Exhibit B 

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AFFIDAVIT IN SUPPORT OF SEARCH AND SEIZURE WARRANT

I, Amy L. Fryberger, being duly sworn, hereby depose and state as follows:

I. Training and Experience

1. I am currently assigned to the Federal Bureau of Investigation's (FBI) Phoenix,

Arizona Field Office. 1 have been employed by the FBI as a Special Agent for ten years. As part

of my responsibilities, I am charged with investigating violations of statutes applying to human

trafficking. Prior to working human trafficking cases, I was assigned to work national security,

gang, and drug investigations. During the course of my career as a Special Agent with the FBI, I

have participated in the execution of numerous search warrants, seizure warrants, and arrests of

individuals for violation of federal law.

2. I am familiar with the facts and circumstances described herein. This affidavit is

based upon my personal involvement in this investigation, my training and experience, and

information obtained from various law enforcement personnel and witnesses, including

information that has been reported to me either directly or indirectly, but does not purport to set

forth my complete knowledge or understanding of the facts related to this investigation. Unless

specifically indicated otherwise, all conversations and statements described in this affidavit are

related in substance and in• part only.

II. TheFederal Indictment

1. On March 28, 2018, a Federal Grand Jury in Arizona returned a 93 count

indictment charging Michael Lacey ("LACEY"), James Larkin ("LARKIN"), Scott Spear

("SPEAR"), and other current and former employees and principals of Backpage.com with

violations of Title 18, United States Code, Section 371 (Conspiracy); Title 18, United States

Code, Sections 1952(a)(3)(A) (Travel Act — Facilitating Prostitution); and Title 18 U.S.C. §§

1956 and 1957, Concealment, International and Transactional Money Laundering and

Conspiracy to Commit Money Laundering. A copy of the indictment is attached as Exhibit A.

2. The indictment alleges that LACEY, LARKIN, SPEAR and others conspired to

use the internet to commit violations of the Travel Act, specifically, that they knowingly

facilitated the commission of prostitution related offenses that are in violation of state or local

laws thought the internet by operating Backpage.com. The next 50 counts allege individual

violations of the Travel Act. Each count relates to a specific advertisement that was posted on

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Backpage where LACEY, LARKIN, SPEAR, and others are alleged to have knowingly

attempted to facilitate prostitution crimes by permitting the ads to be posted and/or by

affirmatively editing the ads. The remaining counts in the indictment allege several types of

money laundering as well as a conspiracy to commit money laundering. Since its creation in

2004, Backpage has earned approximately $500 million in prostitution-related revenue and it is

alleged that LACEY, LARKIN, SPEAR, and others took various steps to launder the money,

including routing the proceeds of Backpage's business account through seemingly-unrelated

entities, wiring money into and out of foreign bank accounts, and converting proceeds into and

out of bitcoin and other forms of cryptocurrency.

III. Purpose ofApplicationfor Seizure Warrant

1. This affidavit is made in support of an application for a search warrant based on

probable cause to search the following locations for records and materials that are relevant to the

above mentioned crimes and for proceeds of the above referenced crimes.

i. Subject Location 1: A residence owned by LACEY, located at 3300

East Stella Lane, Paradise Valley, Arizona 85253 (further described in

Attachment A-1);

ii. Subject Location 2: A residence owned by Creek Hideaway LLC,

located at 10647 North State Route 89A, Sedona, Arizona (further

described in Attachment A-2);

iii. Subject Location 3: A residence owned by LARKIN, located at 5555

North Casa Blanca Drive, Paradise Valley, Arizona 85253 (further

described in Attachment A-3);

iv. Subject Location 4: A safe deposit box utilized by SPEAR, located at

Gainey Ranch Branch (Br 05)/NBA (Phoenix Metro Market-NE),

7375 East Doubletree Ranch Road, Scottsdale, Arizona 85258 (further

described in Attachment A-4).

IV. Factsin Support ofProbable Cause

1. A federal grand jury found LACEY, LARKIN, SPEAR, and others were involved

in a conspiracy to commit several different forms of money laundering. From my training and

experience, I know that individuals who engage in money laundering try to conceal their assets by

maintaining multiple bank accounts, domestically and overseas, as well as in assets such as

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cryptocurrency that are not as readily discoverable by law enforcement officers. From my

involvement in this investigation, I am aware of the following:

a. International Travel and BankingTransactions

i. On November 7, 2016, LACEY met with two bank employees, Lin

Howard and Abran Villegas of Arizona Bank & Trust, in Phoenix, Arizona. Both employees

were subsequently interviewed by law enforcement agents concerning their November 7th

meeting with LACEY.

ii. Howard stated LACEY asked her how assets get seized and how asserts

can be protected from seizure. LACEY informed Howard that he had just been released from

jail in California and that one of his attorneys had put their house up for his [LACEY's] bond.

Howard did not provide LACEY with any advice, in fact, she was shocked that LACEY would

ask her such a question. LACEY proceeded to tell Howard that his attorney told him [LACEY]

about the Cook Islands and places around the world such as Nevis, were good places to protect

his assets. LACEY told Howard that he was not looking to avoid paying taxes; he was trying to

put a percentage of his assets offshore to protect them from government seizure. After the

meeting with LACEY, Howard started doing research on LACEY, his transactions, and also

reached out to Arizona Bank & Trust's Anti-Money Laundering Group. Based on this, Howard

learned that LACEY was not following the bank's procedures for wire transfers and the wires

being transferred in and out of LACEY's accounts appeared to be money laundering. Howard

also told the interviewing agents that she has worked in banking in Arizona for the past 10-11

years and prior to her conversation with LACEY, she has never had a conversation with anyone

about moving their money offshore. Howard said she was in disbelief that LACEY attempted to

seek her advice in moving money offshore or ask the bank's opinion on moving assets.

iii. Villegas recalled LACEY asking him and Howard for recommendations

as to where he could put his money to protect it from being seized. Villegas did not remember

where specifically LACEY said he was going to take his money, but reiterated that LACEY was

asking for recommendations for someone to help him shield his assets. Similar to Howard,

Villegas did not provide LACEY with any recommendations. LACEY informed Villegas that

his [LACEY] attorney is the trustee on LACEY's accounts and the attorney told LACEY about

ways to shield his money and accounts. Villegas said LACEY mentioned that he sold Village

Voice Media and Backpage and told Villegas that he was living off the proceeds of those sales.

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Villegas said that, in addition to the conversation about hiding his assets, LACEY talked to

Villegas about his accounts and asked him to perform some wire transfers. When asked about a

$12 million wire transfer [note: this should be $16.5 million wire transfer] that was wired out of

LACEY's account in December 2016, Villegas said he was on vacation at the time of the wire

transfer and said the wire was a "surprise" to him. Villegas said Arizona Bank & Trust later

decided to sever its relationship with LACEY. Villegas said LACEY called Villegas and asked

him why he was being pressured by the bank to close LACEY's accounts. LACEY further told

Villegas that he had not yet been convicted and that he was being treated as if he was "guilty

until proven innocent." LACEY also said that the money in his account was from legitimate cash

flow. Villegas said he explained to LACEY that he was not being pressured and that Arizona

Bank & Trust's reputation was at risk. Villegas said he has been in banking since 1999 and has

never had anyone ask him how to hide assets or move money offshore.

iv. On December 29, 2016, five wire transfers of $3.3 million USD each (i.e.,

a total of $16.5 million USD) were sent from LACEY's trust/bank accounts at Arizona Bank &

Trust (also known as Dubuque Bank and Trust), to a different American bank account. The

recipient account, Johnson Bank in Arizona, is a trust account held by Becker & House, PLLC.

One day later, on December 30, 2016, the attorney submitted a request to transfer the entire

$16.5 million to an account at K&H Bank in Budapest, Hungary held by an entity called Primus

Trust Co. The request was approved and the $16.5 million wire transfer to K&H Bank in

Hungary occurred on January 3, 2017.

v. On May 15, 2017, SPEAR opened a safe deposit box at National Bank of

Arizona. On April 3, 2018, a bank employee stated that SPEAR opened the safe deposit box at

approximately the same time as $750,000 in cashier's checks were purchased. The cashier's

checks were paid for by a National Bank of Arizona account belonging to SPEAR. The same

employee stated that there is a possibility that the cashier's checks could be located in the safe

deposit box.

vi. As discussed in the indictment, Backpage and its principals have utilized

crypto currency as a means to facilitate prostitution and money laundering. For example,

between September 4, 2015, and November 23, 2015, Backpage customers bought about one

million "adult" ads with bitcoin, which Backpage then sold to a third-party for approximately

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$8.6 million. These funds were sent from international bank accounts into Backpage-controlled

domestic accounts. Some of the funds were then sent to Backpage principals such as LACEY

and LARKIN.

vii. The investigation has also revealed other evidence that LARKIN and other

Backpage principals have utilized bitcoin and other crypto currency in furtherance of money

laundetting efforts. Members of the investigative team have reviewed record of the following

accounts: Branch Banking & Trust account number ending in -2008, belonging to Website

Technologies (which, as discussed in the indictment, is a Backpage-related entity), held in

Arizona ("BBT Account"); Arizona Bank & Trust account number ending in -6211 belonging to

Cereus Properties (which, as discussed in the indictment, is another Backpage-related entity),

held in Arizona ("AZBT Account"); and Charles Schwab account number ending in -4693 in the

name of LARKIN ("Schwab Account"). Additionally, investigators have reviewed GoCoin

transactions related to certain ads posted on Backpage, specifically including ads that related to

victims A.C., S.F., T.S., S.L., K.O., and R.W, several of whom were minors when they were

trafficked. Finally, investigators have reviewed emails associated with the email addresses used

to post some of the ads promoting the trafficking of A.C., S.F., T.S., S.L., K.O., and R.W. From

this review, investigators have observed the following:

1. On September 6, 2015, a bitcoin account associated with the

owner of the email address who trafficked A.C, and S.F. paid

Backpage about $4 worth of bitcoin in order to post an ad

promoting the trafficking of those victims in Palm Springs,

California.

2. On September 15, 2015, an email from the same email address

owner indicated a payment to Backpage of about $8 worth of

bitcoin in order to "Fund Account" for

palmsprings,backpage.com. Based on information learned

through this investigation, it is believed that to "Fund Account"

means that the email address owner provided bitcoin to

Backpage as payment for credit to be used at a later time to pay

for Backpage ads.

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3. On October 6, 2015, the same email address owner paid

Backpage about $1 worth of bitcoin to "Fund Account" on

palmsprings.backpage.com.

4. On October 30, 2015,.a bitcoin account associated with the

owner of the email address who trafficked T.S., S.L., K.O., and

R.W. paid Backpage about $1 worth of bitcoin in order to post

an ad promoting the trafficking of those victims in Columbus,

Ohio.

5. On November 2, 2015, this same email address owner paid

Backpage about $1 worth of bitcoin to "Move Ad to Top of

Listings" in the Columbus, Ohio Backpage ads.

6. On November 21, 2015, this same email address owner paid

Backpage about $1 worth of bitcoin to Backpage for credit for

that email owner's Backpage ad account.

7. Between September 4, 2015, and November 23, 2015,

Backpage customers bought about one million "adult" ads from

Backpage with bitcoin; which Backpage then sold to GoCoin

for approximately $8.6 million. Included among the bitcoin

sold to GoCoin during this period were the six payments the

pimps made to Backpage to purchase ads to promote child

prostitution.

8. Between December 14, 2015, and December 29, 2015, a

GoCoin account held in Slovakia wircd over $1.25 million to

the BBT Account in the United States. Based on a review of

GoCoin's financial records and GoCoin's pattern of payments

to Backpage for bitcoin sales, it is believed that this $1.25

million represented GoCoin's partial payment to Backpage for

the bitcoin Backpage sold to GoCoin during the period of

September 4, 2015, through November 23, 2015.

9. On December 31, 2015, the BBT Account wired $811,424 to

the AZBT Account.

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10. On January 11, 2016, the AZBT Account wired approximately

$1.3 million to LARKIN's Schwab Account.

1 1. From LARICIN's Schwab Account, over the period of March

2016 through January 2017, almost $1,100,000 was sent to pay

for services and for a property LARKIN owns in France.

12. These transactions show that LARKIN has benefited from

millions of dollars of revenue derived from illicit prostitution

ads. Additionally, these transactions show that LARKIN has

moved funds between accounts before eventually sending these

funds to pay for properties he holds abroad. This layering

suggests that LARKIN strategically moves funds to evade

seizure by law enforcement. The complexity of the transactions

also suggests that LARKIN is actively engaged in concealment

of illicit funds.

viii. Based on my review of records in this investigation and my discussions

with other law enforcement personnel in this investigation, I also know that the Backpage

Operators have also used various other financial vehicles to conducting their money laundering

to include: wire transfers, checks, direct deposits, cash, and gift cards.

ix. Both LACEY and LARKIN engage in international travel. The

investigation shows LACEY recently traveled to Mexico. When LACEY returned to Phoenix,

Arizona from Mexico on February 28, 2018, he was in possession of $3,000.00 in U.S. Currency.

LACEY is scheduled to depart Phoenix, Arizona on April 9, 2018, for a three week trip to Spain

and Portugal.

x. LARKIN purchased an apartment home in Paris, France in 2016 and has

spent approximately $100,000 remodeling the apartment. LARKIN holds bank account in

Australia, France, and Switzerland. From February 16, 2018 -- February 24, 2018, LARKIN

traveled from San Francisco, California to Paris, France. LARICIN also departed San Francisco,

California on March 30, 2018, for Dublin, Ireland. He is expected to return to Phoenix, Arizona

on April 6, 2018.

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xi. Both LACEY and LARKIN own properties domestically as well. These

properties were acquired after 2010 in Arizona, California, and Illinois. They are valued at over

$25,000,000.

a. Probable Causefor each Subject Location

i. The property located at 3300 East Stella Lane, Paradise Valley, Arizona

85253 was purchased by LACEY on November 18, 2005. A loan secured by the property was

obtained by LACEY on June 23, 2010 and a house was built in 2011. A utility check was

conducted on March 29, 2018, and records reveal the utilities are being paid by LACEY.

LACEY was seen by surveillance units turning into this residence on March 29, 2018. On April

3, 2018, LACEY 's wife was observed leaving the home and their cars were observed parked on

the property as well. A search of the Arizona Department of Motor Vehicles database on March

27, 2018, revealed Arizona Driver's License Number D01375492 was issued to Michael Gerard

LACEY at 3300 E. Stella Lane, Paradise Valley, Arizona 85253 was issued on January 22, 2017.

Additionally, the following vehicles are registered to LACEY at 3300 E. Stella Lane, Paradise

Valley, Arizona 85253: (1) a 2014 Jaguar, VIN SAJWA4HA1EMB52384, Arizona License Plate

number BKA4866 and (2) a 2010 Dodge, VIN 1D7RV1CT2AS158579, Arizona License Plate

number CA35324.

ii. The property located at 10647 North State Route 89A, Sedona, Arizona

86336 was purchased by LACEY on September 5, 2013. The property is located on over an acre

of land with a house located on the property overlooking a creek, typical of a Scdona, Arizona

vacation property. A special warranty deed was filed by LACEY on March 29, 2017, where

LACEY granted the property to Creek Hideway LLC, a Delaware limited liability company for

$0. The address associated with Creek Hideway LLC is 3300 East Stella Lane, Paradise Valley,

Arizona. A utility check was conducted on March 29, 2018, that revealed utilities are currently

being paid by Michael LACEY. Per open source internet searches, the property is not currently

for rent or sale.

iii. The property located at 5555 North Casa Blanca Drive, Paradise Valley,

Arizona 85253 was purchased by LARKIN on October 21, 2005. The property was conveyed to

the Ocotillo Family Trust, in care of James and Margaret LARKIN, Trustees, on March 12,

2015. LARKIN deeded the property to Margaret LARKIN on March 9, 2017, as sole and

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separate property. A search of the Arizona Department of Motor Vehicles database on March

27, 2018, revealed that on May 16, 2016, James Anthony LARKIN was issued Arizona Driver's

License Number D05996617, listing his address as 5555 North Casa Blanca Drive, Paradise

Valley, Arizona 85253. Additionally, the following vehicles are registered to James and

Margaret LARKIN at 5555 North Casa Blanca Drive, Paradise Drive, Arizona 85253: (1) a 2014

Porshe, VIN WPOAB2A92ES121390, Arizona License Plate number BA6385, (2) a 1972 BMW,

VIN 2240110, Arizona License Plate number BKM5166, (3) a 2016 Mercedes, VIN

4.1GDF7EE5GA675517, Arizona License Plate number BA6381, and (4) a 2016 BMW, YIN

WBXHT3C30G5F65711, Arizona License Plate number BVS4831. A utility check was

conducted on March 27, 2018 that revealed the utilities were paid in March 2018 by LARKIN.

4, Safe deposit box number ending in -7224 located at National Bank of Arizona,

7275 East Doubletree Ranch Road, Scottsdale, Arizona 85258 is held in the name of Scott and

Elona SPEAR. On or about May 15, 2017, the safe deposit box was opened by SPEAR using

$98 of funds from a Branch Banking & Trust account number ending in - 2008. This bank

account belongs to Website Technologies, a Backpage-related entity that is held in Arizona.

From 2015 — 2016, bank accounts belonging to Website Technologies received wire transfers

from foreign accounts totaling over $100 million dollars. Wire transfers and checks drawn off of

these bank accounts were used to facilitate and promote prostitution and also funneled money

into other accounts directly benefiting LACEY, LARKIN, and SPEAR. This safe deposit has

only been accessed by SPEAR and was last accessed on December 8, 2017.

5. I know from my training and experience that individuals will keep documents

relating to their own illegal profits from fraudulent schemes and the laundering of those profits in

their homes. This is because the documents concern their own personal finances and assets as

opposed to the finances of the business and they wish to keep documents relating to such private

matters in a place to which other individuals have limited access.

6. 1 know from my training and experience that individuals who gain proceeds from

illegal activities will need to launder those proceeds in order to conceal the source of their funds

and often do so by purchasing assets in other individuals' names or depositing them in bank

accounts in the names of other individuals, and transferring assets into the names of other

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individuals. Individuals who want to hide illicitly gained proceeds will also use cash to eliminate

a paper trail.

7. I know from my training and experience that individuals who keep large amounts

of currency at their residence, in a safety deposit box, or on their person take extra measures to

secure and protect that currency. Given that the main source of income for LACEY, LARKIN

and SPEAR, since at least 2008, has been from Backpage proceeds, and because a majority of

those proceeds are traceable to prostitution and sex trafficking ads, I believe that the safe deposit

box will contain valuables, cash and/or other monetary instruments.

8. Computer hardware, software, documentation, passwords, and data security

devices may be important to a criminal investigation in two distinct important respects: (1) the

objects themselves may be instrumentalities, fruits, or evidence of crime(s), and/or (2) the

objects may have been used to collect and store information about crimes in the form of

electronic data. Rule 41 of the Federal Rules of Criminal Procedure permits the government to

search and seize computer hardware, software, documentation, passwords, and data security

devices which are (1) instrumentalities, fruits, or evidence of crime; or (2) storage devices for

information about a crime.

V. Search Methodologyto beEmployed

1. It would be extremely difficult, if not impossible to

conduct a thorough on-site review of all of the potential evidence in this case. Given these

constraints, the search methodology to be employed is as follows:

2. All computers, computer hardware and any form of

electronic storage that could contain evidence described in this warrant will be seized for an offsite search for evidence/assets as described in the attachments of this warrant. It is anticipated

that mirror copies or images of such evidence will be made if the failure to do so could otherwise

potentially alter the original evidence.

3. Consistent with the information provided within

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this affidavit, contextual information necessary to understand the evidence and to establish

admissibility of the evidence in subsequent legal proceedings will also be sought by investigative

agents.

4. Additional techniques to be employed in analyzing

the seized items will include (1) surveying various file directories and the individual files they

contain, (2) opening files to determine their contents, (3) scanning storage areas, (4) performing

key word searches through all electronic storage areas to determine whether occurrences of

language contained in such storage areas exist that are likely to appear in the evidence described

in this affidavit and attachments, and (5) performing any other data analysis techniques that may

be necessary to locate and retrieve the evidence/assets described in this affidavit and it

attachments.

VI. Conclusion

1. Based on the facts and circumstances stated above, there is probable cause to

believe that items of evidence as well as assets derived from illicit activity are located in the

aforementioned locations.

Amy L. Fryberger

FBI Special Agent

Subsep:bed to and sworn to me

this '‘),` day of April, 2018

Honorable Eileen S. Willett

United States Magistrate Judge

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