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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America,

Plaintiff,

v. 

Michael Lacey, et al.,

Defendants.

No. CR-18-00422-001-PHX-DJH

ORDER 

A three-month Jury Trial in this matter commenced on August 29, 2023. 

(Doc. 1741). At the close of the Government’s case, Defendants orally moved for a 

judgment of acquittal on all charges under Federal Rule of Criminal Procedure 29 (“Rule 

29”). (Doc. 1903 at 19–93). The Court exercised its discretion under Rule 29(b) to reserve 

its ruling until after the Jury returned its verdict. (Doc. 1852). 

On November 16, 2023, the Jury returned a verdict that found Defendant Michael 

Lacey (“Mr. Lacey”) guilty of one count of International Concealment Money Laundering 

(Count 100)1and not guilty of one count of International Promotional Money Laundering 

(Count 63). (Doc. 1978). The Jury did not reach a verdict on the remaining counts against 

Mr. Lacey, which consisted of charges of Conspiracy to Commit Travel Act violations 

(Count 1); Travel Act violations (Counts 2–51); Conspiracy to Commit Money Laundering 

(Count 52); Domestic Concealment of Money Laundering (Counts 53–62); International 

Promotional Money Laundering (Counts 64–68); and Transactional Money Laundering 

(Counts 69, 70, 81, 83–84, 86, 88–92 and 94–99). (See Docs. 1978; 1981). 

1 All “Count” references are to the Superseding Indictment (Doc. 230). 

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The Jury found Defendant Scott Spear (“Mr. Spear”) guilty of Conspiracy to 

Commit Travel Act violations (Count 1); the Travel Act violations alleged in Counts 2–18;

Conspiracy to Commit Money Laundering (Count 52); Domestic Concealment of Money 

Laundering (Counts 53–62); and Transactional Money Laundering (Counts 71–78, 85, 

and 93). He was found not guilty as to the Travel Act violations alleged in Counts 19–51, 

and the money laundering counts alleged in Counts 63–68. 

Defendant John Brunst (“Mr. Brunst”) was found guilty of Conspiracy to Commit 

Travel Act violations (Count 1); Conspiracy to Commit Money Laundering (Count 52); 

domestic Concealment Money Laundering (Counts 53–62), International Promotional 

Money Laundering (Counts 64–68); and Transactional Money Laundering (Counts 78–84, 

86–93). He was found not guilty of all the Travel Act violations alleged in Counts 2–51, 

and of one count of International Promotional Money Laundering (Count 63). 

Defendants Andrew Padilla (“Mr. Padilla”) and Joye Vaught (“Ms. Vaught”) were 

acquitted on all charges in the Superseding Indictment.2 

Following the verdict, Messrs. Lacey, Brunst, and Spear (collectively, 

“Defendants”) asked to supplement their oral Rule 29 Motions, which the Court granted. 

Those supplemental motions are now fully briefed.3 Defendants have also jointly filed a 

Motion for New Trial (Doc. 2009) under Federal Rule of Criminal Procedure 33 

(“Rule 33”), which is also fully briefed.4

The Court now issues its ruling.5 

/ / /

2

In light of their acquittal, Mr. Padilla and Ms. Vaught’s oral Rule 29 motions are denied

as moot. 

3 Each Defendant joined in their co-Defendant’s Supplemental Motion. The briefing on 

Mr. Lacey’s Supplemental Rule 29 Motion is at Docs. 2004; 2020; 2033; the briefing on 

Mr. Spear’s Supplemental Rule 29 Motion is at Docs. 2006; 2021; 2030; and the briefing 

on Mr. Brunst’s Supplemental Rule 29 Motion is at Docs. 2007; 2019; 2029. 

4 The Government’s Response is at Doc. 2022 and the Defendants’ Reply is at Doc. 2031. 

5 Defendants each request oral argument on their Motions. The Court finds that further 

oral argument will not aid the Court’s decisional process. See e.g., Partridge v. Reich, 141 

F.3d 920, 926 (9th Cir. 1998); Lake at Las Vegas Investors Group, Inc. v. Pacific. Dev. 

Malibu Corp., 933 F.2d 724, 729 (9th Cir. 1991).

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I. BACKGROUND6

Considered in the light most favorable to the Government, its proof at trial 

established the following: 

Launched in 2004 in Phoenix, Arizona, Backpage.com (“Backpage”) was an online 

website offering classified ads for a variety of goods and services. (Trial Tr., Doc. 1786 at 

6:6–11). Defendants owned Backpage with Mr. James Larkin (“Mr. Larkin”)7from its 

inception in 2004 until the website was sold to Mr. Carl Ferrer (“Mr. Ferrer”) in April of 

2015. (Trial Tr., Doc. 1786 at 11:23–12:5; 78:25–79:1; Trial Ex. 5). Defendants had 

leadership roles in Backpage’s parent company Village Voice Media (“Village Voice”) 

during that time: Mr. Lacey served as Chief Editorial Officer; Mr. Brunst served as Chief 

Financial Officer (“CFO”); and Mr. Spear was an Executive Vice President (“VP”). (Trial 

Ex. 5). Mr. Larkin was the Chief Executive Officer (“CEO”). (Id.) From 2004 to 2018, 

Mr. Ferrer was a project manager at Backpage, then became a sales and marketing director 

of Backpage. (Trial Tr., Doc. 1786 at 5:25–6:1; 16:4–9). Mr. Spear was Mr. Ferrer’s 

immediate supervisor. (Id. at 10:5–20). Mr. Ferrer testified that Messrs. Spear, Larkin and 

Brunst were his superiors. (Id. at 35).

Mr. Ferrer testified that Backpage was started as a competitor to Craigslist, an online 

advertising site that “was eroding into the revenue of [Village Voice] newspapers.” (Trial 

Tr., Doc. 1786 at 25:24–25). To generate revenue, Backpage initially decided that it would 

only charge for “Adult” ads. (Id. at 26:10–11). The Adult section on Backpage contained 

the categories “Female Escorts”; “Male Escorts”; “Transsexual Escorts”; “Body Rubs”; 

“Adult Jobs”; and “Phone and Web.” (Id. at 6:18–20). Mr. Ferrer characterized the ads in 

the Female Escort section of Backpage between 2004 and 2009 as prostitution ads. 

(Id. at 7:10–12). These types of ads were profitable because escorts “needed repeat 

business” so they would often post their ads every day. (Trial Tr., Doc. 1900 at 96:1–15; 

6 The Court’s review of the trial evidence was significantly hampered by the fact that 

neither the Government nor Defendants provided specific citations to the Court’s docket 

in their briefings. 

7 Mr. Larkin’s death preceded the commencement of trial. 

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95:4–96:19). 

Messrs. Spear and Ferrer soon realized that Backpage’s “Female Escort” section 

was by far the most profitable section, and so they focused Backpage’s growth efforts 

accordingly. (Trial Tr., Doc. 1786 at 90:12–91:22; Trial Exs. 1056, 1056a, 1057; Trial Tr., 

Doc. 1900 at 96:1–15). After Craigslist closed its Adult section in 2010, Backpage 

experienced exponential growth in “revenue from online prostitution ads.”

(Trial Tr., Doc. 1793 at 35:23–36:9). From 2010 through 2012, Backpage’s Adult section 

yielded $138,850,097.36 compared to $208,658.90 from its non-Adult sections, i.e., a 

94.2% difference in profits. (Trial Ex. 1480).

Mr. Ferrer testified at length about Defendants’ involvement in the marketing 

strategies used to grow and/or maintain Backpage’s Female Escort section; Defendants’ 

efforts to fend off outside groups’ attempts to shut Backpage down; as well as the 

Defendants’ knowledge of Backpage’s business practices, Backpage’s banking issues, and 

the sale of Backpage to Mr. Ferrer in 2015. 

A. “Content Aggregation”

Mr. Ferrer stated that Mr. Spear directed the roll-out of Backpage’s “content 

aggregation” marketing strategy in the early years of Backpage. (Trial Tr., Doc. 1786 at 

26:16–24). “Content aggregation” was considered the “internal code for stealing ads from 

Craigslist”—and more specifically, primarily stealing ads from Craiglist’s “Erotic 

Services” section. (Id.) This strategy required staff to identify an Adult escort ad on 

Craigslist and repost it on Backpage in hopes that the original posters and any responding 

users would start paying to post ads on Backpage instead of Craigslist. (Id. at 27:3–14). 

Mr. Spear and Mr. Ferrer presented the idea to Mr. Brunst as a strategy to meet growth 

goals in 2009 because Mr. Brunst’s approval was needed to fund the staffing needed to 

execute this strategy. (Trial Tr., Doc. 1792 at 42:16–43:11; Trial Tr., Doc. 1786 at 30:6–

12 and 89:1-90:1–7 (discussing plan to “seed the site, the Female Escorts category, with 

200 independent escorts”)). Mr. Brunst approved the budget plan and Mr. Spear authorized 

Mr. Ferrer to use the strategy “in every major metro market in the U.S.” (Trial Tr., Doc. 

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1786 at 29:24–25; Trial Tr., Doc. 1791 at 16:18–20:9; Trial Exs. 10 and 10a). Around 

2010, when Craigslist dropped its Adult section, this type of content aggregation strategy 

was no longer necessary because Backpage then had “the monopoly” on Adult ads. (Trial 

Tr., Doc. 1786 at 20–23). 

B. Backpage’s Relationship with “The Erotic Review”

The “secret sauce” to increasing Backpage’s adult ad revenue, as characterized by 

Mr. Ferrer, was a hyperlink exchange agreement Backpage had with The Erotic Review 

(“TER”), a prostitution review website described as “Yelp for prostitution.” (Trial Tr., 

Doc. 1786 at 7) (“Johns who frequent prostitutes . . . post reviews in TER”). Starting 

around 2006 or 2007, when a person posted a review of their experience on TER, TER 

would include a link to the ad on Backpage, and vice versa. (Trial Tr., Doc. 1786 at 32:22–

33:7; 39:12–15; Trial Tr., Doc. 1853 at 134:20–136:9). Under increasing pressure from 

outside groups to remove links to the TER, Backpage ceased including the hyperlinks in 

their Adult ads in 2011 or 2012, but still allowed posters to include their TER “ID number.” 

(Trial Tr., Doc. 1786 at 39:22–24; 40:7–10). TER ID numbers remained on Backpage ads 

through 2017. (Id. at 40:15). The TER relationship with Backpage also included a “banner 

ad exchange program” where each website featured banner-like ads for the other on their 

respective websites. (Id. at 35:18–37:2). For years, Backpage paid TER $4,000 per month 

as part of this relationship. (Id.)

There was evidence showing Messrs. Spear and Brunst were aware of the nature 

and importance of Backpage’s relationship with TER. Mr. Ferrer discussed the importance 

of TER referral traffic with Messrs. Spear and Brunst. (Trial Tr., Doc. 1786 at 41:1–6). 

Mr. Spear was an author of the 2008 budget plan that was presented to Messrs. Larkin and 

Brunst detailing the TER partnership. That plan noted that Backpage had “struck a deal 

with TheEroticReview.com, TER, with reciprocal links it created huge brand awareness in 

this niche industry and increased page views from TER by 120,000 per day.” (Trial Ex. 

23 at 3; Trial Tr., Doc. 1791 at 70:10–73:20; Trial Tr., Doc. 1972 at 43:12–44:1; Trial Exs. 

19, 20). Mr. Ferrer also submitted TER invoices to Messrs. Spear and Brunst for approval. 

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(Trial Tr., Doc. 1792 at 27:17–28:6, 35:11–12). Mr. Spear signed the checks for these 

payments. (Trial Tr., Doc. 1853 at 142:13–143:5). Mr. Spear closely tracked the 

relationship with TER and according to Mr. Ferrer, Mr. Spear understood that “the traffic 

from The Erotic Review was very, very important for Backpage’s success.” (Trial Tr., 

Doc. 1792 at 65:5–24, 84:24–85:4). 

Mr. Ferrer also testified that Messrs. Spear, Brunst, and Larkin regularly received 

Google Analytics reports showing TER as the number one source of non-search engine 

referrals to Backpage. (Trial Tr., Doc. 1786 at 35:6–12, 41:1–7; Trial Tr., Doc. 1791 at 

21:21–27:5; Trial Exs. 19, 986, 986a, 1151, 1151a, 1919, 1919a, 1924, 1926). 

