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UNITED STATES DISTRICT COURT

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UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

_________________

United States of America, )

) No. 2:18-cr-00422-DJH

Plaintiff, )

)

vs. ) Phoenix, Arizona

) November 1, 2023

Michael Lacey, et al. ) 9:01 a.m.

)

Defendants. )

_____________________________ )

BEFORE: THE HONORABLE DIANE J. HUMETEWA, JUDGE

REPORTER'S TRANSCRIPT OF PROCEEDINGS

TRIAL - DAY 28 - A.M. SESSION

Official Court Reporter:

Hilda Elizabeth Lopez, RMR, FCRR

Sandra Day O'Connor U.S. Courthouse, Suite 312

401 West Washington Street, Spc 30

Phoenix, Arizona 85003-2151

(602) 322-7256

Proceedings Reported by Stenographic Court Reporter

Transcript Prepared by Computer-Aided Transcription

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A P P E A R A N C E S

For the Government:

UNITED STATES ATTORNEY'S OFFICE

By: Mr. Kevin M. Rapp, Esq.

Mr. Peter S. Kozinets, Esq.

Mr. Andrew C. Stone, Esq.

Ms. Margaret Wu Perlmeter, Esq.

40 North Central Avenue, Suite 1200

Phoenix, Arizona 85004

kevin.rapp@usdoj.gov

peter.kozinets@usdoj.gov

andrew.stone@usdoj.gov

margaret.perlmeter@usdoj.gov

For the Government:

UNITED STATES DEPARTMENT OF JUSTICE

By: Mr. Austin Berry, Esq.

1301 New York Avenue, NW, 11th Floor

Washington, DC 20005

austin.berry2@usdoj.gov

For the Defendant Michael Lacey:

LIPSITZ GREEN SCIME CAMBRIA, L.L.P.

By: Mr. Paul J. Cambria, Jr., Esq.

42 Delaware Avenue, Suite 120

Buffalo, NY 14202

pcambria@lglaw.com

For the Defendant Scott Spear:

FEDER LAW OFFICE, P.A.

By: Mr. Bruce S. Feder, Esq.

2930 East Camelback Road, Suite 160

Phoenix, AZ 85016

bf@federlawpa.com

- and -

KESSLER LAW OFFICE

By: Mr. Eric Walter Kessler, Esq.

6720 N. Scottsdale Road, Suite 210

Scottsdale, AZ 85253

eric.kesslerlaw@gmail.com

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For the Defendant John Brunst:

BIRD MARELLA BOXER WOLPERT NESSIM DROOKS

LINCENBERG & RHOW, P.C.

By: Mr. Gopi K. Panchapakesan, Esq.

Mr. Gary S. Lincenberg, Esq.

1875 Century Park E, Suite 2300

Los Angeles, CA 90067

gpanchapakesan@birdmarella.com

glincenberg@birdmarella.com

For the Defendant Andrew Padilla:

DAVID EISENBERG, P.L.C.

By: Mr. David S. Eisenberg, Esq.

3550 North Central Avenue, Suite 1155

Phoenix, AZ 85012

david@deisenbergplc.com

For the Defendant Joye Vaught:

JOY BERTRAND, ESQ., L.L.C.

By: Ms. Joy M. Bertrand, Esq.

P.O. Box 2734

Scottsdale, AZ 85252

joy@joybertrandlaw.com

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P R O C E E D I N G S

(Proceedings commence at 9:01 a.m.)

(Juror No. 7 is present via Zoom)

THE COURT: Good morning. Please be seated.

MS. BERTRAND: Good morning.

THE COURT: Well, we have another juror, Juror No. 7

has tested positive for COVID. We have -- we have also, and I

will just tell you that we have a number of jurors who are not

feeling all that well, but the remainder of the jurors have

shown up.

Juror No. 7 has indicated her ability to appear by

Zoom. We're prepared to have that happen, and what I would

suggest is the following process: That we conclude with the

closing arguments today, and that we, however, not have the

jury begin deliberations until next week. We can select the

alternate jurors before we leave today. That way if Juror No.

7 happens to be chosen as an alternate, then that would, I

think, cure some of the potential issue.

Now, thinking about this a little bit clearer, if she

is selected, then there's no reason that they couldn't begin

their deliberations today. If she remains on the panel, then

they wouldn't begin their deliberations until Tuesday.

MS. BERTRAND: May I have a moment -- may we have an

opportunity to talk?

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THE COURT: In any event, that's how I propose that we

continue. I don't think at this point it's a good idea to

release another. That would only leave one alternate. And so

in any event, I do intend to finish with the summation

arguments today.

MS. BERTRAND: Okay.

THE COURT: All right. So --

MS. BERTRAND: May counsel have an opportunity to

talk?

THE COURT: Yes, you may have an opportunity to

discuss this. I'll give you about, you know, ten minutes, and

then I'll come back in and we'll have to then test the

equipment and make sure her equipment is available. But in any

event, I think that my sense is that if we have two jurors who

have tested positive for COVID, I feel certain that we, and we

have some individuals who are not feeling all that well, my

sense is it's probably the foregone conclusion that we have

more than one or more than two I should say that have this.

I'll let you meet and confer and I will be back in ten

minutes.

MR. LINCENBERG: Before we meet and confer, does the

Court have any information about the condition of Juror No. 7?

So when we were talking about the other juror, for example, the

Court gathered some information, the juror was foggy and so

forth, does the Court have any information about that juror's

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symptoms?

THE COURT: The only information I have is she's been

willing to continue and participate. All of the jurors have

been very attentive. This is the juror who sits second to the

last chair at the very back row.

MR. LINCENBERG: Was she the juror who was wearing the

mask yesterday?

THE COURT: Yes, she was wearing a mask yesterday, as

was the juror next to her, I think, because she was not feeling

well.

So in any event, I'll let you meet and confer.

MS. BERTRAND: Thank you, Your Honor.

COURTROOM DEPUTY: All rise.

(Court took a recess at 9:05 a.m.)

(Proceedings reconvened at 9:16 a.m.)

THE COURT: Please be seated, and I'll hear from the

government first and then whomever wishes to speak on behalf of

the defendants.

MS. PERLMETER: Your Honor, it is the United States'

strong preference is to have Juror No. 7 participate. In

hearing the closing arguments today, we ask that she be then

designated as Alternate No. 2 so that if the Court needs to

call her back at least she will have heard all of the case as

well as all of the arguments. That is our strong preference

because we would like the jury to have the ability to begin

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their deliberations as soon as possible.

Once the case has been submitted to them, they will be

able to choose their own schedule and begin deliberations this

afternoon, if they wish.

In the alternative, Your Honor, we ask that Juror

No. 7 be stricken for her illness.

Finally, Your Honor, we just wanted to note that Rule

23(B)(3) does allow the Court to allow 11 jurors to return a

verdict even without stipulation by the parties if the Court

finds that there's good cause to excuse a juror so that we

could go down to as few as 11.

THE COURT: All right. Who wishes to go from the

defendants?

MR. FEDER: Short straws appear to be my own. We

would ask that the Court treat this juror the same way the

Court treated the last juror and strike her. I mean, it would

be inconsistent not to do that.

THE COURT: Well --

MR. FEDER: There is all kinds of logistical issues

about the ability to deliberate. We're not going to agree at

least to remote deliberations.

THE COURT: I never suggested that.

MR. FEDER: That's our position. If the Court -- I

mean, the Court has gotten rid of two other people. This

should be the same.

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THE COURT: Well, I'm going to have Juror No. 7 appear

remotely for the remainder of the closing summation. I think

it's a better approach than to release the entire jury once the

government's rebuttal is complete. I'll give them the

admonition and have them return on Tuesday morning, and then

I'll remind them of a couple of logistical juror instructions,

select the alternates at that time, and let them begin their

deliberations then. That way, because now we know that we have

COVID present in the jury deliberation room, they are in a --

it's not a large room by any means.

And as I mentioned, and I think some of you saw that

there are a couple of them that have been blowing their noses

and so on and so forth, and I think for them to get better is

the best course of action so that they are all clear-minded.

And if by chance someone else has COVID, then they would be

within that quarantine period. And so that's how we would -- I

think we should proceed.

MR. RAPP: Can I just inquire, Judge, is there a

reason why they couldn't come back on Monday? Obviously the

Court I realize is handling their own calendar, but it seems

like they could commence deliberations on that day. I didn't

know if the Court was taking into account a five-day quarantine

time period or, because next week is a short week because of

the Friday holiday.

THE COURT: Well, I mean, the difficulty there is they

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signed up for Tuesday through half day Friday, and so I know

that there are a number of jurors who are reporting to work on

Monday, and so that -- I think that's the better course so that

they would not begin their deliberations until Tuesday.

MR. BERRY: Is there a concern, Your Honor, about

delaying deliberations until next week given that we only have

this jury until the 9th and we still have forfeiture as opposed

to trying to encourage the deliberations to begin sooner rather

than later?

THE COURT: There's multiple concerns. You know, I

I'll be very honest with you, I mean, these are -- we delayed a

week for COVID. We obviously have had jurors not show up on

time and so on and so forth, but, you know, we can't predict

when these sorts of things are going to occur, and I certainly

don't want to force the jurors to be in a situation where they

now know that there's the presence of COVID amongst them, that

they have been exposed and now they are continuing to have that

exposure in the deliberation room. I have a sense that they

probably all be very relieved if they could leave and attend to

their own health concerns.

MS. BERTRAND: And that raises two points, if I may be

heard, Your Honor. The first is I have concerns about being

exposed to people that may have COVID. I mean, we had one go

down yesterday. We are going to lose one today. That leaves,

what are we down to, 13. I have concerns. I have a family

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member that takes methotrexate, which is an immune-suppressing

drug, and I have concerns about asking these poor folks to come

in here and sit all morning next to each other listening to

closings when they want to get home and deal with their health,

and they are already not feeling well.

We noticed juror, I think it's 12, yesterday couldn't

keep his eyes open. I mean, maybe that's our fault, but it

also could be he's sick. So I think that's -- and in terms of

when this trial ends, my understanding is we screened this jury

sitting here, not the first set of questionnaires that went

out, but we screened this jury to be able to go until

November 17th if that ended up being necessary. So I don't

think that time can be a concern. But even if it was a

paramount concern, the bigger concern is the health and

well-being of both these jurors and every person sitting in

this courtroom.

That's the concerns I want to raise with the Court,

and I guess that would prompt us to say, do we want to close

next week? Of all people to say this, I am the last person to

say I want to wait some more, but I also don't want these folks

sitting here glaring at us angry that they have to sit here and

listen to this when they want to get home and get away from the

cootie pool.

THE COURT: Well, they've been very attentive despite

their various health issues, and I don't think that sitting

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through two additional summations will push them over the edge.

I don't think so. They've been very diligent and attentive,

and I certainly know that they are the type of jury that if

they wanted to go home, they would have let my courtroom deputy

know that, and any single one of them would, and so I do think

it's the better course to -- well, let me -- Mr. Feder, you

didn't address this additional position that the government put

forward regarding designating Juror No. 7 as an alternate.

