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GARY M. RESTAINO

United States Attorney

District of Arizona

KEVIN M. RAPP (Ariz. Bar No. 014249, kevin.rapp@usdoj.gov)

MARGARET PERLMETER (Ariz. Bar No. 024805, margaret.perlmeter@usdoj.gov)

PETER S. KOZINETS (Ariz. Bar No. 019856, peter.kozinets@usdoj.gov) 

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

Assistant U.S. Attorneys

40 N. Central Avenue, Suite 1800

Phoenix, Arizona 85004-4408

Telephone (602) 514-7500

DAN G. BOYLE (N.Y. Bar No. 5216825, daniel.boyle2@usdoj.gov) 

Special Assistant U.S. Attorney

312 N. Spring Street, Suite 1400

Los Angeles, CA 90012

Telephone (213) 894-2426

NICOLE M. ARGENTIERI

Acting Assistant Attorney General 

Criminal Division, U.S. Department of Justice

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

U.S. Department of Justice

Child Exploitation and Obscenity Section

1301 New York Avenue, NW, 11th Floor

Washington, D.C. 20005

Telephone (202) 412-4136

Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America,

Plaintiff, 

v. 

Michael Lacey, et al.,

Defendants.

No. CR-18-422-PHX-SMB

RESPONSE OF THE UNITED STATES 

TO DEFENDANTS’ PROPOSED 

MODIFIED FORFEITURE JURY

INSTRUCTIONS

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The United States, by and through undersigned counsel, hereby submits this

Response to Defendants’ proposed modifications (Doc. 1940) to the United States’

previously-filed Proposed Forfeiture Jury Instructions (Doc. 1935). 

Response to Modified Jury Instruction No.1:

The government objects in part to the Defendants’ modifications to this proposed 

instruction. Specifically, the government objects to the following modification to this 

instruction: “Count 1, which concerns: an agreement between two or more persons to 

commit at least one Travel Act offense as charged in Counts 2-51 of the indictment by 

promoting, or facilitating the promotion of, a business enterprise or enterprises involving 

prostitution offenses in violation of the laws of the State in which they were committed.”

(emphasis added). This modification not supported by statute or the law of the case, and 

should be rejected. 

First, this modification is legally-incorrect. Pursuant to 18 U.S.C. 981(a)(1)(C), the 

government may seek forfeiture of “[a]ny property, real or personal, which constitutes or 

is derived from proceeds traceable to a violation ... any offense constituting specified 

unlawful activity’ (as defined in section 1956(c)(7) of this title), or a conspiracy to commit 

such offense.” 18 U.S.C.§1957(c)(7)(A) incorporates by reference 18 U.S.C. § 1961(1), 

which specially refers to “any act which is indictable under any of the following provisions 

of title 18... section 1952 (relating to racketeering)” (emphasis added). As such, the 

government need not actually charge an SUA for the proceeds of such an SUA to be 

forfeitable, where the government obtains a conviction on a conspiracy to commit the same.

Second, Defendants’ proposed modification is inconsistent with the law of the case. 

The Court has recognized that the Travel Act conspiracy charged in Count 1 covers 

Defendants’ work at Backpage from 2004 to 2018, and that the 50 substantive Travel Act 

counts simply reflect specific examples of ads that the conspiracy produced. For example, 

in Doc. 1643 at 4, the Court wrote: “[T]hough not clearly stated, Defendants seem to argue 

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that the Government is prohibited from offering testimony or evidence about acts unrelated 

to a posted ad or witnesses who are not connected to a charged ad. Yet, the Court has 

already clarified that the Government may introduce proof of the entirety of the scope of 

the conspiracy.” The Court then found that evidence of Defendants’ prostitution marketing 

strategies were relevant and admissible, reasoning that:

Given the nature of the SI’s allegations, these categories of evidence are 

relevant to show Defendants knowledge of the ads, how and why they were 

created and their intended purposes. Further, it is relevant to show whether 

Defendants “intended to promote a business of prostitution” by posting the 

ads. (See Doc. 1272 at 3). Finally, the Court already found that facts that predate the 2013 allegations were relevant as evidence demonstrating 

“furtherance of the charged conspiracy.” Therefore, evidence of ad 

moderation, Backpage’s “reciprocal” advertising/link program with the 

Erotic Review, and content “aggregation’ to secure future advertising 

revenues will not be precluded to the extent that (1) the SI provides notice to 

Defendants of these acts, and (2) the acts demonstrate Defendants’ 

knowledge, intent and conduct in furtherance of the conspiracy’s objective...