C. “Super Posters”

Backpage also developed an affiliate program with what Mr. Ferrer described as 

bulk prostitution advertisers, or “super posters.” These super posters would have 

“thousands of prostitution ads that they could bring to the site.” (Trial Tr., Doc. 1786 at 

41:8–19). Messrs. Larkin and Spear sent Mr. Ferrer to New York City to meet with several

of these posters in person. (Id. at 41:20–42:23). In exchange for posting their ads on 

Backpage, Backpage gave these super posters VIP treatment, including access to managers 

like Mr. Ferrer who could provide them advice on how to tailor their ads for Backpage. 

(Trial Tr., Doc. 1786 at 46:23–47:4).

D. Efforts to Moderate Explicit Ad Content

Mr. Ferrer also testified extensively about Backpage’s efforts to moderate ads that 

otherwise contained sexual content or express offers for prostitution. He told the Jury that 

these efforts started as early as 2006 with a PowerPoint prepared by Mr. Spear that aimed 

at getting rid of ad images depicting sex acts, like “a woman giving a man oral sex.” (Trial 

Tr., Doc. 1786 at 58:2–19 (stating that Mr. Spear coined a standard of “between Hustler

and Playboy . . . [t]hat meant sex act pics needed to go and you could still have full nudity 

but couldn’t have extreme closeups of genitalia”), 65:1). The removal of such images, 

however, did not mean the whole ad was removed or that the user was blocked from posting 

on Backpage. (Id. at 59:3–6, 60:7, 66:7–10). “[T]he moderation department’s main 

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priority was to not ban prostitution advertisers but to provide tools and mechanisms to 

coach them. It was about growing revenue and not removing illegal content.” (Trial Tr., 

Doc. 1824 at 25:18–21). Mr. Spear would direct Mr. Ferrer to scrub ads to edit and remove 

sex act images and sex act language. (Trial Tr., Doc. 1792 at 9–11). Mr. Ferrer told TER 

that Mr. Spear wanted the ads to be “less escort-ish”, meaning that if the ads looked less 

like prostitution they could maintain credibility. (Trial Tr., Doc. 1792 at 60–61; Trial Ex. 

574). Mr. Ferrer explained that “[w]e wanted to keep that veneer of credibility of being 

like a Craigslist even though we were entirely -- almost entirely prostitution head-based 

revenue.” (Trial Tr., Doc. 1792 at 60:25–61:2). 

Backpage also began sanitizing the site of certain “terms [that] made the ads more 

obvious prostitution[.]” (Trial Tr., Doc. 1786 at 60:8–10, 60:15–17). For example, the 

terms “incall and outcall” were terms associated with prostitution and indicated whether 

the prostitute would come to the customer, or the customer would go to the prostitute. 

(Trial Tr., Doc. 1923 at 60). Mr. Ferrer testified that they “started removing those words 

from the ad but not deleting the ad.” (Id. at 60:17–18). Mr. Spear was responsible for 

Backpage’s terms of use, which he continually modified. (Trial Tr., Doc. 1791 at 14:15-

21). He also continued to approve changes to moderation guidelines. (Trial Tr., Doc. 1808 

at 92:10–19; Trial Ex. 1612b; Trial Tr., Doc. 1810 at 98:14–19; Trial Exs. 725, 725b). Mr. 

Ferrer said Mr. Spear approved changes to the terms and images that were allowed and 

sent Mr. Ferrer specific emails with ads “that need to be cleaned up, edited.” (Trial Tr., 

Doc. 1791 at 92:71–0; Trial Tr., Doc. 1792 at 10:2–8). Messrs. Spear and Ferrer also had 

knowledge of specific terms that needed to be changed, for example, changing “Greek” 

to “G-R-3-3-K” (Trial Tr., Doc. 1972 at 85–88; Trial Exs. 585, 585a); “hooker” to “Female 

Escort” (Trial Tr., Doc. 1786 at 90–91; Trial Exs. 1056 and 1056a); and using the term 

“roses” for “cash” (Trial Tr., Doc. 1793 at 13–14). Mr. Ferrer would alert Mr. Spear when 

local papers raised concerns about terms used in Backpage ads, or when advertisers 

complained that their ads were being removed for including coded terms. (Trial Tr., Doc. 

1791 at 27–35; Trial Ex. 2). Mr. Spear was alerted to these issues because he was Mr. 

Ferrer’s boss and had the ability to resolve the conflict. (Id.)

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Mr. Ferrer testified that ad content moderation became increasingly challenging as 

they had to clean up ads in various markets, like South Carolina, where they were under 

scrutiny. (Trial Tr., Doc. 1792 at 73–75; Trial Ex. 579). Ultimately, Mr. Spear decided to 

hire a company called El Camino to assist with ad clean-up efforts. (Trial Tr., Doc. 1793 

at 86–87). Messrs. Spear, Larkin, and Brunst approved the needed budget increases for 

content moderation, with Mr. Spear responding to one such request with: “Approved. Go 

get em.” (Trial Tr., Doc. 1792 at 106:21–107:2; Trial Tr., Doc. 1793 at 31:13). Near the 

end of 2012, Messrs. Larkin, Brunst, and Spear asked Mr. Ferrer to provide a comparison 

of revenue growth by sections from October 2010 to November 2012. (Trial Tr., Doc. 

1811 at 64:6–66:1; Trial Exs. 355, 355b). The comparison showed huge growth in Adult 

compared to all other sections, which Mr. Ferrer attributed to Backpage’s moderation 

strategy. (Trial Tr., Doc. 1811 at 65:19–20; 65:23–66:1). 

In 2012, Backpage hired attorney Elizabeth McDougall to supervise content 

moderation of Backpage ads.8 Despite her role, Mr. Ferrer said “she was sidelined a good 

portion” of the time. (Trial Tr., Doc. 1831 at 59:17–60:7; 60:9–10). 

E. Responses to Public and Law Enforcement Concerns 

Following the shutdown of the Adult escort ads on Craigslist and subsequent 

migration of ads to Backpage in 2010 and after several State Attorneys Generals (“AGs”) 

began criticizing Backpage’s “rampant” prostitution advertising, Backpage started 

receiving thousands of prostitution investigation subpoenas. (See, e.g., Trial Tr., Doc. 1791

at 62:16–25; Trial Tr., Doc. 1786 at 47:9–49:12; Trial Ex. 52). Messrs. Spear, Ferrer, and 

Larkin had “watched Craigslist be attacked by the Attorneys General and were very 

concerned that [they were] next[.]” (Trial Tr., Doc. 1786 at 48:18–25, 49:7–15). 

The number of subpoenas became so plentiful that Messrs. Spear and Brunst 

approved hiring staff to respond to them. (Trial Tr., Doc. 1791 at 62:11–15, 63:11–21, 

65:4–9). Mr. Lacey became aware that Backpage was receiving such subpoenas and in 

April 2010, he asked Mr. Spear whether there was evidence of child trafficking on the site. 

8 Defendants refused to waive the attorney-client privilege regarding their communications 

with Ms. McDougall. 

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Mr. Spear replied that: “[w]e have had subpoenas that deal with this exact issue. . . . We 

get a ton of subpoenas that we comply with on a daily basis.” (Trial Ex. 804).

Mr. Ferrer testified that they discussed a “slow dance strategy with the Attorney 

Generals” that Mr. Ferrer described as giving the AGs “very, very little but creat[ing] the 

impression that we’re doing something,” without harming revenue. (Trial Tr., Doc. 1792 

at 93:9–22, 94:1–4). To gain the AGs’ “blessing,” Messrs. Larkin and Spear directed Mr. 

Ferrer to “not throw the baby out with the bathwater” and “implement the changes 

gradually, [so] we won’t lose revenue[.]” (Trial Tr., Doc. 1795 at 25:20–26:7; Trial Ex. 

1021; Trial Tr., Doc. 1809 at 30:3–4). Mr. Ferrer continued to meet with Messrs. Larkin 

and Spear about these changes, communicated the results to staff, and solicited further 

changes “to get approved by [Mr. Spear].” (Trial Tr., Doc. 1808 at 20:11–14, 22:11–12;

Trial Exs. 73, 610).

In late 2010, Backpage learned CNN was planning an exposé on Backpage. (Trial 

Tr., Doc. 1793 at 80:20–21). It showed CNN reporter Amber Lyon posting an ad of herself 

on Backpage’s Escorts section, using text from an old Backpage ad offering a 12-year-old 

girl for sex. (Trial Ex. 1052b1). When Lyon posted her ad, her phone immediately

“start[ed] ringing off the hook.” (Trial Tr., Doc. 1808 at 59:16–23). Messrs. Lacey, Spear, 

and Brunst tried to stop rebroadcasts of the story. (Id. at 60:10–62:13). Backpage 

management watched and discussed the CNN report in early 2011. (Id. at 43:15–44:7). 

Following the broadcast, Backpage faced more pressure to remove any references 

to TER. (Trial Tr., Doc. 1808 at 82:7–16). By January 2011, Messrs. Spear and Ferrer 

agreed that moderators should remove “TER links in ads,” though they still allowed “users 

to put [in] TER IDs (just no live links).” (Trial Tr., Doc. 1808 at 24:10–19; 82; Trial. Exs. 

73, 647). Mr. Ferrer testified that removing the links would not hurt revenue because the 

johns responding to Backpage prostitution ads knew “that when it says ‘highly reviewed’ 

and then an ID number that [TER] is the place to go” to look for the advertiser’s review. 

(Trial Tr., Doc. 1808 at 25:12–19). 

Backpage also hired internet safety experts, who recommended screening ads 

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bought with prepaid cards because this was an “indicator [of] a potential trafficking ad.” 

(Trial Tr., Doc. 1809 at 36:2–8). Messrs. Spear, Larkin, and Ferrer rejected that change, 

because “up to 70 percent of our transactions came from prepaid cards[.]” (Id. at 36:9–

19). They also ignored recommendations to completely remove ads visited from TER. (Id. 

at 37:13–38:11).

F. Backpage’s Banking Problems

By 2012, U.S. financial institutions were dropping Backpage as a customer due to 

its reputation for hosting ads that were resulting in prostitution and human trafficking. 

(Trial Ex. 2042). In 2013, Backpage was dropped by its U.S.-based credit card processor,

Litle. (Trial Tr., Doc. 1786 at 69:17–70:8). That same year, Chase Bank informed 

Backpage that it “was no longer accepting transactions from Backpage.com, due to their 

involvement in human trafficking.” (Trial Ex. 173). The banks’ refusal to do business 

with Backpage meant Backpage had to expend tremendous efforts in finding ways for users 

to pay for ads. (Trial Tr., Doc. 1812 at 29:7–16). One example that proved successful was 

Backpage’s acceptance of the cash for credit Vanilla Visa card which enabled anonymous 

payment for ads. (Trial Tr., Doc 1786 at 75–76). 

Mr. Ferrer testified that he worked closely with Messrs. Brunst, Spear, and Larkin

during this time “to secure credit card processing from Europe.” (Trial Tr., Doc. 1812 at 

14:22–15:7). For example, after Chase Bank stopped accepting Backpage transactions, 

Backpage directed Chase credit card purchasers to e-Merchant Pay (“EMP”), a European 

processor that would “use a different billing descriptor that won’t say Backpage.com on 

it.” (Trial Tr., Doc. 1812 at 21:7–22; Trial Exs. 173; 1110). In September 2013, Mr. Ferrer 

wrote Messrs. Brunst and Spear about using Netcash, a Cyprus-based credit card processor. 

(Trial Tr., Doc. 1812 at 13:3–8; Trial Ex. 1092). In October 2013, Mr. Ferrer exchanged 

emails with Mr. Brunst, copying Messrs. Larkin and Spear, about getting the CCBill 

contract signed, and Mr. Ferrer’s discussions with “JetPay” regarding other banking 

solutions that would enable users to pay for Backpage ads. (Trial Tr., Doc. 1812 at 31:12–

37:23; Trial Ex. 752). 

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Backpage also sought the assistance of an outside consultant. In November 2013, 

Mr. Ferrer sent Messrs. Larkin, Brunst, and Spear the consultant’s recommendations on 

credit card transactions. (Trial Tr., Doc. 1812 at 37:24–40:13; Trial Ex. 175). Those

recommendations included using names, internet addresses, and billing descriptors that 

would not include the name “Backpage.” (Trial Tr., Doc. 1812 at 38:24–42:22; Trial Ex. 

175). The recommendations also included “load balancing across many banks with 

different billing descriptors.” (Id. at 38:10–23; Trial Ex. 175). Mr. Ferrer explained that

this meant “adding a lot of banks” and “distributing . . . transactions” to stay below 

thresholds that would otherwise trigger reviews by Mastercard and Visa. (Trial Tr., Doc. 

1812 at 38:10–23). In implementing these recommendations, Backpage formed an entity 

called Classified Solutions in England that could do credit card processing with EMP in 

Bulgaria; it then spread payments from EMP across other banks including Borgun in 

Iceland and Bank Frick in Liechtenstein. (Id. at 43:18–44:6; Trial Tr., Doc. 1814 at 76:3; 

Trial Ex. 6189). Mr. Brunst, who continued to serve as Backpage’s CFO, avoided using a 

“backpage.com” email address because of the “reputational risk” of being associated with 

Backpage. (Trial Tr., Doc. 1812 at 14:2–9; 13:9–14:1). Indeed, when a Backpage 

employee asked Mr. Brunst whether they could replace their “backpage.com” email 

addresses with “websitetechnologies.com,” Mr. Brunst replied: “We need to think this thru 

or all the work to separate it from BP will be lost.” (Trial Ex. 177). 

Backpage executives also “opened up holding companies with innocuous names 

like Classified Solutions, Payment Solutions, just general-sounding companies” that did 

not say Backpage. (Trial Tr., Doc. 1812 at 15:12–23; Trial Tr., Doc. 1853 at 74:13–14). 

Mr. Ferrer testified that Mr. Brunst created a separate “shell company” called Website

Technologies, for the purpose of opening bank accounts under a name that was not 

Backpage. (Trial Tr., Doc. 1814 at 89:8–10; see also Trial Tr., Doc. 1812 at 28:19–26 

(“We needed a name other than Backpage . . . . Brunst asked me for names and I suggested 

Website Technologies and that’s the name we ended up using.”); Trial Tr., Doc. 1812 at 

71:17–72:4 (“[Brunst] set up Website Technologies to handle payroll, 401(k) and to do 

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leases so he wants to ensure that its reputation is protected, not affiliated with Backpage.”); 

Trial Tr., Doc. 1814 at 89:8–10 (“Posting Solutions was another shell company similar to, 

like, Website Technologies, very generic sounding company that we could open bank 

accounts with.”). The money that flowed through Website Technologies, which Mr. Ferrer 

described as “the same company” as Backpage, derived “from postings in the Female 

Escorts section primarily.” (Trial Tr., Doc. 1814 at 90:16–22; 11:23–12:4; see also Trial 

Tr., Doc. 1923 at 138 (Mr. Thai confirming that Website Technologies held Backpage.com 

revenue)). 

When US Bank gave notice in April 2014 that it was dropping Backpage, Mr. Brunst

informed Messrs. Spear, Ferrer, and others that Backpage would be moving “all banking 

under Website Technologies at BMO.” (Trial Tr., Doc. 1812 at 72:5–73:4; Trial Exs. 178, 

178a). That same month, Mr. Ferrer emailed Messrs. Brunst and Spear to tell them that 

Chase had “figured . . . out” that Backpage had temporarily succeeded in allowing 

customers to use Chase credit cards for adult ads by using “a different billing descriptor,” 

“so we just have to change again.” (Trial Ex. 1120; Trial Tr., Doc. 1812 at 90:17–24, 

91:25–92:4). 

G. Sale of Backpage to Mr. Ferrer in 2015

As early as 2011, the Backpage owners were looking to sell the website, efforts that 

were led by Mr. Brunst. (Trial Tr., Doc. 1810 at 16:4–16:6, 17:11–18:2). Mr. Brunst asked 

Mr. Ferrer to help create a PowerPoint presentation to give to Backpage’s potential buyers. 

(Trial Tr., Doc. 1810 at 15:17–16:6). That PowerPoint included a slide on revenue, which 

showed that nearly 80% of Backpage’s revenue derived from the Female Escorts section 

and over 94% of the revenue was generated from the Adult category. (Trial Exs. 120 at 

15, 17). Mr. Ferrer testified that “[i]n order to sell the site, we couldn’t sell it as a 

prostitution review site so we had to make it look and sound like a general classified site.” 

(Trial Tr., Doc. 1810 at 21:23–25). The PowerPoint presentation Brunst created and 

presented to buyers contained the statement that: “[m]aintaining a vibrant general purpose 

classifieds site strengthens Backpage’s defensible market position in the Adult category: 

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Creates mainstream environment for site participants and allows ‘plausible deniability’ for 

exposure.” (Trial Ex. 120 at 17). The Defendants discussed not sharing information of the 

“prostitution ad marketing activities” with potential buyers. (Trial Tr. Doc. 1786 at 76–

77). These early attempts to sell Backpage were ultimately unsuccessful. 

Mr. Ferrer testified that Backpage revenue from 2014 through 2015 was annually 

around $150 to $160 million. (Trial Tr., Doc. 1786 at 80:10–17). In April 2015, Messrs. 

Lacey, Larkin, Brunst, and Spear sold Backpage to Mr. Ferrer for approximately $600 

million. (Trial Tr., Doc. 1814 at 15:21; Trial Tr., Doc. 1923 at 130:19–21). The sale 

consisted of two loan agreements: a larger loan representing the sale of the U.S. portion of 

Backpage (Trial Ex. 5427) and a smaller loan representing the sale of the foreign portion 

of Backpage (Trial Ex. 5459). Cereus Properties, a company owned by Messrs. Lacey, 

Larkin, Brunst, and Spear, collected the interest and debt payments from the $600 million 

loan. (Trial Tr., Doc. 1814 at 90:24–91:3). Mr. Ferrer testified that the source of the money 

that went to Cereus Properties “was the prostitution ads posted on Backpage.” (Id. at 

91:16–17). 

Mr. Ferrer testified that the sale of Backpage was intended to distance the 

Defendants from Backpage’s business of selling illegal ads for prostitution. But Mr. Ferrer 

also testified that even after the sale, both Messrs. Brunst and Spear stayed involved in the 

business of Backpage. For example, after Visa, Mastercard, and American Express 

dropped Backpage in the middle of 2015, Mr. Brunst assisted Backpage in trying to obtain 

credit card processing. (Trial Tr., Doc. 1786 at 81:7–16). Mr. Ferrer testified that Mr. 

Brunst “was involved in the financial problems the company was having and wanted to 

understand the revenue that was coming in and what our options were for banking and 

when we might, you know, get the reserves coming from these other credit card 

processors[.]” (Id. at 81:2–-82:3). Either Mr. Ferrer or Backpage’s CFO had contact with 

Mr. Brunst “[a] minimum of a few times a week” from July 2015 going forward. (Trial 

Tr., Doc. 1786 at 82:4–8). Mr. Brunst also helped find alternative methods for receiving 

money from posters on Backpage, including receiving payment by cryptocurrency. (Trial 

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Ex. 897; Trial Tr., Doc. 1814 at 78:19–79:19; 93:24–94:20). Evidence showed that in 

January 2015, revenue from cryptocurrency amounted to $35,540.68, but by May 2016, it 

had reached a high of $3,564,376.24. (Trial Ex. 1545). 

H. Money Transfers and Transactions

Starting in 2015, the year that Backpage was sold to Mr. Ferrer, revenue from 

Backpage was split between Backpage, Website Technologies, and Ad Tech BV, a 

company registered in the Netherlands. (Trial Tr. Doc. 1923 at 129–30; Trial Ex. 1481). 

Following the sale, and until the Backpage website was shut down by the federal 

government in 2018, revenue from Backpage was only sent to and divided between 

Website Technologies and Ad Tech BV. (Trial Tr., Doc. 1923 at 131:23–132:1). 

Mr. Ferrer testified that following the 2015 sale, Backpage proceeds going to 

Website Technologies derived “from postings in the Female Escort section primarily.” 

(Trial Tr., Doc. 1814 at 90:20–22). The Government’s financial expert Quoc Thai (“Mr. 

Thai”) described how money “relating to funds from Backpage.com and through the 

various entities ultimately land[ed] in the accounts of the defendants.” (Trial Tr., Doc. 

1923 at 135:6-8). Mr. Thai did not provide testimony as to the purpose of the transfers. 

His testimony, along with Mr. Ferrer’s, formed much of the basis of the money laundering 

counts against the Defendants. 

1. 18 U.S.C. § 1956 Charges: Counts 53–62 and 64–68 

Mr. Thai testified that the transfers in Counts 53–62 for concealment money 

laundering against Messrs. Lacey, Brunst, and Spear were made from a Website 

Technologies bank account to a bank account held by Cereus Properties at Arizona Bank 

& Trust. (Trial Tr., Doc. 1923 at 136–138; Trial Ex. 1479). He said the transfers in these 

Counts occurred between the three-month period of May 18, 2016, and August 16, 2016, 

and totaled close to $17 million. (Id.) Cereus Properties “collected the interest and debt 

payments from the $600 million loan” from the sale of Backpage. (Trial Tr., Doc. 1814 at 

91:2–3). Mr. Ferrer testified that the source of the monies paid to Cereus Properties “was 

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the prostitution ads posted on Backpage and/or Cracker.[9]” (Trial Tr., Doc. 1814 at 90:3–

7; 90:20–22; 91:16–17). Mr. Thai testified that between December 31, 2015, to August 

31, 2016, Website Technologies transferred a total of $39,249,211.37 to Cereus Properties. 

(Trial Tr., Doc. 1923 at 148:22; Trial Ex. 1691). 

Mr. Thai testified that the transfers in Counts 64–68 against Messrs. Lacey and 

Brunst for international promotional money laundering were made from a Netherlands 

bank account of Ad Tech B.V. to a bank account held by Cereus Properties. (Trial Tr., 

Doc. 1928 at 150–51; Trial Ex. 1479). These transfers occurred between August 5, 2016, 

and November 15, 2016, and totaled approximately $11.3 million. (Id.) 

2. 18 U.S.C. § 1957 Charges: Counts 69–99

a. Camarillo Holdings Transfers 

Counts 69–77, and 85 charge Defendants with transactional money laundering 

related to transfers made from an entity called Camarillo Holdings, LLC (“Camarillo 

Holdings”). Mr. Thai testified that Camarillo Holdings was an entity owed by Defendants 

that would receive funds derived from Backpage to pay “the various owners and the various 

payroll responsibilities of, you know, the Backpage.com as a whole.” (Trial Tr., Doc. 1923 

at 153:13–18; Trial Tr., Doc. 1898 at 15:2–3). Mr. Brunst was the CFO of Camarillo 

Holdings. (Id. at 153:23). The evidence showed that between February 4 and 25, 2013, 

$6.5 million was transferred from a US Bank account held by Backpage.com to a BMO 

Harris Bank account held by Camarillo Holdings. (Trial Ex. 1479). Mr. Thai stated that 

between February 4, 2013, and June 9, 2014, transfers from this Backpage.com account to 

Camarillo Holdings amounted to approximately $99 million. (Trial Tr., Doc. 1898 at 12:6–

7). All of these funds were Backpage proceeds. (Id. at 12:8–9). 

The specific transfers at issue in Counts 69–77, and 85 are transfers Messrs. Lacey 

and Spear made out of their personal bank accounts after receiving deposits from Camarillo 

Holdings. 

9 Mr. Ferrer testified that Cracker was a classified Australian site “that like Backpage, was 

predominantly prostitution.” (Trial Tr., Doc. 1813 at 24–25). 

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Counts 69 and 70 are against Messrs. Lacey and Brunst (presumedly because there 

was evidence that Mr. Brunst was CFO of Camarillo Holdings and a signor on that entity’s 

bank account). Trial evidence showed that on May 17, 2013, and August 30, 2013, 

Camarillo Holdings transferred $10,194.87 to Mr. Lacey’s Bank of America account and 

$3,0171,687.50 to Mr. Lacey’s BMO Harris Bank account, respectively. (Trial Ex. 1479). 

Mr. Lacey subsequently transferred a check in the amount of $30,000.00 out of his Bank 

of America account and a cashier’s check in the amount of $62,491.47 from his BMO 

Harris account to Stewart Title. (Trial Ex. 1479). Mr. Lacey’s transfers to Stewart Title 

are the bases for Counts 69 and 70. 

Counts 71–77 and 85 are against Mr. Spear. Trial evidence showed that between 

April 12, 2013, and June 11, 2014, in over 13 transactions, Camarillo Holdings transferred 

$2,672,770.54 to Spear’s account at National Bank of Arizona. (Trial Ex. 1479). Mr. Thai 

testified that between April 12, 2013, to November 2, 2015, Camarillo Holdings transferred 

a total of $6,279,188.53 to Spear’s account at National Bank of America. (Trial Tr., Doc. 

1898 at 16–17; Trial Ex. 1689). The transfers forming the basis of Counts 71–77 were 

made between June 11, 2014, and December 1, 2015, out of Mr. Spear’s National Bank of 

Arizona account. Count 71 is a $300,000.00 transfer to the Scott G. Spear & Ellona Spear 

Family Trust; Count 72 is a $200,000.00 transfer to Scott G. Spear TD Ameritrade; Count 

73 is a $1,000,000.00 transfer to UBS Financial Services; Count 74 is a $250,000.00 

transfer to Lincoln National Life; Count 75 is a $50,000.00 transfer to Industrial Property 

Trust; Count 76 is a $300,000.00 transfer to Ally Bank; and Count 77 is a $200,000.00 

transfer to Wells Fargo Advisors. (Trial Ex. 1479). Count 85 relates to a July 22, 2016, 

$50,000.00 transfer from Mr. Spear’s National Bank of Arizona account to a Strategic 

Storage Trust II, Inc. (Id.) 

b. Cereus Properties Transfers

Counts 78–84 and 85–93 charge Messrs. Lacey, Brunst, and Spear with 

transactional money laundering related to transfers made from Cereus Properties. Mr. 

Brunst was Cereus Properties’ CFO and was a signatory on its bank accounts. (Trial Tr., 

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Doc. 1898 at 20:8–25; 21:1–4). Mr. Thai testified that Cereus Properties obtained all of its 

funds from Website Technologies, which in turn obtained all of its funds from Backpage 

proceeds. (Id. at 19:22–25). 

Counts 78–84 and 85–93 stem from transfers Cereus Properties made to bank 

accounts owned by Defendants and Mr. Larkin. Mr. Thai testified that between January 

11, 2016, and January 4, 2017, Cereus Properties transferred a total of $22,941,500.83 to 

Mr. Spear’s National Bank of America account. (Trial Ex. 1690; Trial Tr., Doc. 1898 at 

19:13–15). His review also showed that during the same period, Cereus Properties 

transferred a total of $30,353,596.20 to Mr. Lacey’s accounts at Arizona Bank and Trust. 

(Trial Ex. 1693; Trial Tr. Doc. 1898 at 23; Trial Ex. 1479). 

Counts 78 and 93 are against Messrs. Spear and Brunst. Mr. Thai testified that

Cereus Properties transferred $133,045.00 to Spear’s National Bank of America account 

on January 11, 2016 (Count 78), and another $141,444.00 on October 6, 2016 (Count 93). 

(Trial Exs. 1479, 1690; Trial Tr., Doc. 1898 at 20; 29:6–9). 

Counts 79, 80, 82, 87 are against Mr. Brunst. Evidence showed that in the first 

month of 2016, Website Technologies had transferred $3,126,033.07 to Cereus Properties. 

(Trial Exs. 1479; 1691; Trial Tr., Doc. 1898 at 21:8). On January 26, 2016, Cereus 

Properties transferred $101,974.00 to Mr. Brunst’s account at Wells Fargo Bank (Count 

79) and on April 1, 2016, it transferred another $220,944.00 ) (Count 82). (Trial Ex. 1479; 

Trial Tr., Doc. 1898 at 21:7–10). Counts 80 and 87 relate to a $1,507,944.00 transfer on 

February 3, 2016, and a $1,206,356.00 transfer on October 6, 2016, from Cereus Properties 

to the accounts of Mr. Larkin. (Trial Ex. 1479). 

Counts 81, 86, 88, 89, 90, 91, and 92 are against Messrs. Lacey and Brunst. They 

reflect transfers from Cereus Properties to various accounts of Mr. Lacey at Bank of 

America, Wells Fargo, and Arizona Bank and Trust between March 1, 2016, and October 

6, 2016. (Trial Ex. 1479; Trial Tr. Doc. 1898 at 22; 27–29).

Counts 83 and 84 are against Messrs. Lacey and Brunst. They reflect transfers from 

Mr. Lacey’s Arizona Bank and Trust account to Fidelity National Title Company. (Trial 

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Ex. 1479). The first transfer on June 27, 2016, for $397,500.00, was earnest money on a 

property Mr. Lacey purchased in San Francisco. (Trial Ex. 1479; Trial Tr., Doc. 1898 at 

25). The second transfer on July 20, 2016, for $12,859,152.57, was the balance on the 

property. (Id.) Mr. Thai testified that these funds, like others, traced back to transfers that 

Website Technologies made to Cereus Properties, and Cereus Properties subsequently 

transferred to Mr. Lacey. (Trial Tr., Doc. 1898 at 26:3–5). 

3. 18 U.S.C. §§ 1956 and 1957 Charges Against Mr. Lacey: 

Counts 94–100 

Counts 94–99 consist of five wire transfers made on January 29, 2016, each in the 

amount of $3.3 million, from Mr. Lacey’s five annuity trust accounts at Arizona Bank and 

Trust to an IOLTA10 account held by Mr. Lacey’s attorney’s firm at Johnson Bank. On 

January 3, 2017, Mr. Lacey, through his attorney, transferred $16.5 million from the 

IOLTA account at Arizona Johnson Bank to a Primus Trust Company in Hungary for the 

benefit of Mr. Lacey at a Hungarian bank, K& H Bank. (Trial Tr., Doc. 1898 at 30:10–

12). This transfer forms the basis of Count 100. 

II. DEFENDANTS’ RULE 29 MOTIONS

Rule 29 obligates the Court to “enter a judgment of acquittal of any offense for 

which the evidence is insufficient to sustain a conviction. Fed. R. Crim. P. 29(a), (c). 

However, “[t]he hurdle to overturn a jury’s conviction based on a sufficiency of the 

evidence challenge is high.” United States v. Rocha, 598 F.3d 1144, 1153 (9th Cir. 2010). 

“When evaluating a sufficiency challenge, ‘the relevant question is whether, after viewing 

the evidence in the light most favorable to the prosecution, any rational trier of fact could 

have found the essential elements of the crime beyond a reasonable doubt.’” United States 

v. Singh, 995 F.3d 1069, 1075 (9th Cir. 2021) (quoting Jackson v. Virginia, 443 U.S. 307, 

319 (1979)). In so considering, the court “must bear in mind that it is the exclusive function 

of the jury to determine the credibility of witnesses, resolve evidentiary conflicts, and draw 

10 An IOLTA is an “Interest on Lawyers’ Trust Account” which is a non-interest-bearing

account a lawyer holds on behalf of a client for services not yet performed. 

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reasonable inferences from proven facts.” United States v. Rojas, 554 F.2d 938, 943 (9th 

Cir. 1977) (internal quotation marks and citation omitted). Stated differently, “the 

government does not need to rebut all reasonable interpretations of the evidence that would 

establish the defendant’s innocence, or ‘rule out every hypothesis except that of guilt 

beyond a reasonable doubt.’” United States v. Nevils, 598 F.3d 1158, 1164 (9th Cir. 2010) 

(quoting Jackson, 443 U.S. at 326). “[A]ny conflicts in the evidence are to be resolved in 

favor of the jury’s verdict.” United States v. Alvarez-Valenzuela, 231 F.3d 1198, 1201–02 

(9th Cir. 2000).

Defendants’ Rule 29 Motions challenge the sufficiency of evidence on all the 

Counts on which they were charged and/or found guilty. They also make various legal 

challenges to their convictions. The Court will address each Count in turn. 

A. Conspiracy to Facilitate the Promotion of Prostitution (Count 1)

The Jury found Messrs. Spear and Brunst guilty of conspiracy to commit Travel Act 

violations under 18 U.S.C. § 371 but did not reach a verdict on this charge as to Mr. Lacey. 

“To prove a conspiracy under 18 U.S.C. § 371, the government must establish: (1) an 

agreement to engage in criminal activity, (2) one or more overt acts taken to implement the 

agreement, and (3) the requisite intent to commit the substantive crime.” United States v. 

Kaplan, 836 F.3d 1199, 1212 (9th Cir. 2016) (citation and internal quotation marks 

omitted). 

The Government’s theory for this count was that between 2004–2018, there was an 

agreement among the Defendants to facilitate the promotion of prostitution businesses by 

posting their sex for money ads on Backpage, as charged in the Travel Act Counts; that 

each Defendant became a member of the conspiracy knowing of at least one of its objects—

“to make money”—and intending to help accomplish it; and that one of the members of 

the conspiracy performed at least one overt act on or after March 28, 2013, for the purpose 

of carrying out the conspiracy. (Doc. 1998 at 24). 

Defendants argue that they are entitled to judgments of acquittal on Count 1. They 

contend the Government did not establish the existence of a conspiracy specifically related 

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to the ads charged in Counts 2–51. (Doc. 2007 at 6–8). Defendants also argue that they 

cannot be guilty of conspiracy to violate the Travel Act because the alleged purpose of the 

charged conspiracy—to make money—is entirely lawful and it is impossible to tell if the 

Jury convicted Messrs. Spear and Brunst on a legally permissible object of the conspiracy. 

(Id. at 9–10). 

1. Agreement to Publish One of the 50 Travel Act Ads

Defendants first argue that the Government failed to show there was a specific 

agreement to commit the substantive crimes tied to the 50 Travel Act ads charged in Counts 

2–51. (Doc. 1903 at 30; Doc. 2007 at 11). They state it is not sufficient for the Government

to vaguely proffer there may have been ads that were posted between 2013 and 2018 that 

could have been for prostitution. (Doc. 1903 at 31). 

Defendants’ proffered standard for a specific, detailed agreement tied to the 50 ads 

is too stringent. The Superseding Indictment alleged that the Defendants conspired to 

facilitate prostitution in violation of the Travel Act. (Doc. 230 at 49). Unlike the 

substantive Travel Act counts, the conspiracy allegations were not specifically tied to the 

50 ads. To establish the conspiracy, the Government had to show there was an agreement 

to facilitate the promotion of prostitution businesses by posting sex for money ads on 

Backpage. (Id.)

Viewing the evidence in the light most favorable to the Government, the Court finds

there is sufficient evidence supporting the existence of an agreement among the 

Defendants, as framed by the Government, to work together toward the goal of making 

money by helping prostitution posters make their ads look less obviously like prostitution

ads. The Government argued that this collective effort was a “deliberate and intentional 

effort to allow the continued promotion and facilitation of prostitution and to assist 

Backpage’s customers by helping them . . . use Backpage as a platform for doing that.” 

(Doc. 1903 at 79).

“An agreement to commit a crime can be explicit or tacit, and can be proved by 

direct or circumstantial evidence, including inferences from circumstantial evidence.” 

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Kaplan, 836 F.3d at 1212 (quotation marks and citation omitted); see also United States v. 

Gonzalez, 906 F.3d 784, 792 (9th Cir. 2018) (noting that a tacit agreement is sufficient for 

a conspiracy conviction). “[I]t is sufficient if the conspirators knew or had reason to know 

of the scope of the conspiracy and that their own benefits depended on the success of the 

venture.” United States v. Montgomery, 384 F.3d 1050, 1062 (9th Cir. 2004) (citing United 

States v. Romero, 282 F.3d 683, 687 (9th Cir. 2002)). “Typically, the inference of an 

overall agreement is drawn from proof of a single objective, or from proof that the key 

participants and the method of operation remained constant throughout the conspiracy.” 

United States v. Duran, 189 F.3d 1071, 1080 (9th Cir. 1999) (internal citations omitted). 

Here, the alleged objective of the conspiracy was to make money through the 

unlawful means of posting prostitution ads for prostitution businesses. At trial, the 

Government offered evidence that Messrs. Lacey, Spear, and Brunst knew the demand for 

Adult ads was especially high in proportion to Backpage’s total business; that Backpage 

derived the majority of its revenues from its Female Escort section—ads Mr. Ferrer 

characterized as prostitution ads; and that the sale of ads that led to prostitution offenses 

became the dominant portion of Backpage’s business. 

There was also evidence that each of these Defendants were on notice by law 

enforcement, State Attorneys General, non-profits, and the media that a portion of 

Backpage’s escort ads were in fact leading to prostitution offenses. Direct Sales Co. v. 

United States, 319 U.S. 703, 707 (1943) (where the manufacturer had sold quantities of 

morphine to the physician “so frequently and over so long a period it must have known 

he . . . was therefore distributing the drug illegally”).11 Mr. Ferrer further testified that this 

11 Noting that an overt act in furtherance of a conspiracy must occur within the applicable 

statute of limitations, Mr. Spear argues that “the substantial majority” of evidence was 

improperly considered because it occurred before March 28, 2013. (Doc. 2006 at 13). See 

also Grunewald v. United States, 353 U.S. 391, 396–97 (1957). The Jury was properly 

instructed to consider whether “one of the members of the conspiracy performed at least 

one overt act on or after March 28, 2013, for the purpose of carrying out the conspiracy.” 

(Doc. 1989 at 24). This does not mean, however, that the Jury improperly considered facts 

related to the existence of the conspiracy that occurred prior to March 28, 2013, which was 

alleged to have spanned from 2004 to 2018. (See Doc. 1643 at 4 (“[T]he Court has already 

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

conspiracy.”)).

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knowledge resulted in the “slow dance” strategy of pretending to work with law 

enforcement by responding to subpoenas while simultaneously modifying Backpages 

moderation practices to ensure it could continue to be used as a prostitution advertisement 

platform. (Trial Tr., Doc. 1792 at 93–94). Evidence was also offered that suggested 

Defendants’ structured Backpage in a way to ensure the majority of its revenues were 

derived from prostitution ads to their financial benefit. (Trial Tr., Doc. 1903 at 65–66). 

With regard to Mr. Brunst, Mr. Ferrer testified that he and Mr. Spear presented their 

content aggregation marketing strategy to Mr. Brunst and had to obtain Mr. Brunst’s 

approval for the budget needed to staff the plan. (Trial Tr., Doc. 1792 at 42:16–43:11; 

Trial Tr., Doc. 1791 at 20:6–13). Mr. Brunst argues that his participation in Backpage’s 

annual budget meetings is insufficient proof of his agreement to violate the Travel Act. 

But the Supreme Court has stated that a defendant’s stake in making the profits which he

knew could come only from its encouragement of illicit operations evinces “informed and 

interested cooperation, stimulation, instigation.” Direct Sales Co., 319 U.S. at 713. Again,

the Government offered evidence that the sale of Backpage ads that ultimately led to 

prostitution offenses became the dominant portion of Backpage’s business, and 

Mr. Brunst’s participation in structuring Backpage to maintain its longevity and maximize 

profits from these sales was sufficient.

With regard to Mr. Spear, the Government offered evidence showing Mr. Spear

knew that removing certain words and replacing them with certain coded words and 

phrases made escort ads less susceptible to appearing like blatant prostitution ads. The 

Government also adduced evidence showing that Messrs. Ferrer, Spear, and Brunst 

internally knew the purpose of TER and knew that Adult escort ads published on Backpage 

were linked to the reviews on TER for an illegal purpose—namely, prostitution. (Trial Tr., 

Doc. 1903 at 78). Mr. Ferrer testified to discussing TER with Mr. Spear, and they decided 

to remove the hyperlinks and “the words TER but leav[e] in the ID numbers so people 

could look up the reviews on their own.” (Id.) This directive was disseminated to 

moderation staff, evidence that showed that Mr. Spear joined in the conspiracy to make its 

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accomplishment possible. (Trial Ex. 647). 

When the evidence discloses such a system, working in prolonged 

cooperation with a physician’s unlawful purpose to supply him with his stock 

in trade for his illicit enterprise, there is no legal obstacle to finding that the 

supplier not only knows and acquiesces, but joins both mind and hand with 

him to make its accomplishment possible. The step from knowledge to intent 

and agreement may be taken. There is more than suspicion, more than 

knowledge, acquiescence, carelessness, indifference, lack of concern. There 

is informed and interested cooperation, stimulation, instigation. And there is 

also a ‘stake in the venture’ which, even if it may not be essential, is not 

irrelevant to the question of conspiracy.

Direct Sales, 319 at 713.

The evidence for Mr. Lacey is more attenuated but meets the low threshold on a 

Rule 29 motion. The Government introduced testimony and evidence that by 2009, Mr. 

Lacey’s newspaper enterprises were economically declining while Backpage’s adult 

section revenues were exploding. (Trial Tr., Doc. 1792 at 44). Mr. Ferrer testified that 

Mr. Lacey was a ‘hands on” editor whose New Times paper ran a detailed story about the 

TER’s “prostitution reviews.” (Trial Tr., Doc. 1792 at 51–57; Trial Ex. 573a). As early 

as 2010, Mr. Lacey was notified by a group of State Attorneys General that “blatant 

prostitution ads are rampant” on Backpage and they requested that Backpage take down 

the “adult services portion of Backpage.” (Trial Ex. 52). As owner and CEO of 

Backpage’s parent company, Village Voice, Mr. Lacey was routinely confronted by nongovernmental agencies (“NGOs”) including the Auburn Theological Seminary, POLARIS, 

and the National Center for Missing and Exploited Children, who alleged that Backpage 

was a platform for prostitution ads. An NGO witness who testified at trial recalled that 

when Mr. Lacey was confronted with these allegations, he essentially stated “consenting 

adults can do what consenting adults want to do” leaving an impression that he knew 

prostitution was occurring on Backpage “and that it was legitimate.” (Trial Tr., Doc. 1921 

at 65:20–25; 67:21–22). News outlets, including the New York Times, also ran stories on 

Backpage’s Adult section, and Mr. Lacey watched the Amber Lyon expose on CNN. (Trial 

Ex. 633). Taken together, there is sufficient evidence from which a reasonable juror could 

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find that Mr. Lacey was aware of and implicitly agreed to the conspiracy’s alleged 

objective to make money by providing a platform for prostitutes and prostitution businesses 

to post prostitution ads on Backpage. 

The Court finds there is sufficient evidence that Messrs. Lacey, Brunst, Spear and 

Ferrer joined the conspiracy of making Backpage’s Adult section profitable by developing 

and sustaining a platform where prostitutes and prostitution enterprises could advertise sex 

for money, including in states where prostitution is illegal. Those efforts helped the 

advertisers make ads look less obviously like offers for prostitution. They also developed 

a facade of aiding law enforcement in investigating prostitution through responding to 

subpoenas. Even so, there is sufficient evidence that the sale of ad space leading to 

prostitution offenses was the primary focus of Backpage’s business and each Defendant 

reaped substantial financial benefit from knowingly providing Backpage’s service. 

2. Object of the Conspiracy

Messrs. Spear and Brunst argue, as they did during trial, that their conspiracy 

convictions cannot stand because the Government improperly argued to the Jury that one 

of the objects of the conspiracy was to make money, which is an entirely lawful object. 

(Doc. 2007 at 9).12 They argue that “a federal conspiracy conviction [cannot] be upheld 

when non-federal offenses as well as federal offenses were submitted to the jury as objects 

of the conspiracy, and it [is] impossible to determine on which basis the jury convicted.” 

(Doc. 2007 at 9 citing United States v. Croft, 124 F.3d 1109, 1115 (9th Cir. 1997)). 

The Court rejects the Defendants’ improper object argument, again. As discussed 

with the parties while finalizing jury instructions on this point, in the Ninth Circuit, a 

conspiracy is a “combination of two or more persons to accomplish some unlawful 

purpose, or some lawful purpose by unlawful means.” United States v. Caplan, 633 F.3d 

534, 542 (9th Cir. 1980) (emphasis added). In its closing arguments, the Government 

clarified for the Jury that the crime here was not merely making money and stated that 

Defendants crime was how they made that money: “off the backs of people engaged in 

12 Defendants make the same argument in their Rule 33 Motions for New Trial, as discussed 

infra. 

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illegal prostitution business enterprises.” (Trial Tr., Doc. 1961 at 40:12–21). Moreover, 

the only object alleged here was to make money through an agreement to violate the Travel 

Act. Cf. United States v. Manarite, 44 F.3d 1407 (9th Cir. 1995) (overturning a conspiracy 

conviction where two of the underlying objects alleged were insufficient as a matter of law 

and the general verdict form used by the jury made it impossible for court to determine 

which object or objects formed the basis of their decision); United States v. Johnson, 44 F. 

App’x 752 (9th Cir. 2002) (same). There is no basis to Defendants’ argument that both 

federal and non-federal offenses were submitted to the Jury as objects of the conspiracy. 

B. Sufficiency of Travel Act Charges (Counts 2–51)

Mr. Spear was found guilty of committing the Travel Act violations charged in 

Counts 2–18; Mr. Brunst was acquitted on Counts 2–51; and the Jury could not reach a 

decision as to Mr. Lacey on Counts 2–51. Both Messrs. Spear and Lacey argue the Court 

must enter a judgment of acquittal on the Travel Act charges, Mr. Spear with regard to 2–

18 and Mr. Lacey with regard to 2–51. 

The Travel Act makes it a federal offense for a person to use a facility in interstate 

commerce with the intent to promote or facilitate the promotion of an unlawful activity—

here, facilitating the promotion of prostitution. 18 U.S.C. § 1952(a)(3). To convict, the 

Government had the burden of showing that Messrs. Spear and Lacey (1) used 

Backpage.com; (2) with intent to facilitate the promotion of prostitution businesses; and 

(3) did a subsequent overt act in furtherance of that unlawful activity, by, for example,

publishing the prostitution ad or editing the ad to make it look less like an ad for 

prostitution. United States v. Tavelman, 650 F.2d 1133, 1138 (9th Cir. 1981). 

Before assessing the sufficiency of evidence arguments made as to these counts, the 

Court will address the First Amendment legal arguments Messrs. Spear and Lacey make 

with regard to the Travel Act Counts. 

1. First Amendment Protections of the Backpage Ads

Defendants argue that the Government failed to establish that any of the 50 ads 

charged in the Superseding Indictment were not protected by the First Amendment. Mr. 

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Spear specifically asserts that the Government failed, as a matter of law, to show that

Backpage’s publication of the Ads in Counts 2–18 were unprotected by the First 

Amendment. (Doc. 2006 at 5). Mr. Lacey similarly asserts that the Government “failed to 

overcome the presumption that the ads were 50 instances of protected expression.” 

(Doc. 2004 at 13). Mr. Lacey states that “even if he had been involved with Backpage’s 

operation . . . its operations understood that the operation of a platform for third-party 

speech and the third-party speech itself was First Amendment protected.” (Id.) He orally 

posited that any Jury instruction on the First Amendment would have to draw a distinction 

from the ad creator and the third-party publisher. (Trial Tr., Doc. 1931 at 69).

Prior to trial, the Court considered Defendants’ similar First Amendment arguments. 

In so doing, the Court iterated that the First Amendment does not protect “offers to engage 

in illegal transactions.” (Doc. 793 at 14 citing United States v. Williams, 553 U.S. 285, 

297 (2008)). Applying the requisite pre-trial standards of review, the Court found, as to 

the ads in Counts 2–51, that “the factual allegations in the [Superseding Indictment] are 

sufficient to show the ads were for prostitution” and “[p]rostitution ads are ads for illegal 

transactions.” (Id. at 11; 14). Therefore, facts existed to support that the ads were not First 

Amendment protected. (Id.) The Court will not second-guess its prior and consistently 

held rulings, rulings that well informed the Defendants on this issue.

However, the Court did conclude that at trial the Government still bore the burden 

to prove to the fact finder that the ads were for an illegal purpose, and therefore unprotected. 

At the conclusion of trial, the Court observed that the parties had fully briefed their 

respective positions on the First Amendment Jury Instruction. The Court determined that 

the Government’s theory was that the Defendants all knew that the ads were sex for money 

ads, so it held “based on the totality of the case [as] presented in court to this jury” that it 

would give them a modified First Amendment instruction. (Doc. 1931 at 64–73). The Jury 

was provided the following instruction:

All speech is presumptively protected by the First Amendment to the United 

States Constitution. However, the First Amendment does not protect speech 

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that proposes an illegal transaction. Prostitution is illegal in 49 states and 

most of Nevada. It is the government’s burden to establish that each of the 

ads alleged in this case is an ad for prostitution and not for another purpose 

such as an ad for escort, dating or massage services. If you find that an ad 

proposes an illegal transaction, it is not protected by the First Amendment. 

(Doc. 1998 at 48). 

Though Defendants say they do not wish to “relitigate” the Court’s instruction, they 

essentially argue that the ads are protected by the First Amendment because they were for 

lawful escort services and that use of “coded words” did not revert them into facially 

unlawful prostitution ads. (Doc. 2030 at 4–5). On consideration of the evidence, 

particularly the victims’ testimony that (1) their ads were what the Government purported 

them to be; (2) all of the ads used at least some language the Government established was 

indicative of prostitution; (3) ads 3, 6–11, and 18 were posted by a person known to be a 

prostitute by Mr. Ferrer; and (4) the photos in the ads initially submitted in Counts 4, 5, 12, 

13, 15, 16, and 17 were removed or otherwise moderated by Backpage, the Court finds 

sufficient evidence for the Jury to find that these were offers of sex for money ads. Given 

the Jury’s verdict as to Mr. Spear, they apparently found that each of the 18 ads were in 

fact ads for prostitution and not for some other purpose such as a lawful escort ad.13 Thus, 

applying the instruction, they necessarily found that the ads in Counts 2–18 were 

unprotected speech. 

Reviewing the evidence in comparison to the holding in Pittsburgh Press v Pitt, 

Comm. on Human Relations, 413 U.S, 376, 377–80 (1973) does not change the Court’s 

analysis here because Mr. Ferrer and several victims and witnesses who created or helped 

to create each ad in the Superseding Indictment testified that they were posting sex for 

money ads on Backpage. (See e.g., Trial Tr., Doc. 1786 at 7) (testimony from Mr. Ferrer 

that the ads posted on Backpage from 2004 through 2009 were “prostitution ads”); Trial 

Tr., Doc. 1922 at 76 (testimony from victim in Count 23 ad that ads posted in Los Angeles 

area in 2015 were posted “to get customers or to get people to pay for sex”); Trial Tr., Doc. 

13 The Court will not speculate about whether the Jury concluded that the ads in counts 19 

– 50 were First Amendment protected.

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1920 at 124, 131 (testimony from victim that she posted on Backpage from 2012 through 

2015 for the purpose of selling “acts of prostitution”); see also infra Section III.B.2, 

(testimony from victims that their ads were posted to offer sex for money). There is 

sufficient evidence for a reasonable juror to find that each Superseding Indictment ad was 

illegal and therefore not protected by the First Amendment. Consequently, the Defendants’ 

Motion for Acquittal based on First Amendment grounds is denied.

2. Sufficiency of Evidence to Support the Travel Act Counts

(Counts 2–51)

The Jury was instructed that to find the Defendants guilty of a Travel Act offense, 

they would have to find each of the following elements beyond a reasonable doubt:

First, the defendant used any facility in interstate commerce with the specific 

intent to promote or facilitate the promotion of any business enterprise 

involving prostitution offenses in violation of the laws of the State in which 

they are committed (as specified below[

14]), and

Second, after doing so the defendant performed an act that did promote or 

facilitate the promotion, of any business enterprise involving prostitution 

offenses, specifically, by publishing on Backpage.com the ads listed in 

Counts 2–51 of the indictment.

(Doc. 1998 at 30). This instruction went on to explain:

To prove specific intent, the government must establish that 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 offenses that the defendant knew to be unlawful under state law.

In the context of this Travel Act case, the terms to “promote” or “facilitate 

the promotion of” means intentionally helping someone else commit a 

prostitution offense in violation of state law. 

The phrase “Business enterprise,” means a continuous course of criminal 

conduct, that is, engaging or planning to engage in two or more violations of 

law, rather than a sporadic, casual, individual, or isolated violation. . . . 

14 The Jury Instructions provided the relevant state law for each Travel Act Count alleged. 

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(Id. at 30).

The Government also advanced a theory of liability for the Travel Act counts under 

Pinkerton v. United States, 328 U.S. 640 (1946). Pinkerton liability is “a judicially-created 

rule that makes a conspirator criminally liable for the substantive offenses committed by a 

co-conspirator when they are reasonably foreseeable and committed in furtherance of the 

conspiracy.” United States v. Long, 301 F.3d 1095, 1103 (9th Cir. 2002). In that regard, 

the Jury Instructions explained: 

Each member of the conspiracy is responsible for the actions of the other 

conspirators performed during the course and in furtherance of the 

conspiracy. If one member of a conspiracy commits a crime in furtherance 

of a conspiracy, the other members have also, under the law, committed that 

crime. 

Therefore, you may find a defendant guilty of committing a Travel 

Act crime as charged in Counts 2–51 of the indictment if the United States 

has proved each of the following elements beyond a reasonable doubt:

First, a member of the conspiracy committed a Travel Act offense 

alleged in one of the Counts; 

Second, that person was a member of the conspiracy charged in Count 

1 of the indictment; 

Third, the person committed the Travel Act offense in furtherance of 

the conspiracy; 

Fourth, a defendant was a member of the same conspiracy at the time 

the Travel Act offense was committed; and 

Fifth, that 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. 

(Doc. 1998 at 27). 

Messrs. Spear and Lacey argue there is an insufficiency of evidence showing their 

personal association with the prostitution businesses that posted the ads. They argue that 

there was no testimony or exhibit that shows that they ever had any contact with the 

advertisers in these ads; ever saw or knew the content of any of the ads before they were 

published; moderated the ad; or knew an ad was associated with a super poster. (Doc. 2006 

at 3). They also point out that none of the ads in Counts 2–18 contain TER links or even a 

TER number. (Id.) Mr. Spear asserts that there is only evidence of TER association in the 

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charged ads after Mr. Ferrer purchased Backpage in 2015.15 Therefore, Mr. Spear asserts 

that his convictions are legally unsupported. 

As explained by the jury instructions, to show that Messrs. Spear and Lacey violated 

the Travel Act by selling and publishing prostitution ads on Backpage, the Government 

was required to establish that Messrs. Spear and Lacey “in some significant manner 

associated” themselves with the ad poster’s prostitution business enterprise. (Doc. 1998 at 

30); United States v. Gibson Specialty Co., 507 F.2d 446, 449 (9th Cir. 1974). Thus, unlike 

conspiracy to violate the Travel Act, to convict on a Travel Act charge, the Government 

had to show that Defendants—or one of their co-conspirators—in some significant manner 

associated themselves with the prostitution businesses that posted the ads in each Count. 

With regards to Mr. Spear, the Government points to his work in overseeing 

Backpage’s growth and development, and the strategies he helped implement to ensure the 

adult escort section of Backpage flourished. It argues that “[w]hen the pimps and 

prostitutes who posted the ads in Counts 2–18 used Backpage to advertise their illegal 

commercial services, they utilized a website tailored-made to promote, and facilitate the 

promotion of, prostitution enterprises like theirs.” (Doc. 2021 at 16). Viewing the 

testimony and evidence in a light most favorable to the Government, the Court agrees that 

Mr. Spear’s role in making Backpage a platform from which prostitution could be 

advertised is sufficient to establish his specific intent to facilitate the promotion of the 

prostitution businesses posting the ads in Counts 2–18. Evidence sufficiently shows that 

Mr. Spear, in the interest of making money, directly helped develop moderation and editing 

policies that facilitated the promotion of prostitution and allowed Backpage to continue to 

accept payment from pimps, traffickers, and prostitutes for posting the illegal ads. The 

Court also finds, as detailed below, that there was sufficient evidence adduced that Mr. 

Ferrer, a co-conspirator, also significantly associated himself with and helped promote the 

poster’s enterprises such that his acts in relation to the ads in Counts 2–18 were fairly 

15 The ads in Counts 2–18 are dated from September 10, 2013, to April, 2015, just before 

the sale of Backpage to Mr. Ferrer. The ads in Counts 19–51 post-date the sale of Backpage 

to Mr. Ferrer. No Defendant was found guilty of Counts 19–51. 

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attributed to Mr. Spear under a Pinkerton theory of liability.

With regard to Mr. Lacey, the Court finds there is an insufficiency of trial evidence

supporting a direct theory of liability for any of the Travel Act charges brought against 

him. Specifically, the Government did not put forth sufficient evidence of Mr. Lacey’s 

specific intent to facilitate the promotion of the posters or prostitution businesses 

comprising Counts 2 through 51, as that mens rea is defined by the Ninth Circuit. Though 

the Government put forth some evidence that Mr. Lacey had knowledge that Backpage’s 

Adult section evolved into an on-line prostitution advertising platform operating in states 

that outlaw prostitution and that he extraordinarily benefited financially therefrom, there 

was no evidence that he was involved with developing or overseeing Backpage’s 

moderation or aggregation practices for the ads in Counts 2–51.16 Among other evidence, 

the Government’s evidence of Mr. Lacey’s reaction to an arrest of a Backpage user (see

Trial Ex. 940 (“[a]re the perps different than the rest of Backpage?”), and his stated support 

for legalized prostitution, among other evidence, suggests he knew of Backpage’s intended 

purpose. (Trial Ex. 1911b). Indeed, the Government’s argument that Mr. Lacey’s wealth 

depended on the success of Backpage’s Adult section was clearly established. This 

evidence may suffice for the conspiracy count but a conviction on a Travel Act count

requires more. See Gibson, 507 F.2d at 449 (“Were we not to define intent in the travel act 

in this manner, the act would be plagued by the very overexpansiveness which Congress 

sought to rule out by inclusion of an express mens rea requirement.”). (See also Doc. 1998 

at 30). The Government offered no evidence or testimony that Mr. Lacey exerted control 

over the advertisers in Counts 2–51 or how they published their ads. Gibson, 507 F.2d at 

450 (dismissing Travel Act counts where prosecution conceded that defendant 

manufacturers of gambling paraphernalia had “no financial interest in or control over the 

Montana distributorships to which the [gambling paraphernalia] were sold”). To the 

16 Without much more, the Government’s brief largely tracks the Superseding Indictment’s 

allegations in which Mr. Lacey is referenced in the “Knowledge And Facilitation of 

Prostitution” paragraphs related to his broad knowledge that Backpage had a reputation as 

an on-line prostitution advertisement platform. (See Doc. 230 at ¶¶ 89; 97; 106, 107; 121; 

126). 

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contrary, the evidence showed that Mr. Lacey was rarely pulled into the business side of 

Village Voice or the day-to-day operations of Backpage, and unlike Messrs. Spear and 

Ferrer, he had no occasion to review or perfect ads or coach the advertisers how to 

successfully code sex act terms so they could appear on Backpage’s Adult section. 

Though the Court finds that there was insufficient evidence of Mr. Lacey’s intent, 

the Court will nonetheless deny his Motion as to Counts 2–18 because there was sufficient 

evidence under Pinkerton, as described below, for a rational juror to find him guilty 

through the acts of one of his co-conspirators, namely Mr. Ferrer and Mr. Spear. 

a. Commission of Travel Act Violation in Count 2

The Jury convicted Mr. Spear of violating the Travel Act in Count 2 of the 

Superseding Indictment but did not reach a verdict as to Mr. Lacey on this Count. Count 

2 alleges that the Defendants used Backpage.com to post a prostitution ad on September 

10, 2013, in Massachusetts. (Doc. 230 at 50). Prostitution is illegal in Massachusetts. 

(Doc. 1998 at 31). 

Brian Griffin, a Sergeant with the Northborough Police Department (“Sgt. Griffin”), 

testified that in September 2013 he was alerted to suspicious circumstances of two females 

loitering around a hotel room. (Trial Tr., Doc. 1923 at 62–70). Believing that they may 

be involved in prostitution, Sgt. Griffin went to Backpage.com17 and found an ad depicting 

one of the females. (Trial Tr., Doc. 1923 at 64–65; Trial Exs. 212, 212a). This ad is the 

subject of Count 2. Sgt. Griffin called the ad number and made an appointment to see 

“Destinee,” to pay her for oral sex. (Trial Tr., Doc. 1923 at 66). Upon entering the hotel 

room, Sgt. Griffin observed a male “John” in the bathroom and learned that he paid for the 

hotel room in exchange for sex. (Id. at 70). Based on this testimony, there is sufficient 

evidence from which a reasonable juror could find that the ad in Count 2 was a sex for 

money ad on Backpage posted in violation of Massachusetts law.

There is also sufficient evidence for a reasonable juror to find that the moderation 

17 Backpage.com was known in various Massachusetts law enforcement communities as 

“a new place . . . to go to investigate these crimes.” (Trial Tr., Doc. 1923 at 52–53). 

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efforts taken by Messrs. Ferrer and Spear evince sufficient association with the poster and 

amounted to the Travel Act offense alleged in Count 2. Viewing the ads used by Sgt. 

Griffin (Trial Exs. 212 and 212a), Mr. Ferrer identified them as Backpage.com ads that 

would have been viewable on a mobile phone. (Trial Tr., Doc. 1812 at 52:2–3 (“This is 

the time when we were moving to a mobile phone experience so the page is built for a 

mobile phone view.”); 68:17–69:3).18 The ad read: “Our dazzling smile & stunning 

personality will keep you coming back for more. We keep ourselves well manicured, 

hygienically correct & always classy! Doin incalls and outcalls. 2 girl for 1 or 2 girl 

special. Call or text us five0eight-nine33-eight52one.” (Trial Tr., Doc. 1812 at 57; Trial

Ex. 212). Observing that the telephone number was spelled out in the ad, Mr. Ferrer 

testified that in the moderation process, they learned that if a prior user was banned, the 

user would revert to spelling out a telephone number to avoid the ad being rejected. (Id. at 

58:9–12). The Court finds that this testimony sufficiently establishes that Messrs. Ferrer 

and Spear, through their moderation development and oversight, committed the Travel Act 

offense alleged in Count 2 by helping to facilitate and promote the advertiser’s business. 

b. Commission of Travel Act Violations in Counts 3, 6–11, 18

The Jury convicted Mr. Spear of violating the Travel Act in Counts 3, 6–11 and 18 

of the Superseding Indictment but did not reach a verdict as to Mr. Lacey. The ads in these 

Counts were posted by a woman named Pamela Robinson (“Ms. Robinson”). Each Count

alleges that the Defendants helped Ms. Robinson post prostitution ads on Backpage in 

Washington on January 27, 2014 (Count 3), February 6, 2014 (Count 6), April 20, 2013 

(Count 7), May 7, 2014 (Count 8), May 31, 2014 (Count 9), July 1, 2014 (Count 10), 

August 19, 2014 (Count 11), and February 26, 2015 (Count 18). (Doc. 230 at 50–51). 

18 Mr. Ferrer testified that he “worked with [a man] in Dallas to design this look . . . I 

approved the wire frames and then we launched this mobile view of postings.” (Id. at 51-

52:15–17). He further testified about changes that were made to enable better viewing of 

the ads’ texts and images for mobile phones versus desktop ads which include a large 

Backpage.com logo. (Id. at 52–53). Mr. Ferrer identified the ads’ features that he 

approved, that he is familiar with how it all looks because at that time they were trying to 

increase their “page views and mobile and it went to nearly 90 percent.” (Id. at 53:20–

54:5). 

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Prostitution is illegal in Washington. (Doc. 1998 at 31). 

Mr. Ferrer testified that he communicated with Ms. Robinson from 2010 through 

2018 using his email address carl@Backpage.com. (Trial Tr., Doc. 1795 at 79). Ferrer 

identified each ad set forth in Trial Exhibits 504–513 that are listed in Counts 3, 6–11, 18, 

and 25–26 as Ms. Robinson’s Backpage ads. (Id. at 79–87; Trial Exs. 162 –165; 168, 504–

511). He testified that he believed Ms. Robinson was engaged in prostitution and solicited 

her services by posting ads on Backpage. (Trial Tr., Doc. 1795 at 79–81). He explained 

how he provided Ms. Robinson with a “promo code” for discounts on escort ads, and that 

he restored her editing rights so she could post ads on Backpage for prostitution. (Id. at 

81, 87). He also testified to his personal knowledge of her ads posted on Backpage from 

2014 to 2015, and that she threatened to complain to the Better Business Bureau because 

her ads were being rejected. (Id. at 105–08). Ferrer described the ads’ rejection as part of 

Backpage’s moderation process. (Id. at 87–88). 

Mr. Ferrer’s testimony undermines the Defendants’ contention that there is no 

evidence that he was personally interacting with Ms. Robinson. (See Doc. 1867 at 103–

04). Mr. Ferrer testified that he communicated directly with Ms. Robinson through his 

email address at Backpage. The Jury must have found this testimony credible. The 

Defendants’ argument that this and other Backpage ads are not Travel Act violations 

because they may or may not have resulted in sex acts for money is also unconvincing 

because each state statute makes “offers” to engage in sex illegal. Therefore, the Court 

finds that there is sufficient evidence from which a reasonable juror could find that Mr. 

Ferrer and co-conspirator Mr. Spear, violated the Travel Act as alleged in Counts 3, 6–11, 

and 18. 

c. Commission of Travel Act Violations in Counts 4 and 5 

The Jury convicted Mr. Spear of committing Travel Act offenses in Counts 4 and 5 

but did not reach a verdict as to Mr. Lacey on these Counts. Count 4 is a Backpage ad 

posted on January 29, 2014, and Count 5 is a Backpage ad posted on January 31, 2014. 

(Doc. 230 at 50). Both ads were posted on Backpage.com in Massachusetts, where 

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prostitution is illegal. 

Naiomy Figueroa (“Ms. Figueroa”) identified the ads from Counts 4 and 5 (Trial 

Exs. 214 and 214a, respectively) as ads her pimp posted of her on Backpage. (Trial Tr., 

Doc. 1898 at 96–98). Ms. Figueroa testified that she became familiar with Backpage when 

she saw her pimp use it to post her ads. (Id. at 82). She believed Backpage was a website 

“for girls to use [] to escort and to get trafficked.” (Id.) According to her, “escort” meant 

“to exchange a sexual act for money or a gift.” (Id.) She testified that she would not create 

her ads, that her pimp created and posted them. (Id.) She understood that she was 

advertised for sex acts for money “so my pimps could make money off of me.” (Id. at 83). 

She testified that she saw her pimps purchase “vanilla cards” from convenience stores and 

use them to purchase her ads. (Id.) Ms. Figueroa testified that her ads included terms like 

“fetish friendly” and “satisfying your cravings” and included photos of her in lingerie, 

pantyhose and in seductive poses. (Id. at 84). Photos for the ads would be taken in hotel 

rooms paid for by pimps because she was not old enough to pay. (Id. at 85). Once posted, 

she said her phone would ring within minutes. (Id. at 86). When the calls tapered off, 

“they would post another ad to get me to the top of the list so that the calls keep coming 

in.” (Id.) The caller would ask “what are the prices per hour.” (Id. at 87). In discussing 

rates, she would use words like “roses” as a code word for money. (Id. at 92). She was 

also familiar with the term “in-call” as “when the john comes to you.” (Id. at 96). She 

testified that upon meeting, she would “ask them to touch us somewhere like in the private 

parts to confirm that they were not a cop.” (Id. at 92). Ms. Figueroa testified that every ad 

posted of her was an offer of sex for money. (Id. at 99). She testified that she would not 

keep the money but that the pimps would. (Id. at 94–95). This evidence is sufficient to 

show that the ads in Counts 4 and 5 were ads for prostitution. 

Mr. Ferrer identified Trial Exhibit 214 from Count 4 “as the administrative view of 

a posting in the Boston Escort Section of Backpage.” (Trial Tr. Doc. 1812 at 60:3–8). He 

explained that the “administrative view” would show “the email address, the payment 

information, and other information gathered in even what we called Object Editor. It’s all 

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kind of an internal printout of an ad in admin view.” (Id.) He explained that the page 

showed transactions and customer data as well as various customer invoices. (Id. at 61:3–

25).19 From this data, he testified that one page of exhibit 214 was “an image that was 

deleted. And in this administrative view, an administrator could restore or remove that 

image and then hit ‘updates.’” (Id. at 61:24 to 62:1). From the administrative view, he 

could tell the transaction was ultimately approved. (Id.) Mr. Ferrer similarly testified that

the data in Trial Exhibit 214a from Count 5 showed that an image had been deleted. (Id.

at 63:1–10).20 

The Court finds that this testimony sufficiently establishes that Messrs. Ferrer and 

Spear, through their moderation development and oversight of Ms. Figueroa’s ads, 

committed the Travel Act offenses alleged in Counts 4 and 5. 

d. Commission of Travel Act in Counts 12, 13, 14 and 15 

Count 12 is a California Backpage ad posted on November 23, 2014, and Count 13 

is a California Backpage ad posted on January 29, 2015. (Doc. 230 at 51). Prostitution is 

illegal in California. (Doc. 1998 at 32). Count 14 is an Arizona Backpage ad posted on 

January 31, 2015, and Count 15 is an Arizona Backpage ad posted on January 31, 2015. 

(Doc. 230 at 51). Prostitution is illegal in Arizona. (Doc. 1998 at 32). 

Astrid Cervantes (“Ms. Cervantes”) testified that she was advertised for an 

“exchange of money for sex acts” on Backpage.com from November 2014 through January 

2015 in Oceanside, San Diego, and other places in California and in Phoenix. (Trial Tr., 

19

 In distinguishing Trial Exhibits 212 and 212a (the ads in Count 2) from exhibit 214 

(Count 4), Mr. Ferrer explained that Trial Exhibit “212a was a view from a mobile phone. 

[Trial Exhibit 214] would be viewed -- from a desktop computer that was looking at the ad 

with somebody having admin access at Backpage and then making a PDF of that data.” 

(Id. at 60:12–15). 

20 Mr. Ferrer also stated that he was familiar with the postings in Trial Exhibits 214 and 

214a because “the person posted in this ad was in a Nicholas Kristof column in the ‘New 

York Times.’” (Trial Tr. Doc. 1812 at 65:1–2). Mr. Ferrer testified that the New York 

Times article “discussed how a juvenile was prostituted and then how they were able to 

recover this juvenile by finding the person on Backpage.” (Id. at 65:18–20). Ferrer said 

that after he received an email from a producer at Dateline he went to find the records of 

the victim in the story “so we [could] do our standard operating procedure of when was the 

ad posted, by who, what payment data was gathered.” (Id. at 67:3–7). He said that data 

would also tell him whether they had sent NCMEC a report. (Id.) 

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Doc. 1897 at 30–38). Ms. Cervantes identified herself and a woman called “Storm” in the 

ads associated with Counts 12–15. (Id. at 32–35, 47–48).21 She said Storm was part of a 

group she was in that was “being trafficked” by a man she referred to as “L.G.” (Id.) She 

testified that L.G. was her pimp and that L.G. and a woman named Star, another girl that 

was being trafficked by L.G., would create and post her ads on Backpage. (Id. at 32–33). 

Ms. Cervantes testified that L.G. and Star took pictures of her in lingerie and then used 

those photos in her Backpage ads. (Id. at 33–34). Ms. Cervantes said L.G. would post her 

ad using his cell phone. (Id. at 34). Upon the ad being posted, “clients”—meaning “the 

men that would want to exchange money for sex”—would call and text for sex. (Id. at 35). 

After engaging in sexual intercourse with the client, Ms. Cervantes would text L.G. and he 

would arrive and retrieve the money. (Id. at 37–39). Ms. Cervantes testified that she did 

not observe L.G. to have a job other than being a pimp. (Id. at 45). Ms. Cervantes testified 

that L.G. thought they could make a lot of money during the Super Bowl so she, L.G., 

Storm, and Star traveled from California to Arizona in January. (Id. at 37-38). She testified 

that L.G. or Star provided the car, and once in Arizona, L.G. purchased a hotel room and 

Storm began writing her Backpage ad profile. (Id. at 41). Ms. Cervantes had a few “dates” 

while in Phoenix. Eventually, she and Storm agreed to meet a customer who requested “a 

two-girl special.” (Id. at 43). The customer ended up being an undercover police officer. 

After that, Ms. Cervantes stopped working for L.G. (Id. at 54).

Viewing Trial Exhibits 217 and 217a, Mr. Ferrer identified each as Backpage ads, 

the market they were posted in, and as examples of “somebody who is posting in two 

different markets.” (Doc. 1813 at 25:14–15). Mr. Ferrer said he could tell Trial Exhibit 

217 was printed out by an administrator, and that it contained a deleted image. (Doc. 1813 

21 Ms. Cervantes identified herself in Trial Exhibits 215 and 215a, which are respectively 

the January 31, 2015, Backpage ad posted in Phoenix, Arizona associated with Count 14 

(Trial Tr., Doc. 1897 at 47–48); and the November 23, 2014, ad posted on Backpage.com

in San Diego, California that is associated with Count 12. (Id. at 47). She testified that her 

acquaintance “Storm” is the person in the ad at Trial Exhibit 217a, the January 29, 2015, 

Backpage ad posted in Inland Empire, California that is associated with Count 13 (id. at 

46), and in Trial Exhibit 217, the January 31, 2015, Backpage ad posted in Phoenix, 

Arizona that is associated with Count 15. (Id. at 46–47). 

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at 22:24–23:2). Mr. Ferrer explained that the options of “Keep deleted,” “Restore,” and 

“Removed” displayed on the exhibit meant the administrator/moderator had the “option 

to...update the ad and restore it, or [] update it and permanently remove it. Right now the 

ad is deleted, but it could be restored.” (Id. at 23:20–25). Mr. Ferrer said he thought the 

image of Storm was violative of Backpage policies because it was “too much of a butt shot

. . .” (Id. at 24:3).

The titles of the ads in Trial Exhibits 215 and 215a read “New In Town,” a term that 

NGOs like NCMEC and Polaris told Defendants were indicative of prostitution and 

trafficking. (Id. at 21–24). Mr. Ferrer described exhibit 215 as a Backpage ad that you 

could view on a mobile device that had “been created into a pdf with admin access.” (Id.

at 17). He said the exhibit included “object editor data” and that he could tell from the 

exhibit that an image from the ad had been deleted again, “because “it’s just too much of a 

butt shot on a hotel bed mattress.” (Id. at 19). 

There is sufficient evidence and testimony from which a reasonable juror could find 

that the ads depicted in Counts 12 through 15 are Backpage.com ads advertising sex acts 

for money in violation of California and Arizona state laws, and that Messrs. Ferrer and 

Spear facilitated the promotion of prostitution ads through their moderation efforts. 

e. Commission of Travel Act Violations in Count 16 and 17

Counts 16 and 17 allege that prostitution ads were posted on Backpage in Colorado 

on February 4 and 18, 2015, respectively. (Doc. 230 at 51). Prostitution is illegal in 

Colorado. (Doc. 1998 at 33–34).

Breahannah Leary (“Ms. Leary”) testified that she posted herself on Backpage.com 

in Denver, Colorado from approximately 2012 through 2015. (Trial Tr., Doc. 1920 at 122–

24). She copied and pasted other ads and used the “lingo” on Backpage.com to create her 

own ads. (Id.) She testified that her ad would often appear differently than as she originally 

posted; that sometimes her picture was removed, or the ad would be pushed to the bottom 

and require her to repost it so it would go to the top. (Id. at 124). She stated that even 

when her picture was removed, the rest of the ad’s content would remain. (Id. at 125). 

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Once posted, she said her telephone would ring and she would “go and have dates with the 

gentlemen” which she said meant “acts of prostitution.” (Id.).

In January 2015, Ms. Leary began to work for Brock Franklin (“Mr. Franklin”), who 

wanted to post her on Backpage.com. (Id. at 128–29). When she arrived at his home, she 

observed other women living there. (Id.). Mr. Franklin and “one of his girls” Isis, took 

photos of her in a hotel room in Denver where she posed in various positions wearing 

lingerie. (Id. at 131). She testified that for the four to five months she was involved with 

Franklin, she engaged in daily acts of prostitution for him and that he only permitted her to 

perform acts of oral sex. (Id. at 132–34). Once she received money for the act, it would 

be immediately handed over to Franklin. (Id.). Ms. Leary identified herself in Trial 

Exhibit 216 as the photos that were taken of her the first night she moved in with Franklin. 

(Id. at 138). She stated that the ad was posted on February 4, 2015, in Denver. (Id.). She 

also identified herself in Trial Exhibit 216a as an ad posted in Ft. Collins, Colorado on 

February 18, 2015. She testified that both advertisements lead to acts of prostitution. (Id.). 

Based on direct and circumstantial evidence about how Ms. Leary’s ads were 

moderated e.g., photos being deleted, terms removed, her ad moved to the bottom—there 

is sufficient evidence for a rational juror to find Messrs. Spear’s and Ferrer’s 

implementation of their moderation policies resulted in the Travel Act violations alleged 

in Counts 16 and 17. 

In sum, there is sufficient evidence that Messrs. Ferrer and Spear committed the 

Travel Act charges in Counts 2–18 via their moderation efforts. 

f. Pinkerton Liability and the Travel Act Counts 2–18

Citing United States v. Castaneda, Defendants argue “that due process constrains 

the application of Pinkerton where the relationship between the defendant and the 

substantive offense is slight.” 9 F.3d 761 (9th Cir. 1993), overruled by United States v. 

Nordby, 225 F.3d 1053 (9th Cir. 2000). Messrs. Lacey and Spear maintain that, although 

they were aware of the moderation function at Backpage, they were not directly involved 

in the moderation practices, and the connection between that fact and Mr. Ferrer’s acts in 

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facilitating the publication of these ads is too slight for Pinkerton to apply. In other words, 

Defendants assert that the Travel Act offenses in the Superseding Indictment are just a few 

examples out of millions of ads published by Backpage, and it is not reasonably foreseeable 

to Defendants that the publication of a specific ad might be moderated in some improper 

way to facilitate prostitution. (Doc. 1903 at 34).

But the question is not whether it is reasonably foreseeable that Messrs. Lacey or 

Spear knew a specific Travel Act ad would occur among millions of other ads. The 

question is whether publication of the Travel Act ads “could reasonably have been foreseen 

to be a necessary or natural consequence of the unlawful agreement.” Pinkerton, 328 U.S. 

at 647–48 (emphasis added); Alvarez-Valenzuela, 231 F.3d at 1202. As mentioned, the 

unlawful agreement among the Defendants and Mr. Ferrer as identified by the Government 

is making Backpage ads look less obviously like prostitution to continue profiting off of 

ads for illegal sex acts. So, the question is whether it was reasonably foreseeable that 

Messrs. Ferrer, Spear, or other members of the conspiracy, would help an advertiser of 

prostitution post an ad for prostitution in Backpage by moderating an ad. The evidence 

supports that conclusion for Counts 2–18. As discussed, sufficient evidence was adduced 

showing each Defendant knew that prostitution was occurring through Backpage ads, and 

that the vast majority of Backpage’s revenue came from prostitution ads. It is reasonable 

that a member of the conspiracy would have foreseen (indeed, expected), another member 

to take steps to further their unlawful agreement—for example, to moderate submitted 

prostitution ads or “slow dance” responses to law enforcement subpoenas to make it look 

like Backpage was not publishing prostitution ads so Defendants could continue to profit 

from that illegal revenue. 

g. Travel Act Violations in Counts 19–51

The Government put forth sufficient evidence that the Backpage ads in Counts 19–

51 were prostitution ads violating the associated state laws. However, Messrs Spear, 

Brunst, Padilla, and Ms. Vaught were acquitted of these Counts. In so finding, the Jury 

necessarily concluded that no Defendant committed a Travel Act violation related to each 

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Count, nor did Pinkerton liability attach to any Defendant through a co-conspirator’s act. 

Notably, each ad in Counts 19–51 post-dates the sale of Backpage from its owners to Mr. 

Ferrer. Considering the evidence and testimony, the Court finds that there is an 

insufficiency of evidence showing any acts by Mr. Ferrer, or any other co-conspirator, 

taken after the sale of Backpage was a reasonably foreseeably consequence of the unlawful 

agreement. The evidence accords with the Jury’s likely conclusion that the sale of 

Backpage to Mr. Ferrer was a break in the conspiracy’s agreement to violate the Travel 

Act. At best, the Government’s evidence showed that Mr. Ferrer used Backpage’s profits 

after the sale of Backpage to satisfy the loans he assumed for Backpage’s purchase. For 

that reason, the Court finds that there is insufficient evidence to convict Mr. Lacey of 

Counts 19–51, even under a Pinkerton theory of liability. The Court will therefore grant 

Mr. Lacey’s motion for acquittal of the Travel Act violations alleged in Counts 19–51. 

C. Money Laundering Counts

Defendants were charged with conspiracy to commit money laundering (Count 52), 

money laundering under 18 U.S.C. § 1956, relating to the laundering of monetary 

instruments (Counts 53–68, 100), and money laundering under 18 U.S.C. § 1957, relating 

to engaging in monetary transactions in property derived from specified unlawful activity

(Counts 69–99). They challenge the sufficiency of the evidence supporting the charges 

on which the Jury found them guilty. The Court will first assess the Defendants’ arguments 

regarding the substantive money laundering counts and then will address the conspiracy to 

commit money laundering count. 

1. Money Laundering Counts Under 18 U.S.C. § 1956

“18 U.S.C. § 1956 prohibits specified transfers of money derived from unlawful 

activities. Subsection (a)(1) makes it unlawful to engage in certain financial transactions, 

while subsection (a)(2) criminalizes certain kinds of transportation.” Regalado Cuellar v. 

United States, 553 U.S. 550, 557 (2008) (“Cuellar”). Defendants here were charged under 

both Subsections.22 Counts 53–62 charge violations of Subsection 1956(a)(1)(B)(i), aimed 

22 Unless where otherwise noted, all Section and Subsection references are to Chapter 18 

of the United States Code.

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at financial transactions that are intended to conceal the source of illegal proceeds. Counts 

63–68 charged violations of Subsection 1956(a)(1)(A)(i), which prohibits transporting 

funds internationally for the purpose of promoting specified unlawful activities. Count 100

against Mr. Lacey charged a violation of Subsection 1956(a)(2)(B)(i), which prohibits 

transporting funds internationally that are intended to conceal the source of illegal 

proceeds. 

a. Counts 53–62: Transactional Concealment Money 

Laundering under Subsection 1956(a)(1)(B)(i) (Messrs.

Lacey, Brunst & Spear)

Defendants were charged in Counts 53–62 with money laundering under Subsection 

1956(a)(1)(B)(1). The Superseding Indictment states that Website Technologies 

transferred the funds in these transactions to Cereus Properties; that Defendants knew the 

funds represented proceeds of some form of unlawful activity; and that Defendants made 

the transfers in whole or in part to conceal the source of the proceeds of the unlawful 

activity. (Doc. 230 ¶¶ 204–205). 

At trial, it was established that after 2016, Backpage proceeds were collected and 

divided between Website Technologies and Ad Tech B.V., a company registered in the 

Netherlands. (Trial Ex. 1479). Mr. Thai testified that the transfers from Website 

Technologies in Counts 53–62 all occurred between the three-month period of May 18, 

2016, and August 16, 2016, and totaled close to $17 million. (Trial Tr., Doc. 1923 at 136–

138; Trial Ex. 1479). Each transfer was made from a Website Technologies bank account 

at Branch Banking & