader arguments and 

to challenge all pretrial orders freezing assets needed to retain counsel,’” citation omitted).

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Disclosure Of Any Other Cases In The District Of Arizona Where There Have 

Been Post-Indictment Pretrial Seizures Of Defendants’ Attorneys’ Fees.

The government’s response does not address or oppose defendants’ request for 

disclosure of communications surrounding the seizures of publishing assets and attorneys’ fees 

post-indictment and pre-trial. (Doc. 456 pp. 16-17). Because the government does not oppose 

this request, the government should be ordered to turn over these communications to the 

defendants. At a minimum, these communications should be produced and reviewed by the 

Court in camera and any records not disclosed kept under seal for potential appellate review.

C. The Government Response Misstates The Law Regarding Protected First 

Amendment Activities.

Although the motion did not address the First Amendment issues underlying this case, 

the government devotes five pages of its response to a discussion of these issues in an effort to 

justify its actions, primarily those involving the seizure of assets and proceeds attributable to 

Backpage. (Doc. 476 pp. 9-14). This puts the cart before the horse, with the government merely 

assuming the truth of its allegations that all postings on Backpage related to illegal activity, that 

the defendants are culpable for third-party speech, and that the government’s asset seizures are 

entirely legitimate. By trying to divert the Court’s attention from the arguments actually made 

in the motion and in an effort to reframe the question, the government is asking this Court to 

get out in front of the Ninth Circuit, which currently is considering the constitutional validity 

of the pretrial seizure of publishing proceeds. See In the Matter of Seizure of: Any and all funds 

held in Republic Bank of Arizona Accounts xxxx1889, xxxx2592, xxxx1938, xxxx2912, and 

xxxx2500, No. 18-56455, Doc. No. 27 (9th Cir.), (setting case for expedited briefing and 

argument). See also Appellant’s Opening Brief (“AOB”), attached as Exhibit 2. The 

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government’s response also appears to anticipate a motion not yet filed or briefed -- that the 

Superseding Indictment is patently defective because it fails to allege under proper standards 

of mens rea any criminal activity by the defendants for actions and speech of third parties.

In any event, the government’s arguments on this point expose a frail understanding of 

the law that underlies both this misguided prosecution and the government’s abusive tactics. It 

fundamentally distorts the issues by asserting the defendants are claiming First Amendment 

rights “to commit or facilitate criminal activity” and to receive “proceeds of a crime.” (Doc. 

476 pp. 10, 13). Both propositions fundamentally misstate the constitutional issues in this case, 

and are irrelevant to the motion, which is focused on the government’s efforts to hobble the 

defense in violation of defendants’ Sixth Amendment rights. However, the government’s 

discussion of these issues is addressed below so that it does not mislead the Court with halfbaked notions of how the First Amendment works.

1. The Government Misleadingly Conflates The Speaker With The 

Advertising Platform.

The government’s statement that the First Amendment does not protect “speech 

proposing an illegal transaction,” (Doc. 476 p. 10), ignores the fact that Backpage was not the 

“advertiser,” but instead provided a platform for ads posted by others. Backpage.com, LLC v. 

Cooper, 939 F.Supp.2d 805, 830 (M.D.Tenn. 2013) (“[T]he statute at issue here does not 

criminalize prostitution—it criminalizes the sale or potential sale of advertisements”). 

“Providing a forum for online publishing is a recognized legal purpose.” People v. Ferrer, No. 

16FE024013 (Sup. Ct. Sacramento Cty. Aug. 23, 2017) (“Ferrer II”), slip op. at 13. See also 

Backpage.com, LLC v. Dart, 807 F.3d 229, 230-31 (7th Cir. 2015) (specifically recognizing 

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Backpage as “an avenue of expression of ideas and opinions” protected by the First 

Amendment, including its “classified ads for ‘adult’ services”).6

The question of what legal standards apply when the government seeks to hold a 

publisher criminally liable for speech posted by third parties is addressed more fully below, 

but the government’s reliance on Pittsburgh Press Co. v. Pittsburgh Comm’n on Human