MS. BERTRAND: I can address that, Your Honor.

THE COURT: Yes.

MS. BERTRAND: I think the defense decided we object

to that too; that this should be treated consistent with the

other two jurors who have been sent home and with no -- using

this juror as one of the alternates or anything like that.

This juror goes home or the jury stays, and we prefer the juror

jus go home, or be home and stay home and be excused.

THE COURT: Well, you know, to that point, those were

different circumstances, and even yesterday was a different

circumstance. We had no idea that this was going to occur,

that we would have the diminishing alternate jury pool, and

they -- the release of the prior juror we were trying to

accommodate her, but apparently the juror was released over the

request or at the request of the defense counsel.

And so I think this is the way that we're going to

proceed. We'll have our Juror No. 7 view the last two

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remaining arguments. I will release the jury with the

admonition, and then bring them back on Tuesday, remind them of

a couple of housekeeping jury instructions, select the

alternates, and then have them begin the deliberation.

I'm going to put aside for the moment the forfeiture

issue because I'd like to set aside time because I have some

questions about that, and so that's how we will proceed. We

will need some time to set up that equipment, get it tested,

make sure that she's able to connect and hear everyone, and

that should take us roughly ten minutes or so. We have our IT

person here available.

MR. STONE: Your Honor, when are you thinking about

setting aside time to discuss forfeiture issues?

THE COURT: Tomorrow. I will have you back tomorrow.

I need to look at a couple of items, so just -- I just received

your briefing yesterday, so we'll do that tomorrow. All right.

So we will test that equipment. That will take us about, like

I said, ten or so minutes to get her situated and then bring

the jury in.

(Recess was taken at 9:28 a.m.)

(Proceedings reconvened at 9:57 a.m.)

THE COURT: All right. Please be seated. And we'll

have the jury in.

(Jury is present.)

(Juror No. 7 appears by Zoom.)

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THE COURT: All right. Please be seated. And welcome

back, members of the jury. As you can see, we are being joined

virtually by one of your members. That is so we can continue

on without too much interruption. After the summation argument

I will describe to you how it is we are going to proceed for

the remainder of the trial.

With all that said, I want to just make sure that our

juror who is appearing virtually you can hear me. Thumbs up.

Okay. Thank you.

All right. Ms. Bertrand, you may proceed.

MS. BERTRAND: Thank you, Your Honor.

Good morning. Nothing is more frightening than a

prosecutor stating that they have the right or entitlement to a

jury, a guilty verdict. And combined with the fact that this

particular prosecution seeks to turn the First Amendment on its

head, this prosecution gives me chills and not in the fun,

spooky Halloween way.

History has taught us that crusades are incredibly

dangerous. They wrap up in even the most well-intentioned

innocent people, and this trial is the result of an

antiprostitution crusade. Powerful politicians and religious

leaders would accept nothing less than Backpage's complete

shutdown despite them being on notice that their efforts

offended the First Amendment. Make no mistake about it, some

of the most powerful politicians in the country leaned hard on

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Backpage.

Ms. Ellig, can you please show Exhibit 902? Please go

to the signature page of 902.

Richard Blumenthal, now Senator Blumenthal;

Tom Corbin; Chris Koster; Jim Hood; Lisa Madigan, Attorney

General of Illinois.

And Ms. Ellig, can you please show the jury

Exhibit 52? Could you please show the signature pages?

We have more on this one, Richard Blumenthal;

Joseph R. Biden the III.

On the next page, Ms. Ellig.

More powerful people, Greg Abbott, Attorney General of

Texas. And in addition to these powerful people, we have NCMEC

pushing their agenda on Backpage; we have Polaris; the Auburn

Theological Seminary, and ultimately you heard some back and

forth, the United States senate.

And Backpage's response to these demands is set out in

Exhibit 171 after the letter from NCMEC is Backpage's response.

In essence it's this: First Amendment protections for

platforms of speech, for publishers, are different from what

they are for regular people. And here Backpage starts as part

of a newspaper. There's a reason why we call the press the

Fourth Estate in the United States, because the press has a

critical role in telling the people what they need to know

about their government, in giving them the ability to be

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educated, reasonable rational voters so that they can

participate in this democracy.

And as part of that, Backpage could not adopt the

demands of the powerful and elite, at least not wholesale

because that violated the First Amendment. And what I mean by

that is, and you have an instruction about the First Amendment

protecting speech. Speech on these platforms is presumed

protected. The only time the government can start to regulate

it is when it is the speech on the page is explicitly,

patently, obviously for criminal conduct, and that means as you

look at it, not once you meet the person who wrote it and they

tell you all about themselves and how they got that point.

From the reader looking at it, does it explicitly propose a

crime?

And I fully expect -- I am sorry, this mic is goofy,

Your Honor.

I fully expect the government to get up in their

rebuttal close and say something like to the effect of: Well,

you can't tell all these coded language. Obviously --

obviously, folks, this was criminal conduct. Well, you know,

we've heard this whole "You can tell about women" many times

before.

When I was a little girl I didn't have red shoes. I

didn't buy my first pair of red shoes until I was in my 30s

because I was raised that only whores wore red shoes. So it's

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actually kind of an act of rebellion for me to get my first

pair. As you can see, I've given them a lot of use, but that's

not enough. And you know what else is not enough is what every

one of these law enforcement officers got up and told you, it's

not enough to look at an ad. You can't tell. So we have no

idea what is going to happen with that transaction if a

transaction occurs.

And you can't tell because she's provocatively dressed

or because she uses, to the extent it's even a she, provocative

language. All that is facially legal for the publisher. You

want to go after the speaker and look into it more. You think

it's a good lead, have at it. We'll help you, but don't come

to a publisher and tell us to sensor our speech. That's where

we draw the line.

In fact, the government didn't want you to hear, I

jumped up and down in Mr. Cambria's argument, Backpage did

respond to NCMEC and said, "We'll work with you. We want to

work with you. Let's develop national standards for these

platforms. So it's not just us doing it. Everyone knows what

the deal is, TikTok, Facebook, back in the day MySpace. Today

that would include Pinterest, OnlyFans, Amazon. We'll work

with you, but we have to draw the line at what the First

Amendment prohibits.

But that wasn't enough for the abolitionists. It was

their way or the highway.

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Ms. Ellig, can you move the PowerPoint to slide two?

During voir dire, and at a couple moments during this

trial you've been asked two critical questions, almost a

mantra. Can you be fair and impartial and can you follow the

law? And you all have said repeatedly, yes. Stop asking me.

Yes. To be clear, when you are asked, "Can you follow the

law?" That doesn't mean, can you do what the government tells

you to do. It means, can you follow the law as it is

instructed to you to include insisting that this government,

this prosecution, prove their case beyond a reasonable doubt?

It is an incredibly high standard, and it's high standard on

purpose.

Whenever you can say in this case, well, for all we

know, it could maybe have been different from what the

prosecutor says, I submit to you that's reasonable doubt. If

you can say it without abandoning reason, without abandoning

your rational thought. The prosecution has to rule out every

one of those for all "we knows."

Ms. Ellig, can you move the PowerPoint slide three?

Here's the instruction. Not going to read it to you.

You can read it. What this means in simple terms is a

reasonable doubt is a juror using reason or logic could believe

the doubt might be true. And each of you must accept a

reasonable doubt until logic rules it out. There must be no

logical way for the reasonable doubt to exist.

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And size, I mentioned this in my opening, size doesn't

count. Reasonable doubt doesn't mean moderate doubt. It

doesn't mean we can all come to a consensus about this. It

means any doubt that is reasonable. A tiny doubt based on

reason is still reasonable doubt. It's about logic; not

weight. A featherweight doubt is a reasonable doubt; a

featherweight O-ring blew the space shuttle Challenger; a World

Series can be won by an inch; an election by a single vote. A

firm belief is not even enough to convict when accompanied by

reasonable doubt.

Here's an example. I will give you two examples while

we talk this morning, and here's the first one. When my

stepson was a little guy, he loved Halloween. Now he is too

cool to talk to us, but when he was little he loved Halloween.

And I've lived in my neighborhood for a long time; knew my

neighbors. We had keys to each other's houses, knew each

other's pets. So when he was little, he would last half a

block down and half block back and he is done. He wants to eat

his candy. I knew everybody. I trusted them. They trusted me

with their kids. So when he brought his basket home, "You can

have three. You can have three pieces, buddy."

But as he got bigger, his range of trick-or-treating

got wider, and all of a sudden we are going around the block.

I don't know who moved into that rental down the street.

That's an airbnb now. God help us. Buddy, I need to look

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through your candy before you can have some. I need to be

sure, because at that point I had a reasonable doubt. I don't

know who these people are. I don't know if I can trust them.

I don't know that the candy is sick, so let me check and then

you can have your three pieces.

The judge has given you long instructions. And

here -- we're here to determine the government's case. The

prosecutor's case is on trial to determine if they can overcome

reasonable doubt, and I suggest to you that the instructions

from the Court lead you to reasonable doubt.

Ms. Ellig, can you please advance to slide four?

First let's talk about cooperators. You get two

separate instructions about cooperating witnesses.

Would you please move to PowerPoint slide five?

You heard evidence that Carl Ferrer, a witness, made

prior statements under oath that contradicted his testimony

here. It's up to you to decide how much weight to give that.

Well, I suggest that your first reasonable doubt is that

instruction. At some point he's lied. You say two things that

contradict themselves under oath, that's a lie. Which lie it

is? I don't know, but I can tell you it's a problem, and it

shows us that we cannot trust a word that comes out of

Carl Ferrer's face. That is reasonable doubt.

When it is the witness that this prosecution had up

talking to us for three weeks, four weeks, the witness that

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this government has bet the farm on lied. So for all we know,

this was a lie.

Would you please move to PowerPoint slide six,

Ms. Ellig?

In evaluating the testimony of Mr. Ferrer and

Mr. Hyer, consider the extent to which their testimony may have

been influenced by other parties. And who are those other

parties? The United States Government.

For all we know, Carl Ferrer had 500 million reasons

to lie to you. Let's remember, he bought Backpage for over

$500 million. He owed $500 million to the seller. It was a

seller-financed sale. The government comes along after

Carl Ferrer ran Backpage into the ground, barely could make

payroll, which he didn't tell his employees about either, and

says: We'll cut you a deal. Not only will we give you some

leniency with your sentencing, but your money can go into your

attorney's trust account. And in addition to keeping a bunch

of stuff -- I apologize for this, I don't know, whatever -- you

get to keep a bunch of stuff and you get to keep the money, and

at the end of the case, just give the money to the government.

Getting you off the hook with the sellers.

And when it comes to Ms. Vaught, for all we know the

guy never met her. Let's remember, when he was testifying he

couldn't even say her name correctly. He called her Joyce.

When asked to pick her out in the courtroom, let the record

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reflect I am blonde, somewhat, Ms. Vaught, also blonde, was

sitting next to me, he looked to me like he was using more the

powers of deductive reasoning --

MR. RAPP: Objection; improper argument.

THE COURT: And I will overrule the objection, and the

jury will use their recollection of what occurred.

