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3893354.2

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

Gary S. Lincenberg (admitted pro hac vice)

 glincenberg@birdmarella.com

Ariel A. Neuman (admitted pro hac vice)

 aneuman@birdmarella.com

Gopi K. Panchapakesan (admitted pro hac vice)

 gkp@birdmarella.com

BIRD, MARELLA, BOXER, WOLPERT, NESSIM,

DROOKS, LINCENBERG & RHOW, P.C.

1875 Century Park East, 23rd Floor

Los Angeles, California 90067-2561

Telephone: (310) 201-2100

Facsimile: (310) 201-2110

Attorneys for Defendant John Brunst

Paul J. Cambria, Jr. (admitted pro hac vice)

 pcambria@lglaw.com

Erin McCampbell Paris (admitted pro hac vice)

 eparis@lglaw.com

LIPSITZ GREEN SCIME CAMBRIA LLP

42 Delaware Avenue, Suite 120

Buffalo, New York 14202

Telephone: (716) 849-1333

Facsimile: (716) 855-1580

Attorneys for Defendant Michael Lacey

[Additional counsel listed on next page]

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America,

Plaintiff,

vs.

Michael Lacey, et al.,

Defendants.

CASE NO. 2:18-cr-00422-PHX-DJH

DEFENDANTS’ BRIEF IN SUPPORT 

OF OBJECTIONS TO COURT 

RULINGS DURING FERRER 

TESTIMONY 

Case 2:18-cr-00422-DJH Document 1840 Filed 10/05/23 Page 1 of 35
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3893354.2

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

Eric W. Kessler, 009158

 eric.kesslerlaw@gmail.com

Kessler Law Group

6720 N. Scottsdale Rd., Suite 210

Scottsdale, AZ 85253

Telephone: (480) 644-0093

Facsimile: (480) 644-0095

Bruce S. Feder, 004832

 bf@federlawpa.com

FEDER LAW OFFICE, P.A.

2930 E. Camelback Road, Suite 160

Phoenix, Arizona 85016

Telephone: (602) 257-0135 

Attorney for Defendant Scott Spear

David Eisenberg, 017218

 david@deisenbergplc.com

DAVID EISENBERG PLC

3550 N. Central Ave., Suite 1155

Phoenix, Arizona 85012

Telephone: (602) 237-5076

Facsimile: (602) 314-6273

Attorney for Defendant Andrew Padilla

Joy Malby Bertrand, 024181

 joy.bertrand@gmail.com

JOY BERTRAND ESQ LLC

PO Box 2734

Scottsdale, Arizona 85252

Telephone: (602) 374-5321

Facsimile: (480) 361-4694

Attorney for Defendant Joye Vaught

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3893354.2 3

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

TABLE OF CONTENTS

Page

I. Admission of Exhibits Under the Rule of Completeness That Establish 

Defendants’ Good Faith.............................................................................................. 5

A. Exhibit 616 (November 2010 Correspondence Between Jim Larkin, 

Steve Suskin, and Representatives of BMO) .................................................. 7

B. Responses to the State AG Letters .................................................................. 9

C. Exhibit 836 (July 2016 Correspondence Between Liz McDougall and 

The Wall Street Journal) ............................................................................... 10

II. Ferrer’s Prior Statements Regarding the California Criminal Complaints Are 

Classic Impeachment................................................................................................ 11

A. Ferrer Personally Waived the Attorney-Client Privilege as to the 

Impeachment Material................................................................................... 14

B. The Format of the Prior Inconsistent Statements Is Irrelevant...................... 15

III. Reference to Attorney Advice and Prior Litigation ................................................. 16

IV. CONCLUSION ........................................................................................................ 18

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3893354.2 4

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

TABLE OF AUTHORITIES

Page(s)

Cases

Arthur v. Gallagher Bassett Servs., Inc., 

No. CV 09-4882 SVW (CWX), 2010 WL 11596468, at *6 (C.D. Cal. 

June 1, 2010).................................................................................................................. 8

Beech Aircraft Corp. v. Rainey

488 U.S. 153, 109 S. Ct. 439 (1988).......................................................................... 5, 6

United States v. Cedeno-Cedeno

No. 14CR3305, 2016 WL 4376845 (S.D. Cal. Aug. 17, 2016)..................................... 8

United States v. Collicott

92 F.3d 973 (9th Cir. 1996)............................................................................................ 6

United States v. Monroe

943 F.2d 1007 (9th Cir. 1991)...................................................................................... 15

United States v. Morgan

555 F.2d 238 (9th Cir. 1977)........................................................................................ 13

United States v. Ortega

203 F.3d 675 (9th Cir. 2000).......................................................................................... 6

Statutes

47 U.S.C.A. § 230...................................................................................................... 7, 8, 11

18 U.S.C. § 1952.................................................................................................................. 9

Other Authorities

Fed. R. Evid. 

106...................................................................................................................... 5, 6, 7, 9

401.................................................................................................................................. 5

402.................................................................................................................................. 5

801(d)(1)(A)........................................................................................................... 15, 16

U.S. Const. amend. I.......................................................................................................... 11

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3893354.2 5

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

Defendants file this brief to address certain rulings that restricted defense counsel’s 

ability to let the jury hear the truth and impeach Ferrer.