Doc. 1643 at 6. Similarly, in Doc. 793 at 20, the Court described the 50 charged ads as 

instances of Defendants’ conduct during the conspiracy: “The alleged facts in the SI, taken 

as true, establish Defendants had the specific intent to promote prostitution in violation of 

the Travel Act. They conspired together to do so. The conspiracy was successful and 

resulted in the 50 ads for prostitution that now make up 50 counts of violating the Travel 

Act.” And finally, in Doc. 946, the Court rejected Defendants’ suggestion that the SI 

indicted a “‘boundless conspiracy’ to facilitate prostitution in general”; rather, Defendants 

“were indicted for facilitating (via publishing ads) on fifty distinct occasions where 

prostitutes, prostitution-related businesses, or other groups were involved in the business 

of prostitution.” Doc. 946 at 13. Critically, the Court then explained:

To be sure, the allegations certainly describe a course of conduct where 

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Defendants facilitated “unlawful activity,” including numerous pimps, 

prostitutes and traffickers in violation of the Travel Act. They also certainly 

describe how these various groups continuously engaged in prostitution, 

which plausibly fits within the definition of a “business enterprise.” 

When read in its entirety and accordingly to common sense, the SI adequately 

alleges the underlying unlawful businesses involved in prostitution that 

Defendants intended to facilitate and thereafter facilitated or attempted to 

facilitate by publishing ads on Backpage.com. This is true even though the 

SI does not label each supported prostitution venture as a “business enterprise 

involving prostitution,” but instead alleges a continuous course of criminal 

conduct being supported on fifty distinct occasions.

Doc. 946 at 13-14. In summary, the SI alleges an agreement to promote prostitution 

business enterprises over 14 years, and charges 50 exemplar ads posted from 2013-2018, 

but as noted above, forfeiture under § 981(A)(1)(C) applies the proceeds of a conspiracy

as a whole, not solely charged instances. Reading this section otherwise would effectively 

nullify the conspiracy provision in subsection (A)(1)(C), forcing the government to charge 

each and every underlying wrongful act in order to separate a convicted wrongdoer from 

the proceeds of crime. Such a holding would be unsupported by law. 

Response to Modified Jury Instruction No.2:

The government has no objection to Defendants’ modification to this proposed jury 

instruction. 

Response to Modified Jury Instruction No.3:

The government has no objection to Defendants’ modification to this proposed jury 

instruction. 

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Response to Modified Jury Instruction No.4:

The government has no objection to Defendants’ modification to this proposed jury 

instruction. 

Response to Modified Jury Instruction No.5:

The government objects to Defendants’ modification to this proposed jury 

instruction, as the government’s proposed instruction tracks the Ninth Circuit’s Model 

Instruction for the preponderance of the evidence standard. Furthermore, the preceding

proposed jury instruction (No.4) identifies for the jury that the burden remains on the 

government at this stage, so Defendants’ proposed modification is redundant and 

unnecessary. 

Response to Modified Jury Instruction No.7:

The government has no objection to Defendants’ modification to this proposed jury 

instruction. 

Response to Defendants’ New Jury Instruction No.8:

The government has no objection to Defendants’ new proposed jury instruction. 

Response to Defendants’ New Jury Instruction No.9:

The government has no objection to Defendants’ new proposed jury instruction. 

Response to Modified Jury Instruction No. 8 (Modified No. 10):

Defendants have not proposed any modifications to this proposed jury instruction

other than renumbering, which the government does not object to. 

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Response to Modified Jury Instruction No.9 :

The government objects to Defendants’ deletion of proposed jury instruction. This 

instruction accurately states the scope of forfeiture in the event of a conviction under Count 

1. While Defendants have incorporated some portions of this instruction into later modified

instructions, removing this instruction is likely to be confusing to the jury. For example,

without first being instructed on the scope of forfeiture for this count, the following two 

instructions – defining “traceable to” and “proceeds” – are likely to confuse the jury, which

will not have been instructed as to how these terms are relevant. 

Response Defendants’ New Jury Instruction No.11:

The government has no objection to Defendants’ new proposed jury instruction. 