MS. BERTRAND: He was guessing. There are only two

women sitting back there and we are both blonde. So for all we

know, Ms. Vaught wasn't involved in any of Carl Ferrer's

shenanigans to the extent shenanigans occurred.

Please advance to slide seven of the PowerPoint.

The Court's conspiracy instructions also lead you to

reasonable doubt.

Would you please move to slide eight?

An agreement between two or more persons to commit at

least one Travel Act offense. To be clear, you have to all

agree as to each defendant sitting behind me that each one of

them knowingly joined this agreement, this agreement to break

the law. You can conspire to throw someone a surprise birthday

party. That's not a crime. This conspiracy requires an

agreement to break the law and that each person joined it in

the first place, knew it was going on and said, "Put me in."

As to Ms. Vaught, the prosecution's case has

reasonable doubt. For all we know, there was no agreement.

And for all we know, this has all come in from Carl Ferrer

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trying to save his skin. For all we know, the millions of

dollars Backpage invested in moderation shows he didn't agree

to anything of the kind, especially the moderators.

This moderation was designed to undercut the same

conspiracy Ferrer says occurred, and how do we know that? We

got the moderators going through the ads at various times by

different methods catching a bad act, catching one of the bad

actors, pulling the ad. And then who fixes it? Not

moderation. Moderation doesn't get the complaints. Sales and

marketing does. You heard that from Dan Hyer. The two do not

meet.

So the moderators are over here and, yes, there is a

lot of work. I believe the prosecution referred to it as the

engine room of Backpage. I think it's fair to say it was a

sweatshop. I don't know if I would say it's the engine room of

this company. This group of people doing this nearly

impossible job, doing their imperfect best to do what they

understood allowed Backpage to function legally. Whatever they

are doing over in marketing is on Carl.

Reasonable doubt six, excuse me, four. This is a

four. Carl Ferrer displayed his FBI award in his office. That

came from Carl. It would certainly be reasonable, rational for

one of his subordinates working in moderation to think they

must be on the up and up. Carl got an award signed by Robert.

Would you please advance to slide nine, Ms. Ellig?

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Oh, sorry next one, slide ten.

The defendant became a member of the conspiracy

knowing that at least one of his objects intended to help

accomplish it. Reasonable doubt seven, excuse me, six.

Reasonable doubt, next one. They haven't ruled out the

possibility that Ms. Vaught joined this company understanding

her job was to police the Backpage adult section for illegal

sex-for-money ads, for patently illegal ads, in opposition to

the promotion of any criminal conduct.

Let's remember, Ms. Vaught is hired as part of this

wave of moderators when the big Craigslist -- Craigslist -- I

don't know what you want to call it -- exodus was occurring.

There is nothing in this record that shows there wasn't any

side deals, any wink of an eye, go through and go through all

this litany of ads everyday to promote anything improper or

illegal. There's no indication that when she was hired they

are like, this is what you're going to do, but we all know what

is really going on. None of that. And Ms. Vaught was so

diligent about her job, answering emergencies for the police,

assisting in the response to 20,000 subpoenas, getting thank

you's -- Backpage getting thank you's for helping.

It is rational. It is reasonable to believe that

Ms. Vaught didn't join any criminal conspiracy, and they

certainly can't rule out that Ms. Vaught took a job placing the

site seriously.

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Ms. Ellig, can you show Exhibit 6257. Here's an

example. Colleen is one of the moderators. And Ms. Vaught

comes in, is looking on April 3rd, 2014, reviewing Colleen's

work and saying, "You're missing stuff. Slow down. Pay

attention. This is the kind of thing that gets someone fired."

And that's consistent with Dan Hyer saying no one got fired

because they edited, not edited, moderated too many ads. There

is no incentives for the moderators to do anything but strictly

follow the rules they were given.

If you can show 6258, please.

This has been going on with Colleen for a while. This

is two months earlier, or a month and a half earlier, "Colleen,

finding some pretty bad violations in the ads you approved.

Not the ones you knocked out, the ones you approved. Please

slow down and read carefully. There is not much room for

mistakes." Does that sound like someone is like, Colleen, let

whatever goes through go through. You know what we're all here

for? Not at all. She is threatening to fire someone for

missing illegal ads.

Please show the 1217 exhibit.

And here you have Mr. Padilla saying, hey, "great job

catching bad stuff," and not "great job letting bad stuff in."

If you look down about three-quarters of the way down the page,

"Please congratulate the crew for me. I think they are doing a

tremendous job keeping up with the volume," which we know was

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huge, "and removing the bad guys." That's directly counter to,

"Hey, we all know what is really going on, couple get through

here and there, makes the user happy." Not at all. They're

focused on catching the bad guys, at least in moderation. So

reasonable doubt six is, for all we know moderation thought

they were hunting bad guys.

Reasonable doubt seven, we'll get to in a minute.

Would you please -- let me back up. I apologize. And

we know Ms. Vaught helped law enforcement. Confirmed he saw

her at a convention. I mean, this starts to really stretch,

this idea that they are hiding in plain sight when you're

sending your moderators to law enforcement conventions to tell

them how they do their job, and the prosecution here hasn't

ruled out the possibility. Ms. Vaught believed that she was

helping them.

You heard Jeff Adams say, I believe, one of the most

rewarding parts of his job was working in moderation and

assisting law enforcement. That is directly contrary to

someone whose knowingly joined a conspiracy to violate the law.

So reasonable doubt seven is she helped law enforcement. Well,

we will get to that in a minute.

Ms. Ellig, could you please advance to the next slide?

Thank you. And the next one, please.

My colleagues have touched on this here. It's really

important for Ms. Vaught. It's not enough that she said -- she

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may have said, we already know she did that, that she discussed

matters of common interest like moderating, how we are going to

moderate, the new rules that we must follow, these rules

changing sometimes on a daily basis, rules coming from Internet

security and safety experts like Hemanshu Nigam. It's not

enough, and yet that's exactly what underlies the prosecution's

theory about Ms. Vaught of, well, she was there; she must have

known. Clearly she is part of this.

It's not clear at all because reasonable doubt eight

is, what plan do they say Ms. Vaught joined? And we haven't

ruled out the possibility there was no plan.

And reasonable doubt 11, sorry, my numbers are off.

Reasonable doubt nine, all this assumes that Ferrer had

concocted a plan, and that is a big "if." This whole story of

a plan and a conspiracy comes after the Feds arrest him and

charge him, not during, especially not as it pertains to

Ms. Vaught.

So there is a rational possibility, a very real

possibility, that Ferrer, if he did have some plan, never told

the moderators about it. He left them in the dark. He used

them. It's consistent with Dan Hyer saying moderation and

marketing were kept separately and that marketing can undo the

work of the moderators.

Would you move to slide 12, please?

Ms. Vaught has to be shown to have directly conspired

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with someone else in the conspiracy to carry out as to one of

the objects. Which object? She's going to this sweatshop

everyday trying to stay on top, playing whack-a-ball all day

with these people trying to cheat the system, trying to violate

the Terms of Use, trying to get around the rules.

Slide 13, please. And then Ms. Vaught had no reason

to know that the other conspirators were involved with those

whom the defendant directly conspired; in other words, she had

to know she was joining the same conspiracy as everybody else

is alleged to have joined, and that's true for each one that

they got to prove. So if there is other things going on and

other plans and schemes, we all have to agree on what the

scheme was and each one of these defendants joined it, and to

me that is a big doubt.

So reasonable doubt, what are we on, ten, is for all

we know, Ms. Vaught didn't join anything.

And you know, they make a big deal about what gets

through and the mistakes. And in reality is, and you heard

this story from everybody, moderation is not perfect. It's a

human process, and you got moderators coming in doing their

imperfect best everyday with a nearly impossible job. And we

note Ms. Vaught not only did her job in good faith, she did it

well, and we can't rule out the possibility Ms. Vaught was

doing it in good faith 'cause she believed in what she was

doing was righteous.

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And imagine the level of perfection being demanded by

the government in this case. By my count, you are going to

receive seven pages of instructions on what prostitution means

in each state, and that's before the prosecution asks you to

infer what might go on in Nevada, a state where prostitution is

legal in some areas. We can't assume. We cannot assume. We

cannot presume, we cannot infer that what goes on in Nevada

isn't a legal part of Nevada. We can't.

Let's talk about some of the other states. I will

compare four states and how different their instructions are.

Can you please show slide 14, Ms. Ellig?

This is Alabama. Part of prostitution requires a

natural or unnatural sex act or deviant sexual intercourse.

Again, all right, I don't know. You get instructions on this,

but that's a lot to guess about from the face of an ad.

Could you please move to slide 15, Ms. Ellig?

Here's Louisiana. Indiscriminate sexual intercourse.

So if you're discriminating about who you have sexual

intercourse for money, it's okay. I don't know from looking at

this. I am not licensed in Louisiana, but you can tell you

from the face of an ad, it would be impossible if someone was

going to engage in indiscriminate sexual intercourse. And

you'll notice even the definitions of "sexual intercourse" vary

from state to state.

Would you please show slide 16?

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Arkansas. It counts in Arkansas if you just touch

people through their clothes. How are you supposed to tell

that from an ad, from the face of an ad if you're the

moderator? You can't.

Could you please show slide 17?

Arizona includes this one, which fascinates me,

sadomasochistic abuse. It's one of the ways they can prove

prostitution. It means flagellation or torture by or on a

person who is nude or clad in undergarments, whatever those are

going to be, or in revealing or bizarre costume. Who decides

that?

What if it happened yesterday, who then is the arbiter

of what is the bizarre costume? I saw everything from a

Tyrannosaurus Rex to a little old lady last night

trick-or-treating. We don't know, and we certainly don't know

from the face of an ad what is going to happen behind the ad.

You certainly don't know as a moderator, and there is no

evidence that the moderators ever received instructions like

you're getting. None at all.

MR. RAPP: Objection; this is not in the jury

instructions.

MS. BERTRAND: Arizona is not? Okay. We will move

on. I thought this was included in the instructions. I pulled

it out of the instructions.

THE COURT: I recall reading something to this effect

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to the jury, so --

MS. BERTRAND: We will move on.

THE COURT: Thank you.

MS. BERTRAND: This is for Ms. Vaught, maybe the most

important reasonable doubt that you have. Government must

show -- this prosecution must show that this defendant had a

reason to believe that whatever benefits she might get from

this conspiracy, that we don't think she joined, probably were

dependent upon the success of the entire enterprise; that she

wins if they win.

And here your next reasonable doubt that they cannot

counter, is she had nothing to gain from this. She started at

Backpage making $13 an hour along with her fellow $13 an hour

moderators. She worked her way up because she was careful and

conscientious, and detail oriented. That was Ferrer's words.

And by the time Backpage was shut down nine years later, she

made less than one-tenth of what Carl Ferrer made between his

salary and his side hustle.

What in God's name did she have to gain from joining

this? I submit to you that they cannot rule out nothing.

In fact, your last reasonable doubt as to Ms. Vaught

is that the opposite was true for her, and you see that by the

way she talks to the moderators, "Your job is on the line if

you screw this up. If you don't catch these illegal ads that

we are trying and spending millions of dollars each year trying

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to catch, you're fired."

