U.S: Department of Justice

United States Attorney

District of Arizona

Two Renaissance Square

40 N. Central Ave„ Suite 1800

Phoenix, AZ 85004-4408

VIA EMAIL November 29, 2018

Mike Piccarreta, Esq.

Piccarreta Davis Keenan Fidel PC

2East CongTess Street, Suite 1000

Tucson, AZ 85701

Re: Your Letter of Octobef° 26, 2018

Dear Mike:

Main: (602) 514-7500

Main Fax: (602) 514-7693

Direct Fax: (602) S14-7450

We wish to respond to your October 26, 2018 letter. The letter requests disclosure of

Brady material and appears to be a standard letter that you send prosecutors in other cases with

a few categories specific to this case. ~1 Brady determination in this case, however, is

particularly difficult based on the defense theories that the joint defense has advanced in

pleadings (in this case and others), correspondence, and meetings with the prosecution team.

As you well know, you and other defense counsel have repeatedly asserted that the

activities on the Backpage.com website, including the conduct detailed in the Superseding

Indictment, was somehow immunized by the First Amendment and/or Section 23Q of the

Communications Decency Act ("CDA"). We disagree. First, Section 230 of the CDA does

not apply, on its Face, to a federal prosecution. 47 U.S.C. § 230(e)(1) ("Nothing in this section

shall be construed to impair the enforcement of ... [any] Federal criminal statute."). The

defense has not provided any counter-arguments to this position. Second, the evidence

demonstrates considerable content creation on the part of the principals and employees of

Bacicpage. The following three activities constitute, at a minimum, content creation by

Bacicpage:

1Vloderation: Backpage engaged in the practice of sanitizing ads by editing them—

specifica~ly, removing terms and pictures that are indicative of prostitution and then publishing

a revised version af'the ad. Unfortunately, this also included child sex trafficking victims.

Aggregation: This was accomplished by identifying prostitutes advertising on other

similar prostitution websites. Backpage would then post a free ad and contact the pimp or

prostitute and solicit them to Bacicpage with the incentive of a free ad for six weeks or with

similar financial incentives.

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Reciprocal Link and Affiliate Program: This refers to Bacicpage's business

arrangement with a website known as The Erotic Review (TER). Backpage and TER posted

reciprocal ads on each other's websites. As you know, TER is a website that allows clients of

prostitutes to provide written reviews of the prostitutes' various attributes. By inserting TER

link in particular ads, Backpage was manipulating or creating content. In addition, Backpage

entered into a financial arrangement with a person known as "Dollar Bill" who earned lees in

return for arranging for numerous prostitutes and pimps to post ads on Bacicpage.

In Light o f the above, we do not share your view that there "is abundant information in

the government's possession and/or generated by the government that is favorable and

exculpatory to the defendants." Quite the opposite. It is noteworthy that neither you nor any

of the other defense attorneys, in any of the pleadings and correspondence filed to date, have

made any effort to address the above areas of content creation —all of which are described in

detail in the Superseding Indictment. Nevertheless, we will attempt to address your Bradv

requests.

First, as set forth in the October 29, 2018 response to your letter ("USA response")

requesting the inadvertently disclosed material, again we do not agrEe with your general

assessment that there is an abundance of Brady material. As a reminder, we met in December

2017 and explained our legal theory, provided incriminating emails exchanged by your client,

and identified witnesses that will be testifying against your client in a pending prosecution. In

response, you asked that your client be providedrmmunity (this suggests that you recognized

he had criminal exposure) but never provided any evidence that contradicts the emails and the

witnesses expected to testify against your client. Instead, you took the position that your client

maintains he had a First Amendment right to his activities at Backpage and alternatively, did

not have the mens rea to commit the specif c offenses contained in the indictment. Again, you

have neither provided us any authority in support of that legal theory nor any counter evidence.

And, that exchange occurred before both Bacicpage CEO Carl Ferrer and Bacicpage Sales and

Marketing Director Dan IIyer agreed to cooperate and testify against your client and the

remaining defendants.

Second, your request involving 2Q 10 statements from Francey Hakes regarding whether

Craigslist could be held criminally liable for content in their adult section eight years ago is

not relevant to the Superseding Indictment in this case for several reasons. First, it is important

to appreciate the distinctions between Craigs~ist and Bacicpage and what 11as occurred since

2010. Craigslist voluntarily shut down its adult section, presumably recognizing that it faced

exposure to both criminal and civil liability for facilitating prostitution. Second, and more

importantly, we are u7laware of Craigslist engaging in the same business practices that

Backpage employed to increase revenue from prostitution ads. For example, Craigslist did not

have similar moderation practices employed by Bacicpage (e.g., stripping out words ar terms

indicative of prostitution and then posting the ads (including ads indicative of child sex

trafficking), etc.). We also have no evidence that Craigslist engaged in the solicitation. and

"aggregation" of prostitution ads from a competing prostitution websites. Furthermore, we

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know of no financial relationship between Craigslist and "Dollar Bill" or someone similarly

situated. As you know, in an email exchange bettiveen your client and another Backpage

employee, "Dollar Bill" was characterized as a "super affiliate" who received considerable

fees for arranging for prostitutes and pimps to post ads on Backpage. {See Superseding

Indictment, ¶~( 60-62.) In a related email, your client directed that 4200 [prostitution] ads

posted by Dollar Bill be reinstated. (Id.) Finally, Craigslist did not have a financial relationship

with the website TER or a similar site.

~'hird, we are also unaware of Craigsiist engaging in activities designed to circumvent

conventional banking and credit card processing to disguise the true nature of their adult

services category. In contrast, Backpage was conspiring with others (e.g., "Dollar Bill", TER,

and numerous other obvious pimps to facilitate prostitution. In short, whatever position a DOJ

representative might have taken 10 years ago regarding the mens rea required by a website

operator has little relevance to this prosecution. Lasl:ly, the statement that you attribute to Ms.

Hakes also predated the successful prosecutions of myRedBook.com, Rentboy.com,

escorts.corn and Ross Wiliam Ulbricht (the "Si11c Road" prosecution). It is noteworthy

that the defense, here, has made no meaningful attempt to distinguish the successful

prosecutions of these websites from the activities engaged in by Bacicpage.

Nest, you cite to a statement in the Congressional record that is relevant to concerns

about legislation proposed to combat sex trafficking on prostitution websites similar to

Backpage by State and local pr~oseczctors. This is in the context of the application of the CDA.

Yet this federal prosecution is exempted from the restrictions of the CDA. That was the point

of the legislation referenced in the Congressional record—to allow states to prosecute websites

like Backpage in the same manner a federal prosecution can be achieved. But again, the

Backpage employees that are cooperating acknowledge that the Backpage defendants knew

for years that they were facilitating prostitution, and the internal emails and public statements,

of Lacey and Larkin bear this out. Even James C. Grant, representing Backpage in the Arizona

federal grand jury litigation, conceded that if the website knew "through participation in a

venture, you're conspiring with somebody, you know they pasted an ad, you know the person

involved is underage [of course, the illegality of prostitution_ is not limited to underage sex

trafficking victims] that's a prosecutable crime..." (GJ RT 2/22/17, p. 38) Here, because of

the aggregation, affiliation and reciprocal link ventures and other conduct summarized above;

Backpage knew that eves y ad had the potential for facilitating prostitution services, including

child sex trafficking.l

F'ou~°tlz, you cite a nearly forty-year old, out-of-circuit civil case,that stands for the

proposition that a federal court can enjoin a state cou~~t pt~osecutior~ if it was brought for

1 As with our prior correspondence, the discussion in this letter is not meant to be an

e~austive statement of the reasons why the.apparent defenses referenced by the joint defense defense team to date lack merit, particular)y in view of the limited amount of information known so far about De~'endants' theories and defenses.

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improper purposes. Fitzgef~ald. v. Peek, 636 F.2d 943, 945 (5th Cir.1981} (``conduct allegedly

retaliated against or sought to be deterred is constitutionally protected and that the state's

bringing of the criminal prosecution is motivated at least in part by a purpose to retaliate

against or deter that conduct, and the state fails to show that it would have decided to prosecute

even had the impermissible purpose not been considered."). This case has no relevance to the

facts here and it does not even stand for the proposition that you are apparently citing it for.

namely a discovery requirement. Although your request is based on mere speculation you

are—in a manner of speaking—barking u~ the wrong tree. Categorically no such evidence

exists. We are aware that Larkin and Lacey have publicly decried the late Senator John

McCain and his wife Cindy as the architects of the federal Backpage prosecution, arguing that

this case is politically motivated. The decision to investigate Bacicpage that resulted in the

Superseding Indictment wa.s made by the United States Atl:orney's C?ftice in the District of

Arizona, the DOJ Criminal Division, and no one else. The same analysis applies to your

overly-broad request contained in paragraph 5.

Fifth, you are requesting all documents and commendations from law enforcement to

Bacicpage relating to Bacicpage's cooperation in any criminal investigation. (Your Octoher 26

letter, ~~ 6,7,1 ~ .) This request is unclear for several reasons. If you are asking for all

subpoenas issued to I3ackpage in the course of state and federal investigations where Bacicpage

complied with subpoenas, we do not share the view (nor is there any legal support) that this

would be Beady material. Bacicpage was merely complying with a court order. Moreover,

any doc~.unents or testimony at a trial or a hearing provided by Bacicpage in response to a

subpoena would be in' furtherance of court-ordered compliance. This isn't exculpatory—it's

just avoiding contempt.

You also seek commendations Backpage received from law enforcement. These aren't

Beady material either. Backpage was engaged in a veneer of cooperation with law

enforcement. They hid their true business model that included moderation, aggregation, and

afFiliated programs. Moreover, after banks no longer would do business with Backpage they

concealed payments from pimps posting prostitution ads and concealed Backpage as the payee,

etc. We expect that at trial former Backpage employees (including but not limited to Ferrer

and Hyer) wi11 testify that Bacicpage's business model was concealed from law enforcement

in variety ofways. We also expect at trial that law enforcement, including those tha#provided

commendations to Bacicpage, will testify that ha.d they known of Baekpage's actual business

practices (e.g., stripping out words and posting the ads, inserting the link to TER, etc.) and

financial relationships (e.g., affiliated relationships with "Dollar Bill" and others, etc.) the}J

would not have provided the commendations. In sum, we do not view commendations from

law enforceinerlt as Brady material.

Sixth; without providing any authority, you demand various communications between

the prosecution team and attorneys representing cooperators, various law enforcement

agencies, civil attorneys representing victims, NCMEC etc. (Your October 26 letter, ~~( 6-11)

Without more, it is difficult to respond to such a request. Although you have provided some

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'authority for other requests (which we do not concede are necessarily on point), you provide

no authority for this overbroad request. In short, this appears to be a wish list, based on

speculation, in an effort to engage in a fishing expedition.

Seventh, you request all documents to and from Backpage and NCMEC relating to

possible unlawful activity involving underage individuals. (Your October 2b letter, ¶ 10.) )It

is unclear what you mean by "documents" nor do you articulate why you believe these are

exculpatory. In any event, if you are asking for emails between Backpage and NCMEC, those

are readily available based on emails we received via search warrants and subpoenas. They

are also contained in the PSI Appendix, which is available on the U.S. Senate website. Any

other documents we received from NCNIEC has been provided or will be provided based on

the scheduling order.

Eight, paragraph 12 of your October 26 letl:er requests internal Justice Department

memoranda "relating the understanding of the applicable law government I3ackpage." Again,

you provide no authority for this request. And, case law makes clear that material

encompassing only an attorney's mental impressions or legal theories does not constitute

Beady. See, e.g., Mo~Nis v. Ylst, 447 F.3d 735, 742 (9th Cir. 2006}. "Extending the Brady rule

to opinion work product would greatly impair the government's ability to prepare for trials."

Ia'. Indeed, "if opinion work product were accessible by opposing counsel `much of what is

now put down in writing would remain unwritten."' Williamson v. Moore, 221 F.3d 1177,

1 182 (11th Cir. 2000} (quoting Hickman v. Taylof•, 329 U.S. 495, 511 (1947)).

Ninth and last, paragraphs 4-31 make various general Brady requests, non-specific to

this case, citing some authority (mainly from the 1980s). We will examine your specific

requests and, to the extent we have information covered by the requests and supported by the

cases you cite, we will make it available. Finally, in the event you are unsatisfied with our

responses to your October 23 and 26 letters and file a discovery motion, please include our

responses to both letters as attachments so the court has an understanding of our efforts to be

responsive to your various requests.

Sincerely,

ELIZABETH A. STRANGE

First Assistant U.S. Attorney

District of Arizona

s/Kevin Rapp

KEVIN M. RAPP

Assistant U.S. Attorney

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