Response to Modified Jury Instruction No. 10 (Modified No. 12):

The government objects to Defendants’ modification to this proposed jury 

instruction. As noted in the government’s cited authorities, the change in value of proceeds

is not a question for the jury, and the jury should be specifically directed not to speculate

about changes in value. For example, certain assets here were restrained in investment 

accounts which have continued to accrue value since seizure. The jury should be properly 

instructed that any subsequent changes in value are irrelevant to the question of nexus. 

Furthermore, language such as “obtained directly or indirectly” may be familiar to lawyers, 

but risks jury confusion without explaining how proceeds of an offense may be converted 

between different forms, but remain proceeds nonetheless. The government’s proposed 

instruction adequate addresses these issues, and should be given as originally proposed. 

Response to Modified Jury Instruction No. 11 (Modified No. 13):

The government objects to Defendants’ modification to this proposed jury 

instruction on two grounds:

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First, as described above in response to Defendants’ modifications to instruction 

No.1, Defendants’ attempt to limit forfeiture to the proceeds of the ads charged as 

substantive courts is incorrect and no supported by the law of the case. 

Second, Defendants’ modifications are likely to be confusing to the jury, as 

Defendants’ modification fails to define what a “nexus” is for the jury, as such, the jury is 

left to speculate as to how to meet the second element proposed by the defense. As the 

Seventh Circuit’s model jury instructions note – the authority relied on by Defendants –

“For the most part, the nexus requirement of the Rule will be met under the statutory 

requirement of what property is subject to forfeiture.” See William J. Bauer Pattern 

Criminal Jury Instructions of the Seventh Circuit (2023 Ed.), p. 432 (Definition of Nexus

Instruction). Here, to the extent that the jury finds that the identified assets are indeed 

proceeds of the conduct alleged in Count 1, the nexus requirement will necessarily have 

been met. 

Response to Modified Jury Instruction No. 12 (Modified No. 13):

The government objects to Defendants’ modification to this proposed jury 

instruction for many of the same reasons identified in response to Defendants’ deletion of 

proposed jury instruction No. 9. The jury will be helped by being instructed on the relevant 

scope of forfeiture under the money laundering statutes before being instructed on the 

definitions of the relevant terms, which will also help distinguish between the relevant

theories of forfeiture being put forth. 

Response to Modified Jury Instruction No. 13 (Modified No. 13):

The government objects to Defendants’ deletion of this proposed jury instruction. 

Title 18, United States Code, Section 982(a)(1) provides for the criminal forfeiture 

of any property, real or personal, that is “involved in” a transaction or attempted 

transaction in violation 18 U.S.C. § 1956, 1957, or 1960. This language, “involved in,” is 

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distinct from that used in the broader civil forfeiture statue, 18 U.S.C. § 981(a)(1)(C), 

which authorizes seizure of the “proceeds” of a wide range of offenses. See 18 U.S.C. § 

981(a)(1)(C) (referring to “property, real or personal, which constitutes or is derived from 

proceeds traceable to a violation of [enumerated statutes]”). For this reason, courts have 

held that forfeiture pursuant to the money laundering statutes must necessarily have a 

meaning distinct from the mere proceeds of crime. See generally Stefan Cassela, Asset 

Forfeiture Law in the United States, 2d, § 27-7 (“[A]s the courts have repeatedly held, the 

defendant in a criminal case or the claimant in a civil forfeiture case has no reason to 

complain that the Government is seeking to forfeit more than the proceeds of the 

underlying crime” and collecting cases). Courts have also recognized that the legislative 

history supports this conclusion. See In re 650 Fifth Ave. & Related Properties, 777 F. 

Supp. 2d 529, 563 (S.D.N.Y. 2011) (quoting 134 Cong. Record S17365 (daily ed. Nov. 

10, 1988) (“[T]he term ‘property involved’ is intended to include the money or other 

property being laundered (the corpus), any commissions or fees paid to the launderer, and 

any property used to facilitate the laundering offense.”)). 

One of the chief goals of forfeiture is to remove the profit from crime by separating 

the criminal from his or her dishonest gains, and to divest criminal actors from the 

apparatus allowing them to engage in criminal activity. See United States v. Newman, 659 

F.3d 1235, 1242 (9th Cir. 2011); United States v. Casey, 444 F.3d 1071, 1073 (9th Cir. 

2006). Consistent with these holdings, in cases involving a money laundering offense, 

numerous courts have held that the forfeiture statutes pertaining to money laundering 

offenses permit the government to seize and forfeit “untainted property” commingled with 

“tainted” property, when that untainted property facilitates the laundering offense, such as 

by disguising the nature, source, location, or control of the tainted funds. See United States 

v. Kivanc, 714 F.3d 782, 794-95 (4th Cir. 2013) (“[W]hen legitimate funds are commingled 

with property involved in money laundering or purchased with criminally derived 

proceeds, the entire property, including the legitimate funds, is subject to forfeiture.”);

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United States v. Huber, 404 F.3d 1047, 1056-1058 (8th Cir. 2005) (where defendant 

commingled fraud proceeds and legitimate crop sale proceeds, then transferred 

commingled funds, government was entitled to total amount involved in the money 

laundering transactions with no deduction for the amount of legitimate sales); see also

United States v. Guerrero, 2021 WL 2550154, *9 (N.D. Ill. June 22, 2021) (money from 

unknown source that was commingled with fraud proceeds facilitated the concealment 

laundering of the fraud proceeds and, accordingly, property acquired with the commingled 

funds was forfeitable); United States v. Romano, 2021 WL 1711633, *5-6 (E.D.N.Y. Apr. 

29, 2021) (by laundering fraud proceeds through their personal bank accounts, to 

commingle the proceeds with other funds for a concealment laundering purpose, the 

defendants made the commingled funds forfeitable as facilitating property); United States 

v. Coffman, 859 F. Supp. 2d 871, 876-77 (E.D. Ky. 2012) (concluding that clean funds in 

bank account were subject to forfeiture because they had “been co[m]mingled with tainted 

funds for the purpose of obfuscating the origin or existence of the tainted money”); United

States v. $1,761 in U.S. Currency, No. 3:09–cv–814–J–34JRK, 2011 WL 4552354, *9 

(M.D. Fla. Sept. 30, 2011) (legitimate funds may be forfeited if commingled with drug 

proceeds by a drug dealer). As such, this instruction accurately defines when property is 

“involved in” a money laundering violation for the jury. 

Response to Modified Jury Instruction No.14:

The government has no objection to Defendants’ modification to this proposed jury 

instruction.

Response to Modified Jury Instruction No.15:

Defendants’ proposed Jury Instruction No. 15 (First Amendment) should not be 

given. First, the instruction is unnecessary. The jury has already been instructed on the First 

Amendment’s application to this case. There is no need to provide an additional instruction 

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that would apply to the proceeds of Defendants’ criminal conduct and/or to Defendants’ 

laundering of those funds. 

Second, Defendants’ authorities do not support the instruction. Simon & Schuster, 

Inc. v. Members of the N.Y. State Crime Bd., 502 U.S. 105 (1991), invalidated as facially 

overbroad New York’s “Son of Sam” statute, which required that a “criminal” place into 

an escrow account any income from works that he authored “on any subject, provided that 

they contained the author’s thoughts or recollections about his crime, however tangentially 

or incidentally.” 502 U.S. at 121. As the Court observed, a person never accused or 

charged, “but who admits in a book or other work to having committed a crime, is within 

the statute’s coverage.” Id. Had the statute been in effect at an earlier time, it would have 

applied to The Autobiography of Malcom X and Thoreau’s Civil Disobedience. Id. at 122. 

The Court invalidated the statute as “significantly overinclusive” and confined its holding 

to that statute. Id. at 121-23. Simon & Schuster has no application here. 

Moreover, Simon & Schuster involved content-based regulation of storytelling 

about an author’s past—creative expression that stands on different constitutional footing 

than commercial speech. See Central Hudson Gas & Elec. Corp. v. Public Service Comm’n 

of New York, 447 U.S. 557, 562-63 (1980) (“The Constitution . . . accords a lesser 

protection to commercial speech than to other constitutionally guaranteed expression.”). 

Simon & Schuster also did not involve commercial speech proposing an illegal transaction, 

which is “categorically excluded from First Amendment protection.” United States v. 

Williams, 553 US. 285, 297 (2008). Because the forfeitures concern funds derived from or 

traceable to prostitution advertising—speech devoid of First Amendment protection—

Simon & Schuster isinapposite. See Pittsburgh Press Co. v. Pittsburgh Comm’n on Human 

Relations, 413 U.S. 376, 388 (1973) (wants ads soliciting prostitution are not protected by 

the First Amendment); Coyote Pub., Inc. v. Miller, 598 F.3d 592, 600-44 (9th Cir. 2010); 

(upholding Nevada ban on prostitution advertising); Erotic Serv. Provider Leg. Educ. and 

Research Project v. Gascon, 880 F.3d 450, 460 (9th Cir. 2018), amended, 881 F.3d 792 

(9th Cir. 2018) (approving ordinance outlawing prostitution solicitations). See also

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Rodney A. Smolla, 2 RIGHTS AND LIABILITIES IN MEDIA CONTENT § 11:10 (2d ed.) (“There 

is no constitutional right to advertise crime.”).

Valle Del Sol Inc. v. Whiting, 709 F.3d 808, 822-23 (9th Cir. 2013), likewise 

contains no language that might limit Defendants’ liability here. Whiting held that Arizona 

could not target day laborers for harsher punishment when, in the course of soliciting lawful 

day-laborer work, they violated unrelated traffic laws. Id. at 814, 823. It contains no 

analysis or discussion of whether code words or other signifiers of illegal activity may be 

considered in determining whether ads or solicitations propose unlawful transactions.

And, in Whiting, the Ninth Circuit cited with approval various formulations used by 

the Supreme Court in defining the outer limits of what commercial speech is categorically 

excluded from constitutional protection:

Some decisions have expressly phrased the legality requirement as whether 

“the transactions proposed in the forbidden [communication] are themselves 

illegal in any way.” Va. State Bd. of Pharmacy, 425 U.S. at 772. . . . Other 

decisions have used Central Hudson's more general “related to unlawful 

activity” language. Cent. Hudson, 447 U.S. at 564[.]

Whiting, 709 F.3d at 821. These Supreme Court- and Ninth Circuit-endorsed formulations 

do not support Defendants. 

Defendants’ out-of-Circuit case also misses the mark. Centro de la Comunidad 

Hispana de Locust Valley v. Town of Oyster Bay, 868 F.3d 104, 107 (2d Cir. 2017), 

involved a challenge to a day-laborer ordinance that targeted unquestionably lawful 

speech— “soliciting employment of any kind.” The court did not discuss coded 

solicitations for illegal transactions, let alone consider anything approaching the thinlyveiled prostitution ads that drove the overwhelming majority of Backpage’s revenue. The

Court has already ruled that Defendants cannot rely on the disguised nature of those ads to 

avoid accountability. (See Doc. 1643 at 8-9 (“[Defendants] may not . . . assert that their 

facilitation of unlawful business practices, i.e., publishing ads for prostitution, is activity 

that is protected by the First Amendment. . . . [T]o the extent that Defendants seek to invoke 

their First Amendment rights as a defense to the allegations that they conspired to promote 

and/or facilitate prostitution through veiled ads for prostitution, they are prohibited from 

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doing so.”).) 

Response to Modified Jury Instruction No.16:

The government largely has no objection to Defendants’ proposed modifications to 

this jury instruction, or the corresponding modifications to the proposed special verdict 

form with one exception: the government objects to requesting that the jury identify an 

“amount” for forfeiture under Counts 69, 70, 83, 84. In those counts, the government is 

seeking forfeiture of entire real properties on the grounds these the properties themselves 

were involved in the charged transactional money laundering counts, and is not seeking 

any proposed amount in equity which might be readily divided. These assets are not alleged

to be proceeds, and the question of whether such a forfeiture is disproportionate under the 

Eighth Amendment is one for the Court, not the jury. 

Respectfully submitted this 6th day of November, 2023.

GARY M. RESTAINO

United States Attorney

District of Arizona

NICOLE M. ARGENTIERI

Acting Assistant Attorney General 

Criminal Division, U.S. Department of Justice

/s/

KEVIN M. RAPP

MARGARET PERLMETER

PETER KOZINETS

ANDREW STONE

DAN G. BOYLE

Assistant U.S. Attorneys

AUSTIN M. BERRY

Trial Attorney

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CERTIFICATE OF SERVICE

I hereby certify that on November 6, 2023, I electronically transmitted the attached 

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

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

as counsel of record.

s/ Dan G. Boyle

Dan G. Boyle

U.S. Attorney’s Office

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