So after the government is done talking to you, you're

going to go deliberate. The Court is going to tell you how we

are going to do that given COVID concerns, but I'm going to ask

you to consider this with deliberations: Reasonable

conclusions can contradict. Each of you have a different world

experience that affects your reason and your rational thinking.

That's why we have jurors and not one person decide cases like

this. So people are going to weigh the evidence differently.

If another juror's best efforts to persuade you do not take

away your reasonable doubts, you can't convict. If the whole

group says guilty and you have reasonable doubt, you can't

convict. That's your sworn oath.

And if any other juror threatens you to vote guilty

and you are uncomfortable with that, tell the judge. It's that

important. In fact, you can stick to your doubt even if you

can't put your finger on it 'cause this is just wrong. It's

not enough. All you need is there is not enough evidence to

prove I am wrong about there being a reasonable doubt. They

haven't ruled it out. It's possible. And if it's your honest

belief, you have a right and duty not to compromise it away.

And your colleagues are allowed only to show you that

your honest belief is wrong, not to bully you or push you in

any way to change your mind. Deliberations are not bullying

sessions. You're jurors; not politicians. When you have an

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honest belief that there might be, just might be a reasonable

doubt, you're required to stand your ground. This might be the

most powerful you are in public life ever.

And just as important, don't try to get another juror

to convict in spite of his or her honest belief. Part of what

happens in deliberation that's so important and gets overlooked

so much is mutual respect, in talking to each other one on one

from a place of honesty and from the heart, and that can't

happen if one group is going to bully another.

And if you think that a reasonable doubt is based on

logic, then a reasonable doubt exists. Even if you don't share

it, even if your logic is different, 'cause you cannot convict

when a reasonable doubt exists. You have the right as a juror

to go home after this trial ends knowing that you've been on a

jury that followed the oath you personally took to obey the

law, especially this law about reasonable doubt. You must not

give it up to please anybody else, them, us, the Court, public

opinion. Your honest belief in this context is sacred under

the law.

And to be clear, we're the people. The government is

not the people here. When we created the United States, we

didn't transform ourselves into the government of the United

States. We created a government entirely separate from the

people. There's no use of the word "people." The Declaration

of Independence or the constitution makes the people the

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government. Quite the opposite.

To the Founders, the government and the people were

potential antagonists. That's why the Founders gave us

protections, the Bill of Rights; First Amendment, big one;

Second Amendment; Third Amendment we don't talk a lot about now

in modern times, but that prohibited the government from

quartering troops in your home without your consent. As you

can imagine in 1776, they found that particularly rude and

really important. Fourth Amendment, search and seizure, limits

government conduct; Fifth Amendment, due process; Sixth

Amendment that governs criminal cases, all limit the

government's power and the government's reach, all place the

constitution between you and the prosecution.

The entire purpose of criminal trials is to protect

people from the government, not from ourselves, and sometimes

we forget that. So let me remind you that this all -- this

whole American experiment starts with objection to taxation

without representation, and we fought and won our freedom

because Brittain, England was not governing us with fairness.

There were constant executions, jails were full. And in fact,

so many people were going to jail from England, they set up the

state of Georgia to be like Australia, to be a prisoner state.

They didn't have room to keep them all. And that was a

wholesale attack on the citizens and their civil liberties.

That's why we had the revolution.

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And since then throughout our history we have

thousands of men and now women dying in defense of those

constitutional protections. They are not to be taken lightly.

They are not technicalities. And one of those protections

guarantees that the defense doesn't have to prove anything in a

criminal matter. I wouldn't have done this, but I could have

said, I don't think the Court would allow it, I could have said

after we opened in early September: I am going to go out of

town. I will be back. Come in today and they are like, yeah,

they haven't proven it. We didn't do that. I have no burden,

zero, standing here, nor do my colleagues.

In fact, what you see with each of these defendants,

including Joye Vaught, is people cloaked in the armor and

bulletproof vest of the constitution. They have had that

protection throughout this trial and beyond it if your verdict

is not guilty, and those protections don't come off unless you

the jury take them off with a guilty verdict.

We don't know why things happen, but somehow against

all odds you're the ones chosen to be here and who have been

here for two months, and it seems random of all the people in

Maricopa County and beyond you end up here, but it's not a

coincidence. It's not a coincidence that you made it through

voir dire; that you sat through this trial with such patience,

and I can hazard a guess none of you came here thinking, super,

I get to be on a jury. I think only trial lawyers think that

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way, but you did. And I don't know why it worked out that way,

but I've watched you all through this trial. I watched how

carefully you've paid attention and your concern day after day

about total strangers. That's not what people do a lot of in

our culture. It's not too often that people come together from

a place of caring and obligation.

And now you're called to be a protector of our

constitutional rights. The presumption of innocence does not

evaporate when the evidence closes. The government doesn't get

any inferences. They don't have a right to a verdict, and for

those of you who believe the prosecution cannot rule out any of

the reasonable doubts that I've listed, and you may have your

own, you might have plenty others, now is the time for you to

hold fast to your convictions.

I am going to show you one final slide please, slide

19. Ms. Ellig, slide 19. Maybe. I think we're having a --

sorry. Thank you.

Throughout this trial I thought a lot about

George Orwell's writings. He warned us about government

overreach, and the cynicism of this prosecution echoes this.

Here, what is up is down; the First Amendment is protected,

except it's not; what is disclosed is concealed; helping law

enforcement with 20,000 subpoenas, law enforcement conferences,

late night and early morning phone calls is not evidence of

joining a criminal conspiracy.

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I will leave you with one final example. In the, it

was in the '80s, some of you might be too young to remember

this, but there were probably ten people, I am estimating right

now, who were poisoned and died by Tylenol. And they

investigated and found out that someone had poisoned some of

the Tylenol pills. And so Tylenol did the right thing and

recalled all the Tylenol. Just send it in. No questions

asked. We can't risk any of these. We don't know what's been

poisoned; just send it all back. So here's what I'm asking you

to think about. You've heard a lot of metaphors of reasonable

doubt, but I will leave you with this one.

Imagine it's a few years after the recall, and if your

household is like mine and sometimes lets things go out of

expiration in the medicine cabinet, and your beloved isn't

feeling well. It's late at night, stores are closed, and you

get up and look for something to give your beloved and you find

the Tylenol in the medicine cabinet. You don't know what lot

it is. You're not quite sure where you bought it. You don't

even know how many of these Tylenol capsules of the millions of

Tylenol capsules are poisoned ended up in what bottle. Can you

take this Tylenol back to your beloved and say, "Here, honey,

this will make you feel better"?

My friends, that's reasonable doubt, and I ask you to

vote not guilty not only on behalf of Ms. Vaught, but on behalf

of each of the defendants here. Thank you.

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THE COURT: Thank you, Ms. Bertrand. Members of the

jury, and Juror No. 7, we are going to take a brief break and

that is to permit the government to switch out the computer.

Since we do have a virtual appearance of one of the jurors, we

need to switch gears and so on and so forth, and so we'll take

approximately a 15-minute break. And again, just remember the

admonition not to come to any conclusions nor to discuss the

matter.

Juror No. 7, you may blank out your camera for the

duration and then we'll have you back in in about 15 minutes.

Please all rise for the jury.

(A recess was taken at 10:52 a.m.)

(Proceedings reconvened at 11:10 a.m.)

THE COURT: All right. Please be seated. Do we have

Juror No. 7 on ready to come in? All right. Yes, there she

is, and we'll have the jury in.

(Jury is present)

THE COURT: All rise for the jury. All right. Please

be seated. The record will reflect Juror No. 7 remotely, and

the jurors are present.

MR. BERRY: Thank you, Your Honor, may it please the

Court, counsel. Ladies and gentlemen of the jury, there are

two sides to Backpage, what the defendants wanted you to

believe and what the evidence actually shows. Each defendant

had a specific role in the conspiracy. Everyone was a

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necessary piece to the puzzle.

As the Court has explained to you, this is the United

States' last opportunity to stand before you and explain to you

our theory of the case. That's because we have the burden of

proof. You've heard defense attorneys argue in front of you

now for about seven hours. I'm going to respond to that and I

am going to try to do it in under an hour, so I want to zoom

out and talk to you about our theory of the case and some of

their defenses. My vow to you is to not show you another

e-mail. We're going to talk about this case in a different way

today. So let's zoom out and talk about these charges.

There is a lot of evidence in the charges, but the

case is actually quite simple. There are 51 counts focused on

how the defendants promoted prostitution, and there are 49

counts focused on how the defendants engaged in money

laundering of the illegal profits they made from promoting

prostitution. All five defendants are charged in Counts 1

through 51. We'll talk about the money laundering charges a

little bit later.

You have this chart up here. It's on the slide now as

well. We've printed it for you, so I am not going to spend a

ton of time on the slide, and I told you I am not going to show

you a bunch of e-mails. What we have done with this chart is

to distill the case down into just a handful of exhibits that

we believe are the core exhibits that show each defendants'

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knowledge of prostitution in this case.

I encourage you to write these exhibit numbers down.

They are going to be up here on this poster board throughout

the entirety of my presentation. Keep in mind also that this

presentation and the one Mr. Rapp gave the other day will not

be available to you.

As I go through this, if there is anything that you

think will be helpful to you in your deliberations, I encourage

you to jot that down as we're going. We're going to talk about

some specific jury instructions and I'm going to point out some

the page numbers on which you'll find it.

I don't expect to you write the instruction down, but

keep in mind you're not going to have all of the jury

instructions. I don't know if you still have them today after

she read them the other day. You'll have one copy of those

jury instructions that will help guide you in your

deliberation. The chart is going to be up here the whole time

so if you don't get it from that slide, it will still be up

here for you.

What I want to talk about is the general defense

arguments. They did it in seven hours. I will try to do it in

under an hour, and I think I can do that because they touched

on a lot of the same things. One of the things that they said

is, "Ladies and gentlemen of the jury, it's not illegal to make

money." We're going to talk about that defense.

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They talked about the defense of "I didn't know."

There is no sex act for money language on the face of the ad.

If you can't arrest, then you can't convict. There is no

knowledge of any of these 50 specific ads. We're going to talk

about that argument.

We're going to talk about what I refer to as the "But,

mom" defense. "But, mom." I will explain that to you and

we'll talk about that.

We're going to talk about the "It wasn't me" defense.

Finally, we're going to talk about good faith. This

is the roadmap for where we are going to go for the next hour.

Let's start. The defendants say, "Hey, it's not

illegal in the United States of America to make money." We

haven't charged them with that. There is no federal statute

that says it's illegal to make hundreds of millions of dollars.

That is not the charge. That is not the crime. They are not

charged with making money. They are charged with how they made

money. Money was the object of the conspiracy. They are

charged with how they made money, and that was off the backs of

people engaged in illegal prostitution business enterprises.

So that defense is handled.

Let's talk about one that's going to take a little bit

more time, the "I didn't know" defense. I want to point your

attention to a few instructions as we go along the way. Like I

said, you might want to jot down the page number. You're not

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going to write down the entire instruction, but when you get

back there, I think the instructions that I point out to you

are going to be helpful to you in guiding your deliberations.

One of them says, "If you find an ad proposes an illegal

transaction, it is not protected by the First Amendment."

On that same page as part of that instruction it says,

"The First Amendment does not protect speech that proposes an

illegal transaction." That's the question. Does it propose an

illegal transaction?

Now, you may recall in opening statements and then, as

predicted, Mr. Feder also brought it up in closing arguments,

he talked about that example of, "Ladies and gentlemen of the

jury," he got up here in opening statements back in August now,

September, he said, "You know, one-night stand for a hundred

dollars, you're just not going to know. You're just not going

to know whether these ads are sex ads for money." Ladies and

gentlemen, here is an example of a nightstand for under a

hundred dollars. Does this look anything like what we have

presented to you as being posted in the female escort section

of Backpage? I submit to you the answer to that is clearly no,

because context matters.

You also heard him talk about, "Put it in the hole for

a hundred dollars." This is the closest example I could come

up with on short notice. Here some funny T-shirts that people

have done with similar type language. Does that look anything

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like these ads? The answer is obviously no. We are not

putting up ads like that that are clearly ambiguous in that way

because context matters. And for purposes of the record, I am

showing Exhibit 223 that is in evidence.

Here's the language from that ad. Now, because

context matters, right, the defense is arguing, this language

is not a sex-act-for-money language on the face of it. Well,

what if it said the very language Mr. Feder talked about, what

if it said, "You can put it in my hole" as opposed to those

funny T-shirt version that have a golf ball and cornhole game

on it? Doesn't context matter? Depending on the context, the

phrasing can mean something very different. And in the context

that we presented these ads to you, it is clear and obvious

what they were for.

So let's go back to that. Keep in mind that when

you're deliberating, this is a very formal environment; right?

I wear a suit and tie everyday. We stand up here and speak.

We answer to the judge. You're not allowed to speak. We're

talking up here, very formal. We stand when you come in.

There is so much formality here, but please keep in mind when

you go back in the deliberation room, reason and common sense

are not checked at the door. That doesn't go out the window

just because we're formal in here.

You may recall in opening statement Ms. Bertrand

talked about that Arizona statute. She talked about a

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different part of the Arizona statute today, but in opening

statement she talked about a particular Arizona statute and she

talked about the very specific language in that statute. And I

submit to you that if this ad had that language, which I have

now put in there. This is not from the ad. This is me

manipulating it from the language she used from the Arizona

statute that says, "In exchange for money, I agree to let you

fondle and manipulate any part of my genitals, anus or breast

or penetrate into the vulva or anus."

This is the first and only time that the guy from

Texas has been told to slow, so I'll take it.

I submit to you that if it had this specific language,

the exact statutory language from the Arizona statute, the

defense would still argue there is no sex-act-for-money

language in here. You don't have to be so literal. You don't

have to be so literal. They knew that this site was replete

with these ads, and they used coded language like GFE, which is

in this one, Greek, boococky. It's the name of the game, the

coded language. They knew the codes were sex for money and

they knew the codes were endless. They knew the only way to

actually prevent the promotion of prostitution enterprises was

to do one thing, shut the site down, but they didn't want to do

that because of the object of the conspiracy, which was to make

money.

I want to turn your attention to page 5. Page 5 is

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part of the reasonable doubt standard, and it says, "It is not

required that the government prove guilt beyond all possible

doubt." And I submit to you that that's what the defense is

essentially arguing to you in one form or another; that we need

to prove it to this level that is beyond all possible doubt.

So keep this instruction in mind as you're evaluating the

evidence based upon reason and common sense.

Page 8 it says, "You are to consider both direct and

circumstantial evidence. Either can be used to prove any

fact." So circumstantial evidence is one of those things that I

think people who are not lawyers often have an idea about.

It's important for you to set that idea aside and make sure you

listen to the Court's instructions on this. So circumstantial

evidence is evidence that can be direct and circumstantial, and

in the next slide I will show you it says that they are equal

in weight. So let's talk about what is the difference between

direct and circumstantial evidence.

Direct evidence is like this: You leave here at the

end of the day. You've been inside all day, you walk outside

and you see it's raining, okay. That is direct evidence. You

have seen it has rained. Circumstantial evidence is you're

sitting in here, you've been sitting here all day, somebody

walks in the back door. They walk in the back door and they

have an umbrella, and they shake the umbrella off and they push

water off. Their hair looks a little bit damp, and you now

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have circumstantial evidence that it's raining or just recently

rained just outside.

The Court tells you on page 8, further continuing on,

that "The law makes no distinction between weight to be given

to either direct or circumstantial evidence." They are of equal

weight, and that's important to keep in mind as the defense

says, "Well, on the face of the ad we just don't know." The

circumstantial evidence is very clear and obvious.

Mr. Eisenberg talked about in his closing argument

about Grant Snyder saying that the ads did not provide direct

evidence of prostitution. You may remember him talking about

that. Well, remember he said it was suggestive, and so did

their expert. That is essentially circumstantial evidence.

They are saying, "Yeah, it looks like prostitution." It is

circumstantial evidence of prostitution.

MS. BERTRAND: Objection; misstates the law.

THE COURT: Overruled.

MR. BERRY: As we're continuing on talking about

"didn't know," right, we're still in the category of the

defendants didn't know, one of the things I think you want to

focus on is in those e-mails that are listed here in the chart

that you've seen ad nauseam. You've seen statements from each

of these defendants in one form or another.

For example, you have Mr. Brunst in Exhibit 120

talking about the plausible deniability. Remember that's the

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presentation that he helps author and he travels around the

country in an effort to sell Backpage in around 2011, I think,

and in there he talks about how, "Look, we have a general

classifieds ad site. We have buy, sell, trade, we have jobs,

we have tons of ads, a small number of our ads are over here in

this adult escort category. That gives us plausible

deniability."

MR. LINCENBERG: Your Honor, I object. This

completely misstates the testimony.

THE COURT: Well, overruled. And again, members of

the jury, it is your memory that controls in terms of what the

testimony and evidence is so far, and these are only summation

arguments of counsel, which are not evidence.

Continue.

MR. BERRY: Thank you, Your Honor. So plausible

deniability, because even though 94 percent of that company is

making money off escort ads, off prostitution ads, he says,

"Look, we got all these other ads. That gives us plausible

deniability." That's the two sides of Backpage I started with,

which is what they want you to know and what was really true.

Keep in mind the sale of Backpage to Carl Ferrer was a

giant exercise in plausible deniability. It was an intentional

attempt to create that extra layer. Remember Mr. Cambria

talked about being a layer away? That's trying to create that

extra layer, that extra plausible deniability.

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Now, let's pause here on Mr. Brunst for just a second.

You heard some back and forth essentially between Mr. Rapp,

Mr. Lincenberg about what Mr. Brunst's role was. You heard

Mr. Lincenberg refer to him as a nonoperational CFO, whatever

that means. You've heard him refer to as a bill collector, a

bag man. Ladies and gentlemen, I am telling you, you can call

him bananas. It doesn't matter what you call him. What

matters is that he made millions off of Backpage. 94 percent

of Backpage revenue was from prostitution ads. There was no

other evidence of other income for Brunst after they sell the

newspapers in January of 2013.

Think of it like this: Can you imagine that a

6 percent owner of the Diamondbacks is sitting up in his

executive suite, and he looks down at this beautiful green

field and he sees nine guys go out on the field, and you see

thousands of people paying to come and watch them and he

doesn't know that he owns a baseball team? Come on.

Another statement, Ms. Vaught. Ms. Vaught, you saw on

that e-mail where she is reprimanding some of the moderators.

Remember that? This is part of the distraction strategy. They

respond to law enforcement subpoenas. They say, "Here's the

stuff you asked for." And oh, by the way, because the police

dog's nose is long and straight and only points in one

direction, they want to give it a little nudge. They want to

give law enforcement's nose a little nudge and push it to other

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sites. "These other sites, they have these links too,

Mr. Officer. But, hey, don't tell them about the Evil Empire,

the Naked City, because we own those too." That is evidence of

what they are doing is illegal. That is her knowledge that

there is prostitution on that site.

Then you have Mr. Lacey, and he uses the oldest

profession, his own words, in a column that he's writing.

That's his acknowledgment that this site is about prostitution.

You have Mr. Spear in an e-mail talking about how they

struck a deal with TER, and everyone knows at this point what

The Erotic Review is about, reviews of prostitution.

And then you have Mr. Padilla, the companionship

e-mail. Do you recall that was an e-mail where -- this is an

important point too to think about. Remember the defense is:

I am just a guy. I am just a little guy here. I don't have

any control over policy and procedure.

Remember that e-mail? That e-mail is about him

talking, debating, philosophizing about whether we should allow

the word "lactate" in the filter. Should we allow "lactate" to

be in ads, because, you know, if someone is lactating, then

there is arguably an exchange of bodily fluids, and our whole

theory of the case, our plausible deniability is that this site

is really just about companionship. Can we really make that

companionship argument if we allow an exchange of bodily fluids

like lactating, because what is the next step after that?

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Something more obviously sex related.

Next the defendants talked about, well, you've heard

all these cops say, "If you can't arrest on this ad, well, then

you can't convict." Ladies and gentlemen, that's a false

comparison, an absolutely false comparison that they have been

loving pushing on you. Look at the instructions on page 39.

The instructions on page 39 say very clearly, "The United

States does not have to prove that the referenced states' laws

were actually violated, only that each defendant had the intent

to promote a prostitution business." It is not necessary for

us to show that each one of those states' laws were actually

violated.

What else do you have, though, to show that those laws

were violated and that they were in fact promoting

prostitution? We brought before you multiple witnesses. We

brought you police officers and the victims who testified:

Hey, every single time, every single time when the individuals,

the women who testified said they posted an ad, something

happened. And every time one of the cops made a call,

something happened.

And you saw that as an example in the CNN documentary.

And what was that? All you had to do was go to Backpage

because they had cornered the market on prostitution

advertisement, go to the female escort section and post your

ad, and just make it look generally like the other ads. And

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what happens? The phone start ringing within minutes. Every

single witness that came forward said the same thing, within

minutes, and that's what you saw.

(Playing video, not taken down by the

Court Reporter.)

MR. BERRY: Next, the defendants argue, well, they had

new knowledge of these specific 50 ads. Ladies and gentlemen,

these ads are just a sample. We're not going to charge them

with a million counts based upon the millions of ads. That's

why there's a conspiracy charge covering the statute, covering

the 14-year life of the conspiracy. What I'm not -- what I'm

not going to show you is a jury instruction says we must prove

that any defendant had specific knowledge of these particular

ads because it isn't in there. We don't have to do that. You

won't see that instruction.

Page 30 of the instructions says, "Each defendant in

some significant manner associated himself or herself with the

purpose of promoting or facilitating the promotion of any

business enterprise involving prostitution." That's on

page 30. You may recall Mr. Lincenberg said, "You don't become

a conspirator merely by associating with other conspirators."

That's true, but that's not what happened here.

We didn't -- he brought two of his friends in here.

They clearly associated with him. We didn't charge his friends

who merely associated with a conspirator. We didn't charge

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Mr. Lacey's friends that he paid $5,000 to who testified here.

We didn't charge them because they associated with Mr. Lacey.

We didn't charge Mr. Becker because he associated with

Mr. Lacey. All of them associated with a conspirator. But

what this instruction makes clear is that the if the defendant

associated himself with the purpose of promoting any business

enterprise involving prostitution, then he is guilty.

Page 30 helps you to understand what it means to

"promote" or "facilitate the promotion of," because we have

been throwing those phrases around. It's in the statute. The

instructions help you understand it. What does it mean? It

means helping someone commit a prostitution offense, and that's

what Backpage did.

You saw victims and police officers who came in here

and explained to you how it helped. By creating a marketplace,

creating a forum where those ads could be posted, it helped

promote someone else committing a prostitution offense. All

right. So we've dealt with "I didn't know."

Now we have -- we will deal with this one very

quickly. This is what I call the "But, mom" defense. This is

the one where, think about it, if you have kids, if one of your

kids is doing some wrong thing, and you look at them and you

go, "Hey, knock that off." And they go, "But mom, but dad,

he's doing it too." That's the defense here; right? You've

heard them talk about, well, Facebook, TikTok, Google, all

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these other things. That is not what you're here about to

evaluate and decide. You are here to evaluate and decide the

facts in this case and this case only.

You also saw this false equivalency argument in

Mr. Cambria's cross-examination of Issac Luria. He says,

"Priests molest children, so why are you not taking out a full

page ad in the New York Times against them? You're only doing

it against Backpage." It's an intent to distract you from

focusing on the wrong thing these defendants did. One person

who committed a crime versus an entire business that committed

the same crime over and over again everyday for 14 years.

Then we have the "It wasn't me" defense. You've got

the owner defendants, Lacey, Spear and Brunst, up on top

saying, "I am not down in the trenches. I don't know what's

going on." And then you have Padilla and Vaught underneath

going, "I am just a guy. I am just a woman. I am just working

here." Who are they pointing at? They are consistently

pointing to Carl Ferrer.

Carl Ferrer has come in here and he sat before you for

days, and we're going to talk about his testimony. And he sat

there, he accepted responsibility for his actions, and he sat

here and he gave his testimony and he was cross-examined by

five defense attorneys about that.

So I want you to think about page 27 of the jury

instructions when you're thinking about this "It wasn't me"

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defense. It says, "The Travel Act offense fell within the

scope of the unlawful agreement and could reasonably have been

foreseen to be a necessary or natural consequence of the

unlawful agreement." To the extent they are pointing at

Carl Ferrer and all the things he did, isn't it a natural

consequence of the agreement to have Backpage post these ads

that he would do what he did, and that links them to the chain

and makes them culpable as well?

Again, we did not charge every person who ever worked

at Backpage. We charged the ones sitting over here who were

actively involved in making it an ongoing venture. They were

each a necessary and important piece of the puzzle.

Page 26 of the jury instructions I also want you to

focus on and be aware of. It says, "It is not a defense that a

person's participation in the conspiracy was minor or for a

short period of time." Now, you've heard at least three of them

get up here and say that you could arguably say they all made a

similar argument. This applies to Vaught just as much as it

applies to Lacey or Brunst. Remember, they are claiming to be

distant, minor, a layer away. All of them were integral,

invested and intent on making this venture and conspiracy

successful.

And how was success defined? The object of the

conspiracy was money, dollars. And how did they make it?

94 percent of those dollars came from the female escort

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section, which was prostitution. What was the goal of anyone

who posted in the escort section? Make the phone ring.

Mr. Rapp used the metaphor of an engine room. That's

where Padilla and Vaught were. Think of Backpage like a ship,

all right, it's a ship. You might want to call it the Titanic,

it has gone down, but it's like a ship. They aren't on top

steering, Padilla and Vaught aren't on top steering, but they

can feel the rough seas. They know about the CNN

documentaries. How can you work in a company and not be aware

that a major news organization has produced and aired a

40-minute documentary about all the things your company is

doing wrong and not be aware of it? They can feel the rough

seas. They know about that. They know about the Attorney

Generals letters, and they know they are not on solid ground.

Then you have the captains of the ship, Lacey, Brunst,

Spear. They are not in the engine room. They are not down

there picking and choosing, "lactate" and "companion" and

"BBBJ," and all of those things, but they can feel the rough

seas too. They can see the rocky shores, they can feel the

icebergs and see the sharks circling. They know about all the

things people are saying about Backpage.

So when you're thinking about that, just because they

might appear minor as compared to one person or another doesn't

mean that you don't -- you can't find them guilty.

Page 21 is sort of the bookend to that, and it says,

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"The punishment provided by law for this crime is for the Court

to decide." Each defendant played an important role in the

conspiracy, and even those who played a minor role are still

subject to accountability under the law. That was the previous

instruction I showed you. Punishment is not for you to

consider. It will be decided by her Honor. So that gets rid

of "But, mom" and "It wasn't me" and it leaves us with "good

faith."

Page 47 talked to you about good faith. I think each

of the defense attorneys mentioned it in some capacity or

another. Good faith is defined as encompassing a belief or

opinion honestly held in an absence of malice or ill will.

What evidence do you have of each of the defendants' honestlyheld belief or opinion? I submit to you, you don't have any

evidence.

Let's talk about what evidence there is that

demonstrates a lack of good faith, which is the government's

burden here. First, you have them claiming, "Well, moderation,

that shows our good faith. We were trying. It was a tough

job, but we were really, really trying."

When I think of moderation, I think of a game called

Taboo. It's a card game I play with my kids. And if you've

never played it, it's pretty simple. You have a card, you have

a word on it, and then you have five other words. You're not

allowed to say that word. Let's say the word is "baseball."

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That's the card I am looking at. You're my partner and I am

trying to get you to say the word "baseball." I can't say the

word "baseball" and I can't say five other words like "sport"

or "pastime" or "pitcher" or "hitter," something like that.

Can't say that word. Can't say those other words, but I still

need you to say "baseball."

So I come up with other words. I think I can get you

to say it. Maybe I say "Dbacks," "World Series," "Rangers."

Do you think you can figure out what that means? Do you think

you can figure out what it is I'm trying to get you to say?

That's what moderation was. It's take away these words over

here, but we've already cornered the market on prostitution

advertising. So if we take away some of these words and we let

them put these kinds of pictures and these other kinds of

words, I think they are going to get it.

They are going to bring people together. The

marketplace has been created by them and they know that.

Moderation is a game. It's a joke. It is not good faith.

Another piece of evidence of lack of good faith is

that whole distraction of law enforcement that I talked about

when I talked about the Evil Empire, Naked City link e-mail

that Ms. Vaught sent. That attempt to distract law

enforcement, the long nose of the police dog, that is not good

faith. That is them pushing away, distracting from them in

what they are doing in the 20,000 subpoenas that they received

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over and over and over again telling them, "You have

prostitution on this site."

Next you have them hiring the Internet safety

consultant. Do you remember Hemu? They hired this guy. He

gives them all this advice, tells them, "Here is how you can

help this out." What do they do? Put him on the shelf. Why?

Because his most important suggestions that might have actually

accomplished something, and might have actually eliminated

prostitution advertising on their website would also do what?

It would reduce the object of the conspiracy, which was to make

money.

Same thing for the NGO suggestions. They run all over

the country meeting with these NGO saying, "Oh, I really want

to hear your thoughts and feelings about this." What do they

do? They ignore it because it's really just a game. It's just

a stall tactic. It is malice and ill will. It is a lack of

good faith about what they are doing. They don't actually care

what the suggestions are. They just want to keep making money.

It's basically the same dang thing as the slow dance with the

Attorney Generals, which is a line item in their budget. How

can we slow dance the Attorney Generals?

Then you have this FBI award in 2011. Well, this is

just the greatest evidence of good faith to them. All right.

2011, you saw witness after witness say, "Did you know anything

about the relationship with The Erotic Review? Did you know

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anything about their aggregation policy?"

"No. No. No. No. No."

Do you seriously think that the FBI who handed out

this little certificate in 2011 understood the internal aspects

of this company? They didn't. It took until 2018 for us to

figure that out and put it together, and that's why we're here

now.

Another piece of evidence of the lack of good faith is

remember they are a legitimate company right up until they

start doing what? They are like, "Well, we sent out e-mails

and things are heating up. The AGs are circling. Maybe we

should just stop regular e-mails and start using Proton Mail,"

because they know what they are doing is wrong, and they are

trying to reduce the ability to see the evidence of that. I

submit to you that that is evidence of a lack of good faith.

Similarly, and perhaps most compellingly is the very

issue of The Erotic Review. That is front and center of this

case to show lack of good faith. They didn't tell anybody

about that. I think you heard Mr. Ferrer testify the first

time he ever mentioned the relationship, and that's what is

important. They want to make this big deal about, you think

the FBI, the most sophisticated law enforcement agency known to

mankind, didn't know about this website? Of course they knew

about the website. What they didn't know about was Backpage

was hiding, the other side of Backpage that they didn't want

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you to see, which is the relationship, the internal formal

intentional relationship with this website that they were

creating, and that shows they had lack of good faith and that

they intentionally knew about the prostitution.

Other evidence of a lack of good faith, keep in mind,

is all of the shell companies and all of the movement around

the world, all of these different companies that are created in

different places. You heard Mr. Lincenberg argue that banks

knew Backpage was affiliated with Website Tech and Ad Tech and

Camarillo and Medalist, but it took an investigation by the

criminal investigations division of the IRS to unpack all of

these complicated shell companies.

You saw absurd charts of companies. Why is that

necessary? Remember, for the first eight years of Backpage's

existence, Backpage was on the name of the bank account. The

US Bank shut them down. What did they start doing? Well,

we're toxic, so what are we going to do? And for the rest of

the life of the company they were engaged in financial

gymnastics opening shell company after shell company, from

Curacao to China. That is not good faith.

More importantly, that is precisely what it means to

conceal or disguise as the money laundering instructions tell

you.

Now, let's talk about some of the defense witnesses.

You have two character witnesses for Spear come in. We ask

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them, "What do you know about Backpage?" He answered,

"Nothing." This goes to the issue of, what do you know, what

evidence is there in the record about what these defendants'

good faith is? Their honestly-held belief or opinion.

Remember that jury instruction? What do you actually have in

the record that you can point to? He brought in two witnesses,

and both of them said, "I don't know. Never really talked to

him about it."

How does your nearest and dearest, one of the guys who

has gone to three of your weddings, how do you not know what

his business is? I submit to you it's because he didn't want

to talk about it because he knew what it was about and he

wasn't interested in sharing those details.

Same for Mr. Lacey. Two former employees. They each

got $5,000 checks, and both of them said, "I didn't really have

any knowledge of Backpage."

First of all, why not call a couple employees that

maybe you didn't throw $5,000 out? And two, why not call

employees that know something about you and your company? He

didn't.

Same with his witness Mr. Becker. Remember that

attorney testified he would not have done it knowing what he

knows now. And remember Mr. Becker talked about his own

accounts were shut down for his dealings with Mr. Lacey because

he was so toxic, because Backpage was so toxic. That's why

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they were creating numerous shell companies in different

countries.

And then don't forget the expert Dr. Mehlman-Orozco,

the person who can't answer a straight yes or no question.

She -- it's basically her testimony that this website was a

hundred million dollar business based upon fake ads. She

cannot be taken seriously, ladies and gentlemen. She says she

doesn't know whether they were real ads or not, but you know.

You know because you heard the witnesses get on the stand and

say, people like Naiomy, Breahannah and Anya, and they told you

what they did for money. You know that those were not fake

ads.

And finally, you have their witness Mr. Snyder, former

Minneapolis police officer, who is basically like the police

officers we brought before you who said, "I worked a lot of

Backpage cases. They were all sex trafficking. That's where

we went to make those kinds of cases."

Now, sticking with good faith for a moment here.

Page 43 of the jury instructions talks about Count 100. You

heard Mr. Cambria argue this issue in some detail, and the

instruction tells you that if he knew the transportation was

designed, in whole or in part, to conceal or disguise, then he

can be found guilty. Remember the evidence that that

transaction, he takes -- he tells his attorney to: Take 16 and

a half million dollars from your account, don't have my name on

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it 'cause I am toxic, send that 16 and a half million to

Hungary, don't put it in my account over there either, put it

in another name, and do it on January 3rd --

MR. CAMBRIA: Object to that, Your Honor, that is not

the evidence.

THE COURT: Well, the jury is the determinator of the

evidence at this juncture. And again, what counsel say is not

evidence, but the objection is noted.

MR. BERRY: This happens on January 3rd, 2017. You

have two primary pieces of evidence about that. Exhibit 1, I

didn't put it on the chart. If you remember that one,

Exhibit 1 and the testimony of Lin Howard, the banker, the lady

that came in and testified that she had a similar conversation

to the e-mail where he is saying, "I want to hide some money

from the government."

Now, that happens in January of 2017, and you'll

recall the testimony evidence that there was some other stuff

happening around that time, and that was the Senate

investigation was going on, but some other stuff had been going

on for a long time, right, the investigation had been going on

for quite a while, including the CNN documentary, the New York

Times column, things like that.

Mr. Lacey had something rattling in his ears as well.

He had all of those pieces of evidence, notice letting him know

that things are getting rough. Things are heating up, in the

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words of Mr. Brunst at one point. And then he gets indicted in

April of 2018 and he goes on August of 2018, 18 months after

the crime has been committed. The crime is complete on

January 3rd, 2017. That's when you have to find that he had

the intent to transport this money designed in whole or in part

to conceal or disguise it.

But 18 months later, several months after he is

indicted, he says, "Hey, government, here's this little FBAR

thing. By the way, I stuck 16 and a half million dollars over

in Hungary. I've told you about it now," after the crime is

complete.

Let's balance the defense witnesses against the

prosecution witnesses. You have insiders, Carl Ferrer,

Dan Hyer, and Jess Adams. Let's talk about Carl Ferrer for a

second here. Ladies and gentlemen, we are not asking you --

the defense got up here and made arguments about reasonable

doubt and reliance on a witness, and the most important is, and

they used some pretty outrageous examples. We are not asking

you to look at Mr. Ferrer and say, if he told you that nana had

cancer and you got to amputate her limbs and cut out organs,

then you need to believe him. That is not what we are saying,

ladies and gentlemen. That's not what we are asking you.

First of all, Mr. Ferrer is not a doctor. But you

know what he is? A Ph.D. in prostitution advertising. He is

an expert in what he got up here to talk about, and that you

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can rely upon and believe.

We also brought you outsiders. We built the wall. We

started with the foundation of Carl Ferrer and we added witness

after witness after witness, brick after brick, and built the

wall that builds the house that contains this case and this

prosecution. We brought you John Shehan from NCMEC, Brad Myles

from Polaris, Issac Luria from Auburn, the AMEX guy, and Lin

Howard from the bank. We brought you multiple police officers

who all say essentially the same thing about what Backpage was

really about, and we brought you victims like Breahannah,

Naiomy, Anya, Astrid, Jessika, Jordan, Megan or Shanna who was

the sister of Cynthia, and Andrea.

Page 9 of the jury instructions. People often forget

things or make mistakes in what they remember. Again, you have

to use reason and common sense when you're deliberating. It

was a 14-year conspiracy in which thousands of e-mails were

sent by and to Carl Ferrer. The instructions tell you to

consider his testimony carefully and to look at the fact that

he's entered into a plea agreement. We are not scared of that.

You should. Keep in mind that he was trying to be reasonable.

Look at how he was cooperating.

Several times you heard him say in answers to

questions both from the prosecution and the defense, "I am not

sure." If he didn't know, he didn't know, and he said that.

Sometimes he would say something, and you might recall he will

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say, "Actually, would you mind if I corrected my testimony?"

He was trying to be conscientious. You got to observe him for

days. It wasn't like a 30-minute witness, right, he was up

there for days, and you got to observe his demeanor and assess

his credibility with your own eyes.

You also have the victims. The victims corroborated

with the ads, corroborated what they said. The ads were for

prostitution, and they know because they were in the rooms

engaging in those sex acts for money.

You heard the police officers, and they corroborated

what Mr. Ferrer said. They used countless investigation that

used Backpage that turned out to be prostitution. You heard

from Dan Hyer and Jess Adams, they corroborated. You saw 400

plus exhibits. We didn't just put up a guy we pulled off the

street and said, "Hey, go point the finger at all these people

over here. Here's what to say." We anchored his testimony in

the exhibits. It was built on the foundation of those

exhibits, and you have that to rely upon as corroboration.

You heard the defendants' own words in those e-mails.

You didn't hear a challenge to the authenticity of some of

those exhibits where their clients are saying something. They

are not saying this is a made up e-mail; this is a bogus

e-mail. They might have objected and didn't want it to come

in, but you don't have to consider it. They didn't say, "Hey,

this isn't my client. I don't know who this guy named Jed is.

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I don't know who this guy Lacey is."

Then I submit to you that in their cross-examination

of Mr. Ferrer, they also corroborated his statements. Did you

notice how many times they got him to authenticate their

exhibits? How many times they got him to say, "Isn't it true

that this was what was going on?" They know he's a Ph.D. in

prostitution advertising because he was one of them.

Now, one of the arguments that Mr. Cambria made, both

in opening and closing is, "Hey, my guy, he's just an old time

newspaper guy." Just an old time -- "There is a wall. There

is a wall between the business side of the newspapers and the

editorial side, and my guy, he is on the editorial side, just

an old time newspaper guy." Keep in mind, even if you buy

that, you can't buy that after January of 2013. Why? Because

then in January of 2013, Mr. Lacey and the other owner

defendants sold all of their newspaper interests, sold them

all.

Note that Counts 2 through 51, the prostitution ads,

all take place after the sale of the newspaper. When all of

those defendants, all of the owner defendants are exclusively

focused on Backpage, they are not distracted by all the 18

newspapers anymore. They are focused on Backpage. It's a

little silly to suggest that they didn't know what Backpage was

about from 2004 to 2012, but it is absolutely preposterous to

claim that once they sell the newspapers.

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You heard zero evidence of any other source of income

for these men. And remember, even Mr. Lacey's own witness

comes in here and we cross-examine him and we point out how he

posted on Facebook once, they traded that legacy of newspapers

in for a chase for gold derived from prostitution. That's not

our witness. That's his witness.

Ladies and gentlemen, that old time newspaper guy went

away in 2013 because he chased gold that was derived from

prostitution on Backpage.

Page 25 of the instruction says, "An overt act does

not itself have to be unlawful. The United States is not

required to prove that the defendant personally did one of the

overt acts." Here is the time line that shows some of those

overt acts. Remember, it doesn't have to be an illegal event.

An e-mail is an overt act, and we have shown you countless

exhibits where each defendant committed an overt act, and more

than one overt act, e-mails they sent in furtherance of making

Backpage successful.

Mr. Cambria used the analogy of a person who owns

stock in General Motors. Remember that? Where he says, "Look,

my guy, he is just like somebody who owns stock in General

Motors. He doesn't know what's going on." Mr. Cambria

suggested that Lacey was like that, yet he's the individual who

met with all of the NGOs, authored that Backpage understood

document about oldest profession, and he's defending Backpage

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publicly. He's the captain of the ship. His bank accounts are

getting shut down, as Becker testified, and he knows what's

going on.

All right. I said we would get to money laundering.

We are here. We are getting close to the end. Money

laundering is very simple, although it doesn't always work that

way. Counts 53 to 62 are concealment money laundering. It's

shown through the use of numerous shell companies that they

didn't need for the first eight years of Backpage's existence.

Count 63, there was that evidence that this was a

payment to a web developer in India to help develop nonadult

feeds, to help bolster that plausible deniability: Hey, let's

get that developer and bring us a bunch of nonadult stuff so we

look like we are a general classifieds site. Concealment isn't

necessary on Count 63. And $10,000 threshold is also not

necessary. I think that's the smallest one. I think that's

like the 6000 dollar payment. Keep in mind, you don't have to

show the 10,000 of concealment on those counts there, 63

through 68.

64 through 68 are international promotional money

laundering. That's the money moving from Europe back to the

United States and put back into the Backpage business for

payroll purposes. That's promoting the business. That is

the --

MR. LINCENBERG: Objection; there's zero evidence of

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that.

THE COURT: Overruled, Mr. Lincenberg, and the jury

will use its memory of what the evidence is.

MR. BERRY: Counts 69 to 99 are the transactional

money laundering, and there are various defendants that you see

in the chart here. I didn't put each one because sometimes

it's two of them; sometimes there's one of them, and you'll see

that in the verdict sheet as you go to deliberate.

All you need to show there is a monetary transaction

that involves $10,000 or more of Backpage money, and all of the

evidence that you have about that comes in the form of

Quoc Thai's testimony, and it's all summarized very neatly in

Exhibit 1479. 1479 is the one with those charts, those

flowcharts of not Backpage company, shell company name, money

movement to another company, shell company, that's also not

Backpage, but it's all Backpage money.

All right. Page 2 of the instruction says, "Do not

allow yourself to be influenced by personal likes or dislikes,

sympathy, prejudice, fear, public opinion, or biases." Ladies

and gentlemen, this is not a case about personalities, but it

is about people. You can like defendant Lacey newsman legacy;

you can like his attorney, Mr. Cambria. I like him. But that

should not affect your evaluation of the evidence.

As I said in the beginning, there are two sides to

Backpage, the one the defendants wanted the world to believe,

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which they vigorously attempted to put out there for many

years, but then there's the inside of Backpage, which has been

revealed to you through the exhibits and testimony over the

course of this trial.

This case is not about money. This case is about

people. It's about defendants for sure, but it's also about

Jordan and Cynthia, Astrid, and the others.

Ladies and gentlemen, actions have consequences, and

this is the 50 ads in about 50 seconds.

Ladies and gentlemen, this is your opportunity to hold

these defendants accountable for the consequences of their

actions. We ask that you find them guilty. Thank you.

THE COURT: All right. Thank you, Mr. Berry.

Members of the jury, you've been through quite a lot

in a relatively short period of time when the parties rested

their case last week, and I read you voluminous instructions,

and we have now had an instance where we've had to release a

juror because of illness and we do now have a juror appearing

remotely for the same purpose.

I know that there are one or more of you who also are

not feeling 100 percent and we want to ensure that everyone

when they receive the case for official deliberations receive

it when they are feeling at their best, and so I have decided

at this juncture to recess the trial and to resume on Tuesday

morning when everyone will have hopefully an opportunity to

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take care of their health, take care of anyone who has any sort

of illness. It's flu season, of course, and we want to make

sure that you're all at your very best when we hand you the

case.

There are some technical things that need to occur,

not additional arguments, be assured, not additional

instructions, but I do want to remind you of a couple of

instructions before I hand you the case for deliberation. And

since we are not at that point yet, I'm going to remind you of

the admonition.

It's critically important at this juncture that you

adhere to the admonition not to discuss the case, not to

conduct any research, not to discuss the case amongst your

family, your coworkers, amongst one another. And you may, of

course, tell your coworkers, your employers, your family, that

the jury is -- the trial is suspended for the duration of the

week and that you are expected to return on Tuesday morning at

9:00 a.m. You may tell them the schedule. You may not tell

them anything about the case, however. You may not, again,

come to conclusions. You can't come to conclusions because you

don't have the instructions before you, and so please adhere to

the admonition.

I want to remind you that we've been at this, and you

know better than I, that you've been at this daily for a number

of weeks, and should any juror come into contact with any

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information, anyone who gives you information, though it might

not be solicited, to report that contact immediately to the

Court. I need to be aware of it, and at this juncture it's

very critical that we not jeopardize the proceedings because we

could end up having to start all over again.

With that, I will expect you all to be here at

9:00 a.m. promptly. I'll have you in. Again, we'll provide

you with just some limited instruction and information and we

will proceed in that way.

All right. Now, with that, we will adjourn our

jurors, and please all rise as the jury leaves.

And Juror No. 7, you may disconnect.

(Jury is not present.)

THE COURT: All right. Please be seated again. Those

in the gallery, I ask you to remain just so that the jury can

leave uninterrupted from the building.

Let me just place on the record, I was correct in my

memory, Mr. Rapp, the statement that Ms. Bertrand put up was

indeed on page 32 of the instructions, so I just want to make

the record clear with regard to that.

With regard to the issue of the forfeiture proceeding,

why don't we reconvene tomorrow at 10:00. Again, I'm getting

through your briefing with regard to that. I want to look at a

couple other matters. I understand Mr. Panchapakesan is taking

that issue on for the defense. I'll permit him to appear

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remotely. We have the Zoom link now capacity, so we'll use

that in that way.

Is there anything further to be taken up by the

government?

MR. KESSLER: Your Honor, sorry --

MR. STONE: No, Your Honor.

THE COURT: All right. Mr. Kessler.

MR. KESSLER: I did not want to interrupt Mr. Berry's

closing rebuttal, but I want to make a record of Mr. Spear's

objection to a couple of things.

In discussing the character witnesses that the defense

called, Mr. Berry posited the question to the jury, why don't

they call somebody who knows something about, you know, the

defendants' involvement with Backpage, or something to that

effect. I am paraphrasing. It is improper for the prosecutor

to comment on any defendants' failure to call any witness. We

don't have an obligation to present any witnesses, but if we

present some, that doesn't open the door to the government

suggesting that we should have called others. Like the

government often says, the door doesn't swing both ways.

Additionally, that constitutes burden shifting, it

violates the defendants' Fifth Amendment rights, and there was

an additional comment that amounted to balancing the witnesses,

which is improper, where Mr. Berry pointed out how many

witnesses in how many different fields the government called to

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testify and, look, the defense only called a smaller number.

That also violates the prohibition of the Fifth Amendment,

violates the government's burden of proof requirement, and is

improper burden shifting.

THE COURT: Mr. Berry, do you wish to respond?

MR. BERRY: Sure. I don't think that that's quite

right what he's characterized. I don't think I commented at

all about the number of witnesses and tried to balance that.

What I was trying to do was balance the quality and content of

what was presented. The jury is certainly allowed, and it's

okay to let them know, "Hey, here's what they put up and here's

what we put up, and you can evaluate the content of that and

how it was corroborated." That was in the context of me

talking about all of the witnesses that corroborated what

Mr. Ferrer said, which was a response to all of the defendants

castigating Mr. Ferrer's veracity and truth.

About the issue of why didn't they call another

witness, that was not intended to say, "Hey, they should have

called anyone." It was saying, if you're going to call this

person, why isn't it someone who knows something about what

this trial is about? And that was the intent of what I was

saying. The record will show what the record shows about what

I said about that, but that was certainly what I was trying to

articulate for the jury is why these two witnesses, who didn't

know anything about Backpage in the context of good faith, and

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what do you have in the record that evaluates that you can rely

upon to evaluate their belief or honestly-held opinion

regarding good faith?

I was careful not to articulate or suggest that they

needed to testify because they didn't need to. That's obvious.

I can't say that. But once they put up two witnesses to say,

"This is my guy; I know Mr. Spear," I think it was okay for me

to comment on why is it that those are the two people that they

called that don't know anything about Mr. Spear's involvement

with Backpage, and that was certainly my intent.

THE COURT: All right. I will take a look at the

transcript of the argument and I'll make whatever -- if I need

to make a ruling, do that tomorrow in advance of our

discussions about the forfeiture issue.

MR. LINCENBERG: Your Honor, I know there is a record

that an objection by one is for all, but I want to make clear

that we join in that objection.

THE COURT: Certainly.

MS. BERTRAND: Same for Ms. Vaught.

THE COURT: And you might have noticed that I created

a new word for the -- they are the determinator, at a

presidential moment, I think, and you can quote me on that.

All right.

MR. FEDER: One other thing to make a record. The

closing brings to mind the Motion to Dismiss the unbounded

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conspiracy, and we just note that for the record, that they

opened it up to multiple conspiracies, which the Court did not

give an instruction on.

In addition, Mr. Berry seemed to have tried to

disconnect the requirement that the ad, the overt acts connect

with 52 ads, not to any ad that was on Backpage.

THE COURT: Well, my recollection, and I haven't

changed it based on the arguments, is that it's a continuing

conspiracy. It just occurred in certain year time span, but

that it is not multiple conspiracies, and so I'll look at that

again and see if I come to some other determination, but your

argument is noted.

MR. CAMBRIA: One other thing, Your Honor, please.

Since the jury has not started deliberating, we would renew our

objections to the charge and suggestions or request a charge,

but I note particularly we had asked that the First Amendment

instruction indicate that the "ad must necessarily propose an

illegal transaction," and in the rebuttal remarks here we had a

reference to "proposes an illegal transaction," which I think

is the -- is an example of why we wanted it to be clear that it

necessarily had to propose an illegal transaction on its face

statement -- state an illegal transaction on its face, and I'd

simply use the words that the government chose out of the

instructions as given about "proposes."

THE COURT: The jury has orally instructed, and that

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is the instruction that they have been given. And not only the

government, but defense counsel have referred to that First

Amendment instruction as it was given. And so though your

objection is noted and your request is noted, I am not going to

change the instructions because they have been given, orally

albeit, and because counsel have used them.

And so in any event, is there anything more?

MS. BERTRAND: Your Honor --

THE COURT: All right.

MS. BERTRAND: Your Honor, if I may, I will be very

quick, I just wanted to note for the record that Ms. Vaught's

Motion for Judgment of Acquittal the Court is pending, I just

want to make sure we're still on track with that, and also ask

that Ms. Vaught be excused from tomorrow's proceedings

regarding forfeiture. She is not party to the forfeiture

matter.

THE COURT: If you're waiving her presence, then

that's fine. I will take that waiver.

MS. BERTRAND: I would ask my presence be waived as

well. There is not interest that Ms. Vaught has with the

forfeiture part of it.

THE COURT: Well, let me check with the government

because while the indictment outlines the forfeiture, I don't

know specifically what properties and what assets belong to

whom, and so I want to make sure that that is your

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understanding.

MS. BERTRAND: Well, let's clean that up now because I

have been in this case for four years and I never understood

there to be an allegation against Ms. Vaught.

THE COURT: Yes, it is important that we do so.

MR. STONE: That's correct, Your Honor, the forfeiture

would just be against the three owners, Defendants Lacey, Spear

and Brunst.

THE COURT: All right. She may be excused and you may

be excused.

MS. BERTRAND: Okay. Mr. Padilla and his lawyer may

want the same request. I don't know.

MR. EISENBERG: Well, Your Honor, there is a demand

for forfeiture pertaining to a property in which my client has

resided. Now, listening to counsel here, maybe I have read

that wrong but --

THE COURT: Well, they should know better than I, and

so maybe you need to get together with Mr. Stone and figure out

where that allegation came from or where it lays. It's

critically important.

MR. STONE: Yes, Your Honor, we will clear that up and

what we will do is we will submit this week a proposed form of

verdict for the forfeiture. That will need to change depending

to the counts that the jury comes back on for conviction, but

we can submit that so that everybody understands this is what

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it will look like if, for example, the jury convicted on all

100 counts.

THE COURT: In any event, whatever it is that your

understanding is, if you're not part of the proceeding,

Mr. Eisenberg, your client is not, then I would see no reason

why you would have to appear.

MR. EISENBERG: I'll let your court know, Your Honor,

through your e-mail.

THE COURT: Thank you. I appreciate that. All right.

MR. LINCENBERG: Your Honor --

MR. EISENBERG: Excuse me, sorry, Mr. Lincenberg. I

think we all have Rule 29 motions for judgment.

THE COURT: I am very well aware.

MR. EISENBERG: I thank you.

MR. LINCENBERG: Your Honor, may Mr. Brunst also

appear remotely for tomorrow's hearing?

THE COURT: He can appear, I think, telephonically.

MR. LINCENBERG: Telephonically.

THE COURT: We'll have a line set up for that. We can

do that, Liliana.

Mr. Panchapakesan, if we're able to, I would prefer

him to be here remotely by video. All right.

All right. If there is nothing further, then we are

adjourned.

(Proceedings concluded at 12:23 p.m.)

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C E R T I F I C A T E

I, HILDA E. LOPEZ, do hereby certify that I am duly

appointed and qualified to act as Official Court Reporter for

the United States District Court for the District of Arizona.

I FURTHER CERTIFY that the foregoing pages constitute

a full, true, and accurate transcript of all of that portion of

the proceedings contained herein, had in the above-entitled

cause on the date specified therein, and that said transcript

was prepared under my direction and control.

DATED at Phoenix, Arizona, this 2nd day of November,

2023.

s/Hilda E. Lopez_______

HILDA E. LOPEZ, RMR, FCRR

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