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MICHAEL BAILEY

United States Attorney

District of Arizona

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

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

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

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

Assistant U.S. Attorneys

40 N. Central Avenue, Suite 1800

Phoenix, Arizona 85004-4408

Telephone (602) 514-7500

JOHN J. KUCERA (Cal. Bar No. 274184, john.kucera@usdoj.gov)

Special Assistant U.S. Attorney

312 N. Spring Street, Suite 1200

Los Angeles, CA 90012

Telephone (213) 894-3391

BRIAN C. RABBIT

Acting Assistant Attorney General Criminal Division, U.S. Department of Justice

REGINALD E. JONES (Miss. Bar No. 102806, reginald.jones4@usdoj.gov)

Senior Trial Attorney, U.S. Department of Justice

Child Exploitation and Obscenity Section 

950 Pennsylvania Ave N.W., Room 2116

Washington, D.C. 20530

Telephone (202) 616-2807 

Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America,

Plaintiff, 

vs. 

Michael Lacey, et al.,

Defendants.

No. CR-18-00422-PHX-SMB 

GOVERNMENT’S MOTION FOR 

LIMITED DISCLOSURE OF TAX 

INFORMATION

-andGOVERNMENT’S MOTION FOR 

PROTECTIVE ORDER

The United States moves the Court to authorize disclosure of tax information to 

Defendants pursuant to 26 U.S.C. § 6103(i)(4). The United States also moves for a 

protective order pursuant to Rule 16(d)(1) to restrict dissemination of the discovery 

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material produced in this case. Undersigned counsel has consulted counsel for Defendants, 

who do not object to entry of the proposed protective order.

Under 26 U.S.C. § 6103(i)(4)(A), the Court may authorize disclosure of return and 

tax information for use in a criminal case:

[A]ny return or taxpayer return information obtained under [6103(i)](1) or (7)(C) may be disclosed in any judicial or administrative proceeding 

pertaining to enforcement of a specifically designated Federal criminal 

statute or related civil forfeiture (not involving tax administration) to which the United States or a Federal agency is a party—

(i) if the court finds that such return or taxpayer return information 

is probative of a matter in issue relevant in establishing the 

commission of a crime or the guilt or liability of a party, or 

(ii) to the extent required by order of the court pursuant to section 

3500 of title 18, United States Code, or rule 16 of the Federal Rules 

of Criminal Procedure.

Here, disclosure is warranted. The United States obtained tax information1 relating 

to Defendants, Backpage.com LLC, and related entities during the investigation pursuant 

to 26 U.S.C. § 6103(i)(1). Defendants have since been charged with conspiracy, Travel 

Act violations, and money laundering relating to their operation of Backpage.com. The

government believes that tax information obtained during the investigation will be relevant 

to show a year-by-year summary of Backpage’s revenues, help trace the flow of money

between Backpage, the related entities, and Defendants, and help summarize Defendants’

Backpage-related compensation, among other reasons. The government believes that 

return and return information are therefore “probative of a matter in issue relevant in 

establishing the commission of a crime.” See 26 U.S.C. § 6103(i)(4)(A)(i). Defendants do 

not agree that the information is relevant to the trial of this matter, but agree the material 

should be disclosed to Defendants by the government. In addition, the United States 

intends to introduce summary exhibits that are premised on these records, so disclosure is 

required under Federal Rule of Criminal Procedure 16(a)(1)(E). See 26 U.S.C. 

 1 “Return” and “return information” shall be defined as set forth in 26 U.S.C. 

§ 6103(b). “Tax information” is defined as including both “return” and “return information.”

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§ 6103(i)(4)(A)(ii). Defendants continue to object to the introduction of these exhibits.

The United States also seeks a protective order. In addition to the tax information, 

the discovery material includes private information and personally identifying information 

(“PII”) relating to Defendants, Backpage.com LLC and related entities, and third parties. 

Accordingly, the United States requests that this Court authorize the disclosure of 

tax information to Defendants. The United States also requests that the Court enter a 

protective order:

1. Permitting the government to provide to defense counsel, without redaction, 

tax information and PII to the extent that PII is present in discoverable materials;

2. Permitting defense counsel to share materials containing tax information and 

PII with other members of the defense team, including experts, investigators, and other 

professionals retained by defense counsel to assist in the preparation of the defense;

3. Ordering all members of the defense team to safeguard and not disclose the 

tax information and PII provided, other than to the extent necessary to prepare the defense;

4. Permitting defense counsel to share materials containing tax information and 

PII with Defendants to the extent necessary to prepare the defense;

5. Ordering all Defendants to safeguard and not disclose the tax information 

and PII provided (except for Defendants’ own tax documents and those of entities in which 

they hold an interest);

6. Permitting defense counsel to review materials containing tax information 

and PII with potential witnesses to the extent necessary to prepare the defense;

7. Prohibiting potential witnesses from retaining any materials containing tax 

information or PII during the course of the litigation unless defense counsel ensures that 

all tax information and PII has been redacted from the copies to be retained; and 

8. Ordering the defense team, including Defendants, to destroy, at the 

conclusion of this matter, all tax information and PII in its possession, except that defense 

counsel shall be allowed to retain materials containing tax information and PII until the 

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time expires for all appeals, collateral attacks, other writs or motions challenging the 

conviction or sentence, and actions for professional malpractice, and Defendants shall be 

permitted to retain their own tax information and the tax information of entities in which 

they hold an interest without limitation.

Respectfully submitted this 7th day of August, 2020.

MICHAEL BAILEY

United States Attorney

District of Arizona

s/Andrew C. Stone

KEVIN M. RAPP

MARGARET PERLMETER

PETER S. KOZINETS

ANDREW C. STONE

Assistant U.S. Attorneys

JOHN J. KUCERA

Special Assistant U.S. Attorney

BRIAN C. RABBIT 

Acting Assistant Attorney General 

U.S. Department of Justice 

Criminal Division, U.S. Department of Justice

CERTIFICATE OF SERVICE

I hereby certify that on August 7, 2020, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing a copy to the applicable CM/ECF registrants. 

s/Gaynell Smith

U.S. Attorney’s Office

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