Rights, 413 U.S. 376 (1973) is misplaced. (Doc. 476 p. 10). As with the rest of the 

government’s argument, it begins with the assumption that all ads on Backpage proposed 

illegal transactions and that the defendants knew about particular ads in advance and intended 

to promote illegal transactions. But the Ninth Circuit had held that Pittsburgh Press cannot be 

read to presume that only illegal speech is involved where the government targets commercial 

speakers. Valle Del Sol Inc. v. Whiting, 709 F.3d 808, 822 (9th Cir. 2013) (“Nothing in 

Pittsburgh Press...suggests that we should expand our inquiry beyond whether the affected 

speech proposes a lawful transaction to whether the affected speech is conducted in a lawful 

manner”). Pittsburgh Pressinvolved a newspaper advertising category that on its face violated 

a municipal anti-discrimination ordinance. It would apply to this case only if Backpage had 

maintained a “prostitution” category and accepted ads that had explicit money-for-sex offers, 

which was never the case. Instead, the government merely presumes all ads in the adult 

categories were for prostitution and that it may impute the undisclosed intentions of the 

 6 See also Order, January 17, 2013, pp. 19-20, In re Grand Jury Subpoenas, Case No. GJ12-

172RAJ (W.D.Wash.), submitted as Exhibit 4 hereto under seal.

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advertisers to the defendants who ran the platform. There is no authority to support this 

proposition, and many cases conclude the opposite.7

Contrary to the government’s reading of Pittsburgh Press, courts have held that the 

First Amendment bars the government from criminalizing Internet advertising based on the 

assumption that some of the ads may propose illegal transactions. As a consequence, courts 

invalidated criminal laws targeting Backpage in Washington, Tennessee, and New Jersey, 

affirming that constitutional protection extended to Backpage’s role as a platform for speech. 

Backpage.com, LLC v. McKenna, 881 F.Supp.2d 1262, 1281-82 (W.D.Wash. 2012); Cooper, 

939 F.Supp.2d at 833; Backpage.com, LLC v. Hoffman, 2013 WL 4502097 *9 (D.N.J. Aug. 

20, 2013).

The government’s citation of United States v. Ulbricht, 31 F.Supp.3d 540 (S.D.N.Y. 

2014), United States v. Omuro, No. 14-CR-336-WHO (N.D.Cal.), and United States v. 

Hurant, No. CR 16-45 (E.D.N.Y.) for the proposition that a website operator “may be 

prosecuted under federal law for knowingly facilitating prostitution” hardly proves its point. 

(Doc. 476 p. 10). This is just an example of a credulous prosecutor who is convinced by his 

 7 Also, Pittsburgh Press predates both the commercial speech doctrine and the Internet, and 

subsequent decisions illustrate the shallowness of the government’s analysis. Two years after 

Pittsburgh Press, the Supreme Court held the First Amendment protected a publisher in 

Virginia that ran an advertisement for an abortion clinic in New York even though abortions 

were illegal in Virginia at that time. Bigelow v. Virginia, 421 U.S. 809 (1975). The Court held 

that if the publisher were held responsible for the potentially illegal conduct, “[t]he burdens 

thereby imposed on publications would impair, perhaps severely, their proper functioning.” Id. 

at 829.

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own pleadings and press releases, as none of those cases resulted in rulings relevant to the First 

Amendment issues here.

Two of the government’s citations are to nothing more than plea agreements,8 and the 

third actually undermines the government’s position in this case. In Ulbricht, the court denied 

a motion to dismiss an indictment against Ross Ulbricht, the creator of Silk Road, for 

participating in conspiracies for narcotics trafficking, computer hacking and other crimes. 31 

F.Supp.3d at 546. The case concerned the purchase and sale of “thousands of kilograms of 

heroin and cocaine” and “malicious software designed for computer hacking.” Id. at 549-50. 

According to the government’s Complaint, the defendant “pursued violent means, including 

the murder-for-hire of several individuals he believed posed a threat to [his] enterprise.” Id. at 

550. The court specifically noted that the indictment did not allege Ulbricht was criminally 

liable for launching a website that others misused for illicit transactions, because “[i]f that were 

ultimately the case, he would lack the mens rea for criminal liability.” Id. at 556 (emphasis 

 8 In Omuro, No. 14-CR-336-WHO (N.D.Cal.), for example, the defendants pled guilty to 

charges of promoting prostitution for their own speech that included reviews of prostitutes and 

providing advice on avoiding law enforcement stings. See Gov’t Sentencing Mem. at 4, 

Supporting Declaration ¶ 3 (Dkt. 70, 70-1). No First Amendment issue was raised or decided. 

United States v. Hurant, No. CR 16-45 (E.D.N.Y.) also involved a plea agreement in which 

the defendant pled guilty to structuring a website with categories for users to list what sex acts 

they were willing to perform. Again, no First Amendment defense was raised and no ruling 

issued.

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added).9 The fact is, the government can cite no decisions to support its novel vicarious liability 

theory seeking to hold Backpage liable for third-party content.10

2. The Government Erroneously Conflates Allegations With Judicial 

Findings.

The government’s claim that this case raises no First Amendment issues (based on 

allegations that Backpage hosted only speech relating to unlawful activities) is wrong for 

multiple reasons, not the least of which is that it assumes what the government has the burden 

to prove. While certain narrowly-framed and specifically-defined categories of speech are 

considered outside the First Amendment’s protection, United States v. Sineneng-Smith, 910 

F.3d 461, 470 (9th Cir. 2018), speech is presumed to be protected and must be treated as such 

but until the government has proved its case. Ashcroft v. ACLU, 535 U.S. 564, 573 (2002). The 

burden of proof is on the government and these limits are strictly enforced.11 “The government 

 9 Unlike Backpage: the Silk Road website had categories that, on their face, invited ads for 

unlawful activity (e.g., categories for the sale of “cannabis” and “opioids”); users posted 

thousands of ads that, on their face, proposed unlawful transactions (e.g., the sale of “HIGH 

QUALITY #4 HEROIN ALL ROCK” and “5gr UNCUT Crystal Cocaine!!”), with such ads 

being immediately and prominently visible on the site’s homepage; Silk Road did not sell 

classified ads for a small fee, but rather collected a commission of 8% to 15% from every sale; 

and Silk road was involved in each sale by escrowing payments pending the completion of 

each transaction. United States v. Ulbricht, 13-mj-02328 (S.D.N.Y.), Sealed Complaint, Dkt. 

1 (attached as Exhibit 3).

10 Indeed, in previous proceedings in this district before Judge Campbell (that the government 

had unsealed, Doc. 197 p. 11 n. 3), the government conceded that these “cases where website 

operators have been recently criminally prosecuted successfully...aren’t on all fours....” TR, 

February 22, 2017, p. 10.

11 This is true for every category of “unprotected” speech. E.g., New York Times Co. v. 

Sullivan, 376 U.S. 254, 279-80 (1964) (public officials must prove falsity of speech and actual 

malice to recover damages for defamation); Miller v. California, 413 U.S. 15, 23-25 (1973) 

(government must show that work, taken as a whole, meets three-part test to be considered 

obscene); Brandenburg v. Ohio, 395 U.S. 444, 447-49 (1969) (government must prove that 

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may not suppress lawful speech as a means to suppress unlawful speech. Protected speech 

does not become unprotected merely because it resembles the latter. The Constitution requires 

the reverse.” Ashcroft v. Free Speech Coalition, 535 U.S. 234, 255 (2002).12 The government’s 

assumption that adult oriented ads can be equated with or assumed to be ads for illegal 

transactions also betrays a profound ignorance of First Amendment principles.

Of particular relevance here, the First Amendment prohibits the government from 

declaring that online classified ads for adult services or escorts are unprotected simply because 

a government investigator (or a prosecutor) believes they “look like” ads for illegal 

prostitution.13 Backpage.com, LLC v. Dart, 807 F.3d 229, 234 (7th Cir. 2015). Yet that is the 

mistaken premise of the government’s case, despite the fact that every court to address this 

question has held that it cannot presume such ads are unprotected.14 The government tries to 

 

speaker intended to provoke commission of crime and that speech was likely to produce 

imminent crime to be considered incitement).

12 See United States v. Playboy Entm’t. Group, Inc., 529 U.S. 803, 816 (2000) (“When the 

Government restricts speech, the Government bears the burden of proving the constitutionality 

of its actions.”); id. at 818 (“When First Amendment compliance is the point to be proved, the 

risk of nonpersuasion...must rest with the Government, not with the citizen.”); Bd. of Trustees 

v. State Univ. of N.J. v. Fox, 492 U.S. 469, 480 (1989) (“the State bears the burden of justifying 

its restrictions”).

13 The government doubles down on this error by also claiming that Backpage violated the law 

by publishing ads copied from “other prostitution websites” (the government does not identify 

any such sites in its response, but has identified Craigslist.org as one such website) and by 

paying a fee to advertise on The Erotic Review -- presuming in both cases that the content on 

those other websites was also unlawful.

14 See, e.g., Doe v. Backpage.com LLC, 104 F.Supp.3d 149, 156-157 (D.Mass. 2015), aff’d, 

817 F.3d 12 (1st Cir. 2016) (“The existence of an escorts section in a classified ad service, 

whatever its social merits, is not illegal”); McKenna, 881 F.Supp. at 1282 (escort ads have long 

been permitted and escort services are licensed and regulated in many states); Cooper, 939 

F.Supp. at 816, 833-34 (ads on Backpage are protected speech under the First Amendment); 

Hoffman, 2013 WL 4502097, at *9-11 (rejecting argument that escort ads on the website are 

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explain away these cases with a blanket assertion (without citation or explanation) that the 

holdings only related to state civil cases that addressed the question of statutory immunity 

under Section 230 of the Communications Decency Act. (Doc. 476 p. 11). This is wrong both 

as a matter of fact and law for several reasons:

• First, cases holding that the First Amendment prohibits equating escort or other 

adult-oriented ads with prostitution have included state criminal laws, threats of 

law enforcement action, and actual prosecutions. E.g., McKenna, 881 F.Supp. 

at 1282; Cooper, 939 F.Supp. at 816, 833-34; Hoffman, 2013 WL 4502097 at 

*9-11; Dart, 807 F.3d at 234; Ferrer II, slip op. at 13.

• Second, even where this issue was addressed in civil cases, courts were 

addressing the constitutional issue that prohibits the government (or a private 

litigant) from assuming that adult or escort ads are unprotected by the First 

Amendment. E.g., Doe v. Backpage.com LLC, 104 F.Supp.3d at 156-157; M.A. 

v. Village Voice Media Holdings, 809 F.Supp.2d at 1049-50; Dart v. Craigslist, 

Inc., 665 F.Supp.2d at 968.

• Third, this is nothing but a strawman argument --the government is responding 

to a point that was not made. The defendants cited these cases because of their 

First Amendment holdings and analysis, not because of any conclusions 

regarding Section 230.

The government also seeks to distinguish the First Amendment cases by asserting that 

“nearly all” of the case law cited was from a time before the release of the U.S. Senate’s 

Permanent Subcommittee on Investigations report on Backpage (“PSI Report”). (Doc. 476 p. 

11). Apart from the fact that a congressional report cannot trump judicial holdings based on 

constitutional principles, it overlooks the decision in Ferrer II, issued August 23, 2017 --

months after the PSI Report -- in which the court dismissed claims that defendants “conspired 

 

unprotected speech); M.A. v. Village Voice Media Holdings, LLC, 809 F.Supp.2d at 1049-50. 

See also Dart v. Craigslist, Inc., 665 F.Supp.2d at 968 (“We disagree...that the ‘adult services’ 

section is a special case. The phrase ‘adult,’ even in conjunction with ‘services,’ is not unlawful 

in itself nor does it necessarily call for unlawful content”).

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to create and organize a website that facilitates sex trafficking.” Ferrer II, slip op. 1. The court 

rejected charges based on Backpage’s alleged “editing” of ads on the site through “a 

moderation system where terms would be deleted or blocked...but the user would still be 

allowed to post [to]...and compensate” the site, holding that “such actions generally fall within 

the scope of protected editorial functions.” Id. 13-14. Although the court applied Section 230 

to dismiss the indictment, it explained that this “broad” immunity derives directly from 

Congress’ intent to protect the First Amendment rights of online publishers, to relieve them of 

liability for publishing third-party speech. Id. 11.15

Without getting into any specifics, the government claims that the PSI Reportsupports 

its conclusions, and that “incriminating Backpage documents” were produced in the report’s 

Appendix. (Doc. 476 p. 11). However, as shown in the pending Ninth Circuit appeal, the 

documents the government cites are more exculpatory than “incriminating.”16 All of this is 

beside the point in any event, because a congressional report cannot be used as a proxy for a 

judicial finding of guilt.17 Moreover, congressional “findings” can hardly establish whether a 

 15 The Ferrer II court also held that deleting terms to “sanitize” ads is not a “material 

contribution to the offensive content.” Id. 14 (“[D]elet[ing] or block[ing] words that were code 

of underage girls, but allow[ing] the ad[] to be posted for a fee” does not “constitute[] ‘material 

contribution’ to [] offensive material”). Additionally, it held Section 230 immunity could not 

be lost based on “overall course of conduct,” especially where Backpage did nothing to 

“require” offensive content, or based on allegations that the site “‘manipulated’ advertisements 

to evade law enforcement detection.” Id. 16-17. 16 See AOB, pp. 12-13, 42 n. 29. The government misrepresented the contents of the 

documents and deleted references that showed Backpage’s policy was to delete ads that 

included clear references to prostitution.

17 The government also cites the now vacated district court ruling to enforce the PSI subpoena, 

(Doc. 476 p. 11), but that case dealt only with congressional authority to conduct an 

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publishing venture is constitutionally protected, particularly where, as here, there has been no 

adversary proceeding and no judicial findings. See, e.g., Blount v. Rizzi, 400 U.S. 410, 416-22 

(1971) (burden is on the government to initiate prompt adversarial proceeding and prove 

material at issue is unprotected expression).

The question for congressional materials like the PSI Report is not whether they could 

ever be sufficient to establish guilt or determine the First Amendment status of a publisher, but 

whether they are even relevant or admissible in a judicial proceeding. Such reports are 

commonly excluded from judicial consideration, as they represent “heated conclusions of a 

politically motivated hearing.” Baker v. Firestone Tire & Rubber Co., 793 F.2d 1196, 1199 

(11th Cir. 1986). Courts generally do not consider whether such a congressional document can 

be incorporated into pleadings—they examine whether it should be considered at all, and when 

they are not trustworthy, they are rejected. E.g., Pearce v. E.F. Hutton Grp., Inc., 653 F.Supp. 

810, 813-16 (D.D.C. 1987) (“Given the obviously political nature ..., it is questionable 

whether any report by a committee or subcommittee of [Congress] could be admitted...against 

a private party”); Bright v. Firestone Tire & Rubber Co., 756 F.2d 19, 22-23 (6th Cir. 1984) 

(per curiam) (excluding House subcommittee report as inadmissible). The recent “hearings” 

relating to Justice Kavanaugh is another most recent example as to the political nature of 

congressional investigations.

 

investigation and reached no findings on the ultimate question of Backpage’s First 

Amendment status (as the government misleadingly suggests).

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The same goes for the government’s attempt to rely on Carl Ferrer’s plea agreement to 

support its assumption that it has proven its case. (Doc. 476 pp. 2-3, 13). As a matter of black 

letter law, the guilty plea or conviction of a codefendant “may not be used by the government 

and received over objection as substantive evidence of the guilt of those on trial.” U.S. v. 

Halbert, 640 F.2d 1000, 1004 (9th Cir. 1981). While the government may try to rely on 

Ferrer’s statements if there is ever an adversary hearing on the constitutional status of 

Backpage as a publishing platform, the fact that no such hearing has been held is fatal to the 

government’s First Amendment argument. E.g., Blount, 400 U.S. at 416-22. Even if such a 

hearing had been convened, the government would be unable to overcome the presumption of 

constitutional protection merely by pointing to Ferrer’s plea deal, because such statements are 

“presumptively unreliable,” “presumptively suspect,” and “less credible than ordinary 

hearsay.” Lee v. Illinois, 476 U.S. 530. 541 (1986). This is because “plea agreement[s] may 

adopt facts the government wants to hear in exchange for some benefit.” United States v. Vera, 

893 F.3d 689, 692-93 (9th Cir. 2018). Cf. Bruton v. United States, 391 U.S. 123 (1968) 

(admission of co-defendant’s confession inculpating defendant constitutes reversible error, 

despite limiting jury instruction).

3. Mens Rea

The government’s attempt to rely on plea agreements underscores another basic flaw 

both in its indictment of these defendants but also in its approach to the First Amendment issues 

raised by this prosecution -- it fails to allege the mens rea necessary to establish a criminal act. 

The government alleges the defendants knew that Backpage was used by third parties for 

purposes of prostitution, (Doc. 476 p. 12), but this hardly suffices. Doe v. GTE Corp., 347 F.3d 

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655, 659 (7th Cir. 2003) (“Even entities that know the information’s content do not become 

liable for the sponsor’s deeds. Does a newspaper that carries an advertisement for “escort 

services” or “massage parlors” aid and abet...prostitution, if it turns out that some (or many) 

of the advertisers make money from that activity? How about Verizon, which furnishes pagers 

and cell phones to drug dealers...?”); In re Aimster Copyright Litig., 334 F.3d 643, 651 (7th 

Cir. 2003) (“A retailer of slinky dresses is not guilty of aiding and abetting prostitution even if 

he knows that some of his customers are prostitutes....”); Dart v. Craigslist, 665 F.Supp.2d at 

967 (providing a platform for the speech of someone who might commit illegal acts “does not 

satisfy the ordinary understanding of culpable assistance to a wrongdoer”).

The essential premise of the indictment is that Backpage “facilitated” prostitution 

generally through its overall editorial policies, but it fails even to allege the necessary mens rea

as to any specific acts. As the government has argued in other cases, it has the obligation to 

prove not just that the defendants knew that particular ads were for prostitution, but that they 

had the specific intent to facilitate those particular acts of prostitution. In Woodhull Freedom 

Foundation v. United States, the government argued that for prosecutions under the Travel 

Act, the prosecutor must prove “not simply that the defendant was aware of a potential result 

of the criminal offense, but instead that the defendant intended to ‘explicitly further[]’ a 

specified unlawful act.” Woodhull Freedom Foundation v. United States, 334 F.Supp.3d 185, 

199-201 (D.D.C. 2018). The court agreed with the government and held that the law applies 

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only to “specific unlawful acts with respect to a particular individual, not the broad subjectmatter of prostitution.” Id.

18

This issue of mens rea goes to the heart of the government’s erroneous First 

Amendment assumptions. Not only is specific intent an essential element of a criminal 

prosecution in any Travel Act prosecution, it is particularly important where the government 

is seeking to prosecute a publisher for hosting third party speech. In this case, however, the 

government has argued that it may prosecute based on a theory of generalized knowledge. See, 

e.g., Statement of AUSA Andrew Stone, Oct. 5, 2108 Tr. 102:9-14 (“[W]hat’s at issue in this 

case [is] [d]id they know that the vast majority of these advertisements that went up on this 

Web site were for prostitution?”). See also Doc. 456, Ex 7. AUSA Kevin Rapp letter to 

Michael Piccarreta, 11/29/18, p. 3 (“Here, because of the aggregation, affiliation, and 

reciprocal link ventures and other conduct summarized above, Backpage knew that every ad 

had the potential for facilitating prostitution services, including child sex trafficking”). This 

does not come close even to alleging the necessary mens rea, particularly in this First 

Amendment context.

 18 Likewise, in Backpage.com, LLC v. Lynch, 216 F.Supp.3d 96 (D.D.C. 2106), the Justice 

Department argued that for a conviction under 18 U.S.C. § 1591, “[e]ven if an advertisement 

for illegal sex trafficking appeared on [its] website, an operator could not be convicted under 

[the law] without proving that [it] knew that the advertisement at issue related to illegal sex 

trafficking of a minor or of a victim of force, fraud, or coercion.” DOJ’s Reply in Support of 

Motion to Dismiss at 7-8, Backpage.com, LLC v. Lynch, No. 1:15-2155 (RBW), ECF No. 13 

(emphasis added). Once again, the district court accepted the government’s interpretation of 

the statute. 216 F.Supp.3d at 107.

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The government’s theory is equivalent to asserting it may assume the guilt of a 

bookstore owner under obscenity law because the store stocks adult publications. But such an 

assumption is never permissible. It is a basic proposition of First Amendment law that the 

government cannot criminally punish publishers or distributors of speech without sufficient 

proof of scienter, i.e., that a defendant knew the specific speech that is the basis for criminal 

charges was unlawful and had specific intent to violate the law. Smith v. California 361 U.S. 

147, 153-154 (1959) (striking down ordinance imposing criminal sanctions on the sale of 

obscene books without any required scienter, because absent proof that a seller had knowledge, 

“he will tend to restrict the books he sells” and the law would “impose a severe limitation on 

the public’s access to constitutionally protected matter”).19 Astonishingly, the government fails 

even to allege a single instance involving any advertisement where the standard for mens rea

would be satisfied.

4. The First Amendment And “Proceeds Of Crime.”

The government’s argument that defendants have no right to the “proceeds of crime” 

begins with the same false assumption that it may assume in advance that all of the postings 

on Backpage were for illegal transactions. Not only does this assumption lack any legal basis, 

 19 See also Mishkin v. New York 383 U.S. 502, 511 (1966) (“[t]he Constitution requires proof 

of scienter to avoid the hazard of self-censorship of constitutionally protected material and to 

compensate for the ambiguities inherent in the definition of obscenity”); United States v. XCitement Video, Inc. 513 U.S. 64, 78 (1994) (Court interpreted a federal statute prohibiting 

interstate transfer of child pornography to require that the government prove a defendant had 

knowledge of “both...the sexually explicit nature of the material and...the age of the 

performers,” because a lack of such scienter requirements “would raise serious constitutional 

doubts”).

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but the government is asking this Court to prejudge the very issue currently pending in the 

Ninth Circuit. See AOB at 28-40. Asset forth in the defendants’ brief on appeal, mere probable 

cause is insufficient to justify pretrial seizures of publishing assets or proceeds. See, e.g., Fort 

Wayne Books, Inc. v. Indiana, 489 U.S. 63 (1989); Simon & Schuster, Inc. v. Members of New 

York State Crime Victims Board, 502 U.S. 105 (1991); American Library Ass’n v. Thornburgh, 

713 F.Supp. 469, 484 n.19 (D.D.C. 1989) (“pre-trial seizure of non-expressive material 

[including printing presses, bank accounts, etc.] ex parte from a business engaged in expressive 

material also is unconstitutional”), rev’d on standing grounds sub nom. American Library 

Ass’n v. Barr, 956 F.2d 1178, 1194-96 (D.C. Cir. 1992).

The government asserts that these cases do not apply because they relate only to 

seizures of expressive materials or to assets of “an ongoing business,” and that “Backpage has 

effectively ceased operations and is no longer in the publishing business.” (Doc. 476 p. 13). 

Not only is this wrong on the law, as the cases make clear that seizing the proceeds of 

publishing is independently unconstitutional, it blunders into conceding the government has 

engaged in prior restraint by closing down the second largest classified ad website on the 

Internet. The government argues that Backpage had “already” closed down, (Doc. 476 p. 13 

n. 19),

20 but it did so only because the government seized all its assets.21 Its claim that 

 20 This assertion is belied by the first paragraph of the indictment which states that Backpage 

was “shut down by federal law enforcement authorities in April 2018....” (Doc. 230 ¶ 1).

21 Disposition of the website and related assets remains a live issue because defendants’ 

corporate entities hold a lien on all the assets of Backpage and its affiliates. The First 

Amendment issue is not moot where resumption of a closed business is possible once the cloud 

over the assets is lifted. See City of Erie v. Pap’s A.M., 529 U.S. 277, 288 (2000).

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defendants have not identified cases holding it is improper to “seize the proceeds of a business 

that constituted a criminal enterprise,” (Doc. 476 p. 13 n. 19), is false. See, e.g., Vance v. 

Universal Amusement Co., 445 U.S. 308, 315-16 (1980) (invalidating nuisance abatement law 

authorizing business closure prior to final adjudication); Spokane Arcades, Inc. v. Brockett, 

631 F.2d 135, 138-39 (9th Cir. 1980), aff’d mem., 454 U.S. 1022 (1981) (same). Once again, 

the government tries to justify its actions by assuming the very thing it must prove at trial.

III. If This Court Does Not Dismiss The Indictment Against These Defendants, 

Counsel For Defendants Request This Court To Issue Its Order Permitting Them 

To Withdraw.

The government’s conduct in seizing attorney IOLTA trust accounts has rendered 

defendants Padilla and Vaught indigent and unable to continue to fund their counsel. The 

government’s conduct is the direct cause of defendants being without funds to continue to 

retain counsel, and constitutes changed circumstances in the case necessitating counsel’s 

withdrawal. If the Court denies the present motion, undersigned counsel respectfully request 

this Court to its issue its order allowing them to withdraw from the case and appointment of 

the Federal Public Defender or experienced counsel from the Criminal Justice Act panel for 

the District Court in Phoenix.22

IV. CONCLUSION

The government has engaged in a very successful litigation strategy, the results of 

which have impacted and violated defendants’ Sixth Amendment right to counsel and Fifth 

 22 Defendants Padilla and Vaught will submit evidence of their indigency to the Court under 

seal, signed consents to withdraw as attorney of record, and applications and proposed orders 

in compliance with LRCrim 57.14 and LRCiv 83.3.

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Amendment due process of law. The strategy includes: 1) seizing company First Amendment 

proceed assets without holding an adversary hearing or tracing of the assets at the initiation of 

the case; 2) permitting defendants who would give up their constitutional rights to maintain 

company assets to pay their counsel of choice while seizing the same assets from presumedinnocent defendants who decline to resolve the case and choose to exercise their constitutional 

rights; 3) the unsuccessful filing of conflict motions to remove First Amendment counsel and 

then seizing of their trust accounts in the midst of litigation; and 4) the seizure seven months 

post-indictment of attorney trust account funds that were advanced to defendants Vaught and 

Padilla to defend this case, leaving them without the necessary funds to defend themselves. 

This is a complicated matter that requires the assistance of multiple attorneys, a legal 

assistant, and technical support to effectively defend the case. The government’s actions and 

avowal that attorneys may be investigated and risk criminal charges if advanced fees are used 

to defend the case have severely impacted the attorney-client relationship and left counsel 

unable to be paid for all work performed since December 1, 2018, unable to retain experts, and 

unable to obtain technical assistance to review the millions of documents that were provided 

in disclosure. This is not a routine forfeiture matter but a strategic series of actions by the 

government to impact the defendants’ ability to defend themselves. Accordingly, the 

indictment must be dismissed.

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RESPECTFULLY SUBMITTED this 8th day of March, 2019.

PICCARRETA DAVIS KEENAN FIDEL PC

By: /s/ Michael L. Piccarreta

Michael L. Piccarreta

Attorney for Defendant Andrew Padilla

KARP & WEISS, P.C.

By: /s/ Stephen M. Weiss

Stephen M. Weiss

Attorney for Defendant Joye Vaught

CERTIFICATE OF SERVICE

I hereby certify that on the 8th day of March, 2019, I electronically transmitted 

the foregoing to the Clerk of the Court via the CM/ECF system for filing and transmittal 

of a Notice of Electronic Filing to the following CM/ECF registrants:

Reginald Jones: Reginald.Jones@usdoj.gov

Peter S. Kozinets: Peter.Kozinets@usdoj.gov

John Kucera: John.Kucera@usdoj.gov

Margaret Perlmeter: Margaret.Perlmeter@usdoj.gov

Kevin Rapp: Kevin.Rapp@usdoj.gov

Andrew Stone: Andrew.Stone@usdoj.gov

Thomas Bienert: tbienert@bmkattorneys.com

Paul Cambria: pcambira@lglaw.com

Robert Corn-Revere: bobcornrevere@dwt.com

Bruce Feder: bfeder@federlaw.com

James Grant: jimgrant@dwt.com

Michael D. Kimerer, mdk@kimerer.com

Gary Lincenberg: glincenberg@birdmarella.com

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