I. Admission of Exhibits Under the Rule of Completeness That Establish 

Defendants’ Good Faith

Federal Rule of Evidence 106 states: “If a party introduces all or part of a writing or 

recorded statement, an adverse party may require the introduction, at that time, of any 

other part—or any other writing or recorded statement—that in fairness ought to be 

considered at the same time.” (emphasis added). Because different courts have exercised 

judgment differently in this respect, Rule 106 has been amended to clarify that the rule 

should not be construed narrowly. Effective December 1, 2023, the clarifying amendment

states: “If a party introduces all or part of a statement, an adverse party may require the 

introduction, at that time, of any other part—or any other statement—that in fairness ought 

to be considered at the same time. The adverse party may do so over a hearsay objection.” 

(emphasis added). The Advisory Committee Notes regarding the amendment state: 

[T]he amendment provides that if the existing fairness standard requires 

completion, then that completing statement is admissible over a hearsay 

objection. Courts have been in conflict over whether completing evidence 

properly required for completion under Rule 106 can be admitted over a 

hearsay objection. The Committee has determined that the rule of 

completeness, grounded in fairness, cannot fulfill its function if the party 

that creates a misimpression about the meaning of a proffered statement 

can then object on hearsay grounds and exclude a statement that would 

correct the misimpression. (emphasis added.)

In other words, an email cannot selectively be redacted to omit necessary context on 

the basis that the redacted, exculpatory portion of the email is hearsay. 

Under Rule 106, “when one party has made use of a portion of a document, such 

that misunderstanding or distortion can be averted only through presentation of another 

portion, the material required for completeness is ipso facto relevant and therefore 

admissible under Rules 401 and 402.” Beech Aircraft Corp. v. Rainey, 488 U.S. 153, 172, 

109 S. Ct. 439, 451 (1988). In Rainey, a case involving the crash of a Navy training 

aircraft, one of the plaintiffs (both of whom were surviving spouses of the pilots) was 

called as an adverse witness during the defendant’s case. The Supreme Court held that the 

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3893354.2 6

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

trial court abused its discretion in restricting the cross-examination of plaintiff (by his own 

counsel) by precluding questioning regarding certain aspects of a letter the plaintiff wrote 

to the Navy that were not covered on direct examination. Id. at 170. Specifically, “read in 

its entirety,” the letter was “fully consistent” with plaintiff’s theory that the accident was 

caused by a power failure. Id. By not permitting plaintiffs’ counsel to delve into the entire 

letter, “[i]t is plausible that a jury would have concluded from this information that 

[plaintiff] did not believe in his theory of power failure and had developed it only later for 

purposes of litigation.” Id. at 171. The Supreme Court affirmed the Court of Appeals’ 

ruling that it was “reversible error for the trial court to have prohibited cross-examination 

about additional portions of [plaintiff’s] letter which would have put in context the 

admissions elicited from him on direct.” Id. at 160-161, 175 (emphasis added).

At Dkt. 1776, the government relies on several cases for its objection to the 

admission of purported “self-serving” hearsay. Those cases are readily distinguishable. 

United States v. Ortega, 203 F.3d 675, 679 (9th Cir. 2000) involved a post-crime 

confession to the government. The Ninth Circuit held that a defendant cannot introduce

self-serving statements through a government interviewer by mixing in mitigating 

circumstances to an inculpatory confession. Id. at 682. Further, the defendant’s statement 

was an “unrecorded oral confession,” and therefore not subject to Rule 106, which “applies 

only to written and recorded statements.” Id.

Likewise, in United States v. Collicott, 92 F.3d 973, 977 (9th Cir. 1996), the Court 

held that Rule 106 did not apply to certain statements made by a witness to law 

enforcement because (1) “no writing or recorded statement was introduced by a party,” 

(2) the statements made by the witness to law enforcement were otherwise inadmissible 

hearsay, and (3) “the complete statement did not serve to correct a misleading impression 

of a prior statement created by taking [the witness’] comments out of context.” Id. at 983. 

None of these cases apply to an email that has been selectively redacted by the

Government to exclude admissible hearsay. And the Government ignores the clarifying 

amendment to Rule 106, which makes clear the impropriety of its redactions.

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3893354.2 7

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

A. Exhibit 616 (November 2010 Correspondence Between Jim Larkin, 

Steve Suskin, and Representatives of BMO)

On September 15, 2023, Exhibit 616a was admitted during the direct examination 

of Carl Ferrer over Brunst’s FRE 106 objection. 09/15/23 Tr. at 12-13. The Government 

introduced certain portions of Exhibit 616a to show that Brunst was involved with, and on 

notice of, certain issues being raised by Bank of Montreal (BMO). The Court denied the 

defense request to admit the entire exhibit during direct examination. The Court told 

defense counsel, “you can discuss it in your examination of the witness.” Id. at 12:25-

13:2. 

Under the rule of completeness, the unredacted email (set forth at Exhibit 616) 

should have been admitted on direct examination. During cross, Brunst’s counsel was not 

permitted to introduce the redacted portion and was not permitted to ask about key 

portions—including Larkin’s statement to his subordinates and the bank that Backpage’s 

operations were lawful. See 09/27/23 PM Tr. at 123:18-21, 124:20-126:13 (severely 

limiting what counsel could reference in his cross-examination of Ferrer).

Exhibit 616a is a series of back-and-forth emails between Spear, Larkin, and Mary 

Latta of BMO, copying Brunst. In connection with Brunst, the Government used the email to highlight that the content was shared with Brunst. The government elicited

testimony from Ferrer that Backpage’s communications with BMO merely “created the 

impression that we’re shutting down these [adult] categories . . . . So the whole thing is 

a sham.” 09/15/23 Tr. at 14:5-16. The unredacted email makes clear that the 

communications to BMO started with an email from Larkin to BMO, and then, in response 

to a question from BMO, Spear added more detail. 

The redacted portion of the e-mail thread—Larkin’s email to BMO that was part of 

the email chain copied to Brunst—tells BMO, inter alia, about moderation steps, that 

Backpage’s operations are lawful, and that Connecticut AG Blumenthal is attacking 

Backpage as part of an attack on the Communications Decency Act (CDA) in a “political 

dance” to help him get elected to the Senate. By redacting Exhibit 616a to present an 

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3893354.2 8

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

incomplete email to the jury, the Government successfully left the jury with the false 

impression that Brunst was made aware of the site being used for illegal purposes, while 

hiding the underlying email from Larkin advising Brunst and others that Backpage’s 

operations were “clearly lawful.”

The redacted portion of the email gives critical context to the notice provided to 

Brunst. This notice provided by the redacted portion of the email, which is relevant to 

Brunst’s mental state, is a non-hearsay purpose. See Arthur v. Gallagher Bassett Servs.,

Inc., No. CV 09-4882 SVW (CWX), 2010 WL 11596468, at *6 (C.D. Cal. June 1, 2010)

(“An out-of-court statement offered for any purpose other than to prove its truth - i.e., to 

prove the defendant’s state of mind or the effect on the listener - is not hearsay”). Further, 

Defendants should have been permitted to cross-examine Ferrer regarding any impression 

he formed about Larkin’s email to BMO, i.e., the same basis for the Government’s 

admission of the unredacted portion of the communication. See id.; see also United States

v. Cedeno-Cedeno, No. 14CR3305, 2016 WL 4376845, at *8 (S.D. Cal. Aug. 17, 2016) 

(“Out-of-court statements introduced to show the effect on the listener are not hearsay.”); 

09/15/23 Tr. at 15:6-8, 17:10-11 (regarding Mr. Spear’s e-mail to Ms. Latta, the 

Government asked Mr. Ferrer what he understood “that statement to mean”).

The exhibit also highlights why precluding references to the CDA—a defense to 

state civil and criminal cases—also leads to a completely misleading presentation of 

evidence. As the Court has now seen, the Government has relied heavily on State 

Attorneys General communications with Backpage. The government has squarely put at 

issue what Backpage’s responses to these AGs actually were. 08/31/23 Tr. at 169:9-13 

(“These defendants also received letters from the National Association of Attorneys 

General. They received a number of those letters. And one of their responses was, look at 

our moderation program. Look at how we’re reducing prostitution on our website.”); 

09/12/23 PM Tr. at 48:18-25; 09/13/23 AM Tr. at 69:7-13; 09/13/23 PM Tr. at 76:6-79:3, 

82:5-85:4 (Ferrer testifying that the response to the AGs was “deceptive, highly 

misleading”), 93:9-94:4; 09/14/23 AM Tr. at 17:2-17, 31:24-32:2, 53:5-59:20, 86:12-15. 

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3893354.2 9

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

The AG letters plainly are not notice of a Federal Travel Act violation; at most, they are 

notice of a potential prosecution under state law as to which the CDA was a defense.

Any rational juror would wonder (1) why Backpage was never charged by an AG at 

the time the letters were sent (it was only in late 2016 when the State of California brought 

charges against Larkin, Lacey, and Ferrer) and (2) whether Backpage had any viable 

defenses to the AG’s accusations at the time, and if so, what Backpage said in response. 

The government therefore should not be allowed to create the misimpression for the jury 

that Backpage (1) did nothing in response to the AG letters or (2) lacked legal recourse 

against the State AGs, when they had a complete defense under the CDA.

B. Responses to the State AG Letters

As noted above, the government put in several letters from State Attorneys General 

regarding the content on the Backpage site. See Exhs. 52, 119, 902. Over objections 

under Rule 106, the Court allowed the AG letters in, without admitting the corresponding 

responses from Backpage’s attorney, Samuel Fifer. In ruling on the objection (Mr. Feder 

stated, “I would also ask under Rule 106 for the other letters responsive to this to be shown 

to the jury”), the Court stated, “You can do that when it’s your turn, so overruled.” 

09/13/24 PM Tr. at 82:16-19. But the defense was not permitted to put into evidence the 

responsive letters from Backpage at Exhibits 487 and 5019. 09/26/23 PM Tr. at 15-18.

Under Rule 106, and because the government has “opened the door,” there are 

several bases for the admission of Backpage’s responses to the AG letters. First, the 

government put the responses at issue by eliciting testimony from Ferrer regarding the fact 

that there were responses, that the “owners” (i.e., certain of the Defendants) provided the 

responses, and that the responses were purportedly “deceptive” and “highly misleading.” 

09/13/23 PM Tr. at 84:15-19. Therefore, at a minimum, defense counsel should have been 

permitted to admit the responses and ask Ferrer point-by-point as to what portions he 

considered to be deceptive. 

Second, the AG letters themselves reference Backpage’s responses and therefore 

put them at issue. See Exh. 52 at 1 (“Thank you for your recent letter notifying us of 

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3893354.2 10

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

additional changes backpage has implemented in order to respond to our concerns . . . .”), 

(“As you indicated in your recent letter to us, you found that once you began charging for 

ads in the adult services section of the site . . . .”); Exh. 119 at 1 (“This letter is in response 

to Backpage.com’s assurances . . . ), id. at 3-4 (addressing Backpage’s “representations” 

made in prior responsive letters). 

Third, the Court held that the AG letters are “being offered for the knowledge of 

certain defendants as to what was going on at Backpage as alleged in the indictment.” 

09/14/23 AM at 66:21-67:1. But the indictment merely alleges the Government’s side of 

the story. The defense is entitled to respond to the indictment’s charges and what 

purportedly was in their “knowledge” by putting in the responsive letters. This is 

particularly the case as to Brunst. Ferrer testified that he did not consult with Brunst on the 

responses to the AG letters. 09/27/13 AM Tr. at 92:21-93:5. The responses themselves 

are therefore critical to show Brunst’s state of mind as to Backpage’s position vis-à-vis the 

AGs and the steps he understood Backpage to be taking to address the AG’s concerns. 

There is no testimony that Ferrer told Brunst the responses were deceptive or misleading. 

Therefore, Brunst’s reliance on the responsive letters would not amount to “self-serving”

hearsay—the letters instead go to his understanding as the CFO of the holding company 

that outside counsel had been retained to engage in a cooperative dialogue with the State 

AGs, which provided him comfort that any legal issues posed by the AG letters were being 

sufficiently addressed.

C. Exhibit 836 (July 2016 Correspondence Between Liz McDougall and 

The Wall Street Journal)

Over objection by the defense, the Court admitted Exhibit 836a, a heavily redacted 

version of Exhibit 836, for the purpose of showing that WSJ was communicating with 

Backpage’s General Counsel regarding The Erotic Review. 09/22/23 AM Tr. at 42-44. In 

the redacted portion of the email, which prompts the WSJ response that was admitted, 

Ms. McDougall says to the WSJ reporter, for example, “[Y]our questions and observations 

about TER numbers are concerning because they suggest you may not have a good 

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3893354.2 11

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

understanding of the complexities of moderating third-party content online.” The 

government should not be permitted to cherry-pick what it unilaterally deems to be 

admissible hearsay and keep out exculpatory hearsay that provides necessary context. As 

Mr. Ferrer is later copied into the e-mail exchange, defense counsel should have been 

permitted to ask him about his reaction to Ms. McDougall’s redacted comments to WSJ.

II. Ferrer’s Prior Statements Regarding the California Criminal Complaints Are 

Classic Impeachment.

The Court did not permit Mr. Lincenberg to use GL-CF-36 (May 18, 2017 email 

from Ferrer to James Grant and Daniel Quigley1) and GL-CF-37 (Ferrer’s prior 

inconsistent statements) to impeach Ferrer. On September 26, 2016, the California 

Attorney General filed a criminal complaint against Lacey, Larkin, and Ferrer charging 

pimping and related crimes. Exh. 5917. After the court dismissed the complaint,2

California then came back on December 23, 2016, and charged these same individuals 

with the same pimping and related crimes, while adding money laundering charges. 

Exh. 5919. California subsequently amended its complaint to include additional money 

laundering charges premised on bank fraud, after which the court dismissed the pimping 

and related charges and the money laundering charges based on pimping, leaving just the 

money laundering charges premised on bank fraud. (Those charges were pending at the 

time of the federal indictment and are currently stayed.). 

The money laundering charges in the California case are based on the same 

1 Mr. Quigley, an attorney, represented Medalist Holdings, Inc. (f/k/a New Times, Inc.) 

and its subsidiaries—the companies owned by Larkin and defendants Lacey, Brunst, and 

Spear. Mr. Quigley did not represent Ferrer in the California criminal cases.

2

 In dismissing the complaint, the California court expressly stated that the prosecution 

implicated the First Amendment, even though the court resolved the case on statutory 

grounds under the CDA and did not need to reach the constitutional issue presented. Exh. 

5324 at 4 (stating that “The First Amendment is implicated” and “Indeed, the protections 

afforded by the First Amendment were the motivating factors behind the enactment of the 

CDA. Congress expressly intended to relieve online publishers from liability for 

publishing third-party speech”). 

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TO COURT RULINGS DURING FERRER TESTIMONY 

allegations as those made by the Government here. For example, the California criminal 

complaint alleges: 

• The creation of Classified Solutions, Website Technologies, and PostFastr. Id.

at 2.

• “Ferrer applied for a merchant account with the payment processor Stripe for the 

classified site Postfastr.com. He omitted any reference to Backpage.com, but 

planned to use the account to process Backpage transactions.” Id. at 3. 

• “In early 2015, Defendant Ferrer received notice from American Express that 

the company would not process Backpage transactions after May 1, 2015. 

Defendant Ferrer directed Backpage personnel to ‘bury’ a message notifying 

users that American Express would not be accepted, but to process any 

American Express payments that Backpage users attempted.” Id. (also 

discussing the use of “credits”).

As part of Ferrer’s Plea Agreement here, he pled guilty to money laundering in the 

California state criminal case. Exh. 5994-2 at 3. On April 12, 2018, Ferrer pled guilty in 

California to conspiracy to commit money laundering and three substantive money 

laundering counts. Exh. A at ¶ 1. In the California plea agreement, Ferrer stipulated that 

“Because of the nature of the revenue stream, several financial institutions refused to 

process payments for advertisements on Backpage.com. However, Defendant created new 

merchant accounts, manipulated billing descriptors, misled financial institutions, and 

created shell companies in order to circumvent the financial institutions’ unwillingness to 

process Backpage.com’s commercial sex and other transactions.” Id. at ¶ 2.

These allegations are precisely what the Government has tried to demonstrate in the 

instant case. For example, Ferrer has testified here as follows:

• Regarding banking, “Q. Did you do anything to try to conceal the fact that 

Backpage was the ultimate recipient of the credit card transactions, the revenue? 

THE WITNESS: Yes. We created holding companies.” 09/12/23 PM Tr. at 

71:15-20.

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3893354.2 13

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

• “Posting Solutions was another shell company similar to, like, Website 

Technologies, very generic sounding company that we could open bank 

accounts with.” 09/21/23 PM Tr. at 89:8-10.

• Referring to the use of “credits”: “[W]e can direct them to PostFaster and there 

they can buy credits and the credits they buy in PostFaster will automatically 

appear under Backpage so we can manage their ad through PostFaster.” 

09/20/23 PM Tr. at 99:21-100:8.

• Ferrer testified that Backpage changed “billing descriptors” so “Chase won’t 

know or Chase won’t figure it out for a while and the transaction will go 

through.” 09/20/23 PM Tr. at 21:14-22:8.

But in response to the allegations in the California case, Ferrer made 

contemporaneous statements completely at odds with his testimony on direct examination.

Counsel attempted to impeach Ferrer with three of those statements: (1) that when 

a payment processing contract is filled out and months are spent vetting the contract, there 

is no disguising of the transaction; (2) there is no evidence of fraudulent merchant bank 

applications; and (3) a money laundering charge is an attempt to “legislate by prosecution” 

regarding government pressure to cut off unpopular speech. GL-CF-37 at 1. The 

document notes “CARL COMMENT,” followed by the prior inconsistent statements. 

Because counsel was cut off from using GL-CF-37, counsel never even got to use the other 

impeachment material from the document.3 For example, there are further prior 

inconsistent statements at the end of the document regarding the purpose of Website 

Technologies and “standard practice” regarding payment processing. Id. at 44. These 

statements are plainly inconsistent with Ferrer’s trial testimony. See United States v.

Morgan, 555 F.2d 238, 242 (9th Cir. 1977) (prior inconsistent statement admissible 

“whenever a reasonable man could infer on comparing the whole effect of the two 

3

 Moreover, in addition to GL-CF-37, there are other documents of a similar nature which 

Ferrer prepared, in the same time frame, that also contain statements directly at odds with 

his trial testimony in this case. 

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3893354.2 14

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

statements that they had been produced by inconsistent beliefs.”) (quoting 4 Weinstein’s 

Evidence, Matthew Bender, P. 801-76 801-76.1 (1976)).

Sustaining the Government’s objections, the Court precluded this impeachment, 

reasoning that the statements may be privileged, it is unclear who authored the statements, 

the document had strike-outs, the notes may have been a draft, and the statements were not 

under oath. 09/27/23 PM Tr. at 59-65; 09/28/23 AM Tr. at 65-71. But the Court refused 

to allow counsel to address some of these questions through examination of Ferrer, and

none of these are proper reasons to keep out the impeachment. 

A. Ferrer Personally Waived the Attorney-Client Privilege as to the 

Impeachment Material.

First, as part of his Proffer/Interview Agreement with the Government, Ferrer 

waived any privileges applicable to the impeachment material:

Mr. Ferrer voluntarily waives all claims of attorney-client privilege, 

whether in his personal or official capacity as the Chief Executive Officer 

of Backpage.com, LLC as to communications with any attorney or law 

firm that represented Backpage.com, or any related entity, where such 

communications concerned or related to Backpage.com or any related 

entity. This waiver does not apply to Mr. Ferrer’s current attorneys, Nanci 

Clarence, Jonathan Baum and anyone working on their behalf. Mr. Ferrer 

voluntarily agrees to provide all documents and other material that may be 

relevant to the investigation and that are in his possession or control. 

However, Mr. Ferrer shall not disclose any documents or information 

protected by the Joint Defense Agreement in this matter. Mr. Ferrer 

understands that his proffer/interview and any benefit he may receive from 

information he provides to the prosecution does not depend on his waiver of 

the attorney-client privilege.

Exh. 6177 at ¶ 2 (emphasis added) (previously filed at Dkt. 940-2 at 23).

There can be no dispute that Ferrer waived privilege as to the impeachment 

material, given that the material reflects his comments to attorneys regarding the California 

criminal complaint that concerns his role as the former CEO of Backpage. Ferrer’s 

counsel points to a separate waiver that concerns only privileges held by various corporate 

entities. Dkt. 1825. But the waiver at issue deals with privileges held by Ferrer in his 

“personal or official capacity.” 

Second, as part of a June 2017 Joint Defense/Common Interest and Confidentiality 

Case 2:18-cr-00422-DJH Document 1840 Filed 10/05/23 Page 14 of 35
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3893354.2 15

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

Agreement entered into by the Defendants and Ferrer, Ferrer agreed:

Any client signatory who enters into a cooperation agreement with the 

government or who testifies as a witness in any civil, administrative, or 

criminal proceeding arising from the Case4consents to any other signatory 

using for defense purposes any information or material contributed by the 

client or by his or her attorney. This specifically permits use of contributed 

information or material in cross-examining the witness and permits the 

presentation of their information or material by the defense at any point of 

the proceedings. Each undersigned attorney has explained fully to his or her 

client the limitations on direct use of the information obtained pursuant to 

this Agreement. Each Party represents that he/it has considered the foregoing 

and believes the benefits of being a signatory to this Agreement outweigh 

any of the limitations imposed by this Agreement.

Exh. B at ¶ 6 (redacted version of JDA).

5

This provision of the JDA plainly permits Defendants to use Ferrer’s prior 

statements—even assuming they are privileged and there has been no waiver—for 

impeachment purposes.

B. The Format of the Prior Inconsistent Statements Is Irrelevant.

Prior statements need not be under oath to be used for impeachment purposes. 

“A basic rule of evidence provides that prior inconsistent statements may be used to 

impeach the credibility of a witness.” United States v. Monroe, 943 F.2d 1007, 1012 (9th 

Cir. 1991) (citations and quotation marks omitted) (holding that the district court’s ruling 

that “prior inconsistent statements could not be introduced for impeachment purposes since 

they had not been given under oath pursuant to Fed. R. Evid. 801(d)(1)(A) . . . was clearly 

4 The JDA defines “Case” as “all matters relating to the case of the Arizona federal 

grand jury investigation and any related proceedings.”

5 The JDA was previously provided to the Court for in camera review in opposition to 

the Government’s Motion to Resolve Attorney-Client Privilege Issues. Dkt 345 at 4 n.3. 

A redacted version of the JDA is attached hereto. In that Order, the Court stated that it 

“declines to address the issue of whether Ferrer had authority to waive Backpage’s 

corporate attorney-client privilege based on the Defendants’ argument that the attorneyclient privilege was owned and later shared with Village Voice Media Holdings, LLC.” 

Id. at 4 n.4. In any event, the Court has never decided the issue of whether, pursuant to the 

JDA, Defendants may use joint-defense material contributed by Ferrer for the purpose of 

cross-examining Ferrer.

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3893354.2 16

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

erroneous”) (emphasis added). 

Further, the Court’s concerns regarding the format of the statements could have 

been addressed through cross-examination of Ferrer. Id. (“The prior statements may have 

been oral and unsworn, and the making of the previous statements may be drawn out on 

cross-examination of the witness himself, or if on cross-examination the witness has 

denied making the statement, or has failed to remember it, the making of the statement 

may be proved by another witness.”) (citations and quotation marks omitted). These issues 

flagged by the Court go to weight and can be further explored on re-direct. The 

Government seeks to hold Defendants liable for money laundering under Pinkerton based 

on Ferrer’s supposed crimes; therefore, the defense should be allowed to bring out that 

Ferrer himself did not believe he committed any crimes (and that he just said he did to get 

the benefits of his deal with the Government).

III. Reference to Attorney Advice and Prior Litigation

The Government has sought to use attorney advice and attorney involvement 

regarding Backpage as a sword and a shield. The Government has put in evidence 

communications involving attorneys (like Steve Suskin, Liz McDougall, Don Moon, 

Samuel Fifer, Ed McNally, Hemu Nigam, and others) as part of a tack to establish that 

Defendants were acting in bad faith. For example, the Government elicited testimony 

from Ferrer that:

• Steve Suskin was “in-house counsel” and presented “sham” statements to CNN 

in connection with Backpage’s dealings with State AGs. 09/14/23 PM Tr. at 

68:3-69:21. 

• Hemu Nigam suggested responding to CNN with a statement so that the reporter 

could “have more substance to utilize that positions Backpage.com in the best 

light.” 09/15/23 Tr. at 41:6-22.

• Ferrer testified to Backpage’s “legal strategy” regarding its responses to the AG 

letters (Exh. 588 at Slide 23) involved a “slow dance,” the implication being that 

Backpage’s legal strategy was to deceive the AGs. 09/13/23 PM Tr. at 

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3893354.2 17

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

108:6-18. 

• In connection with the use of Bank Frick, Ferrer testified that “Jed Brunst even 

ask[ed] that I hire a lawyer and threaten them,” commenting that he thought “it 

was not a good strategy.” 09/21/23 PM Tr. at 78:7-18. The Government then 

introduced Exhibit 1230, in which Brunst tells Ferrer that he should “fire up 

[DLA] Piper and get them to send a letter stating that the wire is for the payment 

of debts owed.” Id. at 80:19-81:8. The Government followed up by asking

Ferrer, “When you said that Mr. Brunst was suggesting you get a lawyer to go 

after the Frick bank, is this email, does that sort of reference that?” Ferrer 

responded, “Yes . . . [DLA] Piper is who we would fire up to send a letter.” Id. 

at 80:23-81:12.

But when Defendants sought to tell the other half of the story, or further illuminate 

for the jury the roles these individuals held with respect to Backpage, the Government 

objected, with the Court generally sustaining those objections. 

For example, that Hemu Nigam—whom Backpage retained to oversee its 

moderation efforts—formerly was a state sex crimes prosecutor and then a federal Internet 

sex crimes prosecutor is highly relevant.6 That Backpage hired someone with Nigam’s 

background undermines both the Government’s claims that Defendants intended to deceive 

law enforcement and facilitate business enterprises involved in prostitution, as well as the 

implication from Ferrer’s testimony that Nigam was part of a criminal conspiracy. See, 

e.g., 09/15/23 Tr. at 31:12-33:10 (referring to Nigam’s efforts as a “sham” that would not 

“eliminate prostitution ads.”); Exh. 938. Defendants should be able to argue to the jury in 

closing, “If Defendants intended to facilitate business enterprises involved in prostitution, 

why would they hire someone who spent ten years as a state and federal sex crimes 

prosecutor to oversee Backpage’s moderation practices? Doesn’t that show the opposite—

that Defendants were serious about moderating the content on Backpage?” None of this 

6 https://www.venable.com/professionals/n/hemanshu-nigam

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3893354.2 18

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

gets into “advice of counsel.” But when the defense probed this area, the Government’s 

objections were sustained. 09/26/23 PM Tr. at 12:22-25. There are at least 50 references 

to Nigam in Ferrer’s direct testimony. The Government chose to interject Nigam into the 

trial and to elicit testimony from Ferrer casting aspersions at Nigam (and Defendants’ 

affiliation with him), but now seeks to hide his credentials from the jury. This is 

particularly significant as to Brunst. Ferrer has testified Brunst was not “affiliated or a part 

of the moderation department” (09/27/23 AM Tr. at 89:18-22). But as CFO of the holding 

company, Brunst would have taken comfort in the fact that a former federal prosecutor was 

dealing with moderation, a fact that plainly goes to Brunst’s good faith and lack of intent.

Further, on the Government’s motion, the Court has precluded the defense from 

referencing prior litigation. But the Government sought to use contemplated litigation as 

a fact against Brunst by eliciting testimony from Ferrer regarding the possible retention of 

DLA Piper to threaten Bank Frick, a strategy with which Ferrer said he disagreed. The 

implication from this testimony is that banks were giving Backpage trouble, Brunst 

thought involving lawyers would be a good idea, and Ferrer disagreed. Of course, this 

testimony is directly contradicted by Backpage’s decision to sue Sheriff Dart to get its 

credit card processing back, a decision that was made when Ferrer owned the company and 

was CEO (and a decision that contemporaneous emails show Ferrer agreed with, e.g., 

Exh. 6025). But the defense has been precluded from referencing any prior litigation, even 

where the initiation of such litigation was in direct response to events that the Government 

has put at issue (like “credit card Armageddon”).

IV. CONCLUSION

For the foregoing reasons, Defendants request that the Court permit the admission 

of the exhibits, impeachment material, and testimony discussed herein.

Pursuant to the District’s Electronic Case Filing Administrative Policies and

Procedures Manual (May 2023) § II(C)(3), Gary S. Lincenberg hereby attests that all

other signatories listed, and on whose behalf this filing is submitted, concur in the filing’s

Case 2:18-cr-00422-DJH Document 1840 Filed 10/05/23 Page 18 of 35
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3893354.2 19

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

content and have authorized its filing.

DATED: October 5, 2023 Respectfully submitted,

Gary S. Lincenberg

Ariel A. Neuman

Gopi K. Panchapakesan

Bird, Marella, Boxer, Wolpert, Nessim,

Drooks, Lincenberg & Rhow, P.C.

By: /s/ Gary S. Lincenberg 

Gary S. Lincenberg 

Attorneys for Defendant John Brunst

DATED: October 5, 2023 Kessler Law Group

By: /s/ Eric W. Kessler

Eric W. Kessler

Attorney for Defendant Scott Spear

DATED: October 5, 2023 Paul J. Cambria

Erin McCampbell Paris

Lipsitz Green Scime Cambria LLP

By: /s/ Paul J. Cambria

Paul J. Cambria

Attorneys for Defendant Michael Lacey

DATED: October 5, 2023 Feder Law Office, P.A.

By: /s/ Bruce S. Feder

Bruce S. Feder

Attorney for Defendant Scott Spear

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3893354.2 20

DEFENDANTS’ BRIEF IN SUPPORT OF OBJECTIONS 

TO COURT RULINGS DURING FERRER TESTIMONY 

DATED: October 5, 2023 The Law Office of David Eisenberg, PLC

By: /s/ David Eisenberg

David Eisenberg

Attorney for Defendant Andrew Padilla

DATED: October 5, 2023 Joy Bertrand Esq. LLC

By: /s/ Joy Malby Bertrand

Joy Malby Bertrand 

Attorney for Defendant Joye Vaught

Case 2:18-cr-00422-DJH Document 1840 Filed 10/05/23 Page 20 of 35
Exhibit A

Case 2:18-cr-00422-DJH Document 1840 Filed 10/05/23 Page 21 of 35
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XAVIER BECERRA 

Attorney Genera l of California 

JAMES ROOT 

Senior Assistant Attorney General 

RANDY MAILMAN 

Deputy Attorney General 

State Bar No . 246 134 

1300 I Street, Suite 125 

P.O. Box 944255 

Sacramento, CA 94244-2550 

Telephone : (9 16) 210-7253 

Fax : (916) 322-2368 

E-mail: Randy.Mailman @doj.ca.gov 

Attorneys for the People of the State of 

California 

SUPERIOR COURT OF THE STATE OF CALIFORNIA 

COUNTY OF SACRAMENTO 

PEOPLE OF THE STATE OF 

CALIFORNIA, 

v. 

CARL FERRER 

Plaintiff, 

(DOB: 03-16-1961) ('X.ref# 5094010) 

Defendant. 

Case No. 16FE024013 

PLEA AGREEMENT 

21 In order to resolve the charges against him, Carl Ferrer ("Defendant") , represented by and 

22 through his attorney of record, Nanci Clarence, agree with the People as follows : 

23 1. Defendant will plead guilty to counts 1, 2, 3, and 12 in the First Amended 

24 Criminal Comp laint charging him as follows: 

25 a. Count 1 - Conspiracy to commit money laundering in violation of California 

26 Penal Code sections 182 (a)(l) and 186.l0(a)(l) and (2), a felony. 

27 b. Count 2 - Money laundering in violation of Penal Code section 186.l0(a), a 

28 felony. 

PLEA AGREEMENT 

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c. Count 3 - Money laundering in violation of Penal Code section 186.1 0(a), a 

felony . 

d. Count 12 - Money laundering in violation of Penal Code section 186. I 0(a), a 

felony. 

2. The People and Defendant stipulate to the following facts: 

On or between January l, 2013 and September I, 2016, in the County of 

Sacramento and throughout the State of California, Defendant, along with Michae l 

Lacey and James Larkin, operated multiple websites, including Backpage.com. 

Backpage .com offers online classified services, but its overwhelming source of 

income was generated by charging customers money to post advertisements in the 

adult escort section . Because of the nature of the revenue stream, several financial 

institutions refused to process payments for advert isements on Backpage .com. 

However, Defendant created new merchant accounts, manipulated billing 

descriptors, misled financial institutions, and created shell companies in order to 

circwnvent the financial institutions' unwillingness to process Backpage .com's 

commercial sex and other transactions. 

Between July I, 2014 and July 3 1, 2014, Defendant transferred, between 

bank accounts, more than $563,575 in revenue generated from the sale of 

California based adult services section adve1tisements on Backpage.com, through 

Bank Corporation, Wells Fargo, and J.P. Morgan Chase, knowing that the money 

represented the proceeds of bank and wire fraud. 

Between August I, 2014 and August 31, 2014, Defendant transferred, 

between bank accounts, more than $1,099,309 in revenue generated from the sale 

of California based adult services section advertisements on Backpage.com, 

through Bank Corporation, Wells Fargo, and J. P. Morgan Chase, knowing that the 

money represented the proceeds of bank and wire fraud. 

Between May l, 2015 and May 3 1, 2015, Defendant transfened, between 

bank accounts, more than $48,288.85 in revenue generated from the sale of 

California based adult services section adve1tisements on Backpage.com, through 

American Express, knowing that the money represented the proceeds of bank and 

wire fraud . 

3. Defendant agrees to cooperate with the investigation and prosecution of co25 conspirators Michael Lacey and James Larkin in Sacramento County Superior Court case number 

26 16FE024013 by making himself available to the Attorney General's Office to assist in the 

27 investigation and prosecution, truthfully recalling and relating information regarding the case, 

28 providing truthful testimony at preliminary hearing, grand jury, trial, or other comt proceeding 

2 

PLEA AGREEMENT 

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without further process of subpoena, identifying forfe itable assets, and providing access to 

Backpage.com transaction data. 

4. No later than five business days after entering this plea agreement, or otherwise as 

directed by the U.S. Attorney's Office for the District of Arizona, Defendant agrees to take all 

steps within his power to shut down Backpage.com in all countries where it operates. 

5. No later than fourteen business days after entering this plea agreement, or 

otherwise as directed by the U.S. Attorney's Office for the District of Arizona, Defendant agrees 

to take all steps within his power to forfeit, to the United States, all operating rights for all 

internet doma ins-such as Backpage, Ymas, Postfastr, and Trnckrjobs- used to operate the 

website Backpage .com throughout the world . 

6. Defendant agrees that he will make Backpage.com data available for law 

enforcement and act as the declarant to authenticate business records as the custodian of records, 

if necessary, until the time of sentenc ing, 

. 7. The People and Defendant agree that sentencing will be scheduled for as soon as 

possible after Defendant has completed his cooperation and after sentencing in the federal matter. 

8. The maximum sentence that can be imposed under this plea agreement is 5 years. 

Admission to the factual basis contained in paragraph 2 will not be used to support the imposition 

of enhancements under Pena l Code § 186.10 subd. ( c ). 

9. Pursuant to Penal Code§ 1192.5, the People agree to recommend that Defendant 

21 be sentenced to a period of incarceration concurrent with and not to exceed the custodial time 

22 imposed in the matter of United States v. Carl Ferrer, United States District Court, District of 

23 Arizona, case number CR-18-464-PHX-DJH. Such sentence shall be served in a federal facility. 

24 If the com1 in this matter, l 6FE024013, determines that the Defendant has failed to satisfy the 

25 above-described obligations to cooperate and testify truthfully , Defendant may be sentenced up to 

26 the maximum term of five years in state custody. The People shall, in good faith, consider the 

27 nature and extent of Defendant 's cooperation in whatever sentencing recommendation is made to 

28 

3 

PLEA AGREEM EN 

.

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the Court. 

10. In lieu of a fine, Defendant agrees, pursuant to his federal plea agreement, to pay 

fuJI restitution to all vict ims directly or proximately harmed by his conduct. 

11. The People agree to file any motion necessary in order to achieve the People's 

recommended sentence. 

12. Defendant understands that the Court is not bound by the terms of this agreement. 

However , if the Court does not follow the People 's recommendations outlined in paragraph 9 

above, Defendant wiJI be permitted to withdraw the plea and no statement of Defendant-rece ived 

during the plea will be admitted against the Defendant in any subsequent criminal proceedings. 

13. The Defendant agrees and acknowledges that this plea waives any and all of his 

appellate rights. 

Ill 

4 

PLEA AGREEMENT 

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14. The People and the Defendant enter into this agreement with the intent to achieve 

a global resolution of the various criminal actions now pending against Defendant. If the 

Defendant's plea agreements in Texas and the federa l matter in Arizona are not accepted, 

Defendant may the withdraw his plea of guilty to the charges set forth in paragraphs l and 2 

above . 

7 Dated: April fc:-; 2018 

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Dated: April JL, 20 18 

Dated: April ~, 2018 

Defendant 

:;(~~ 

JONATHAN BAUM 

Attorneys for Defendant 

r,~ · 

RANDY MAILMAN 

Deputy Attorney General 

People of the State of California 

STIPULATION SO APPROVED. The above stipulation will be incorporated into the record, and 

LAWREMCE G. BROWN 

5 

PLEA AGREEMENT 

Case 2:18-cr-00422-DJH Document 1840 Filed 10/05/23 Page 26 of 35
Exhibit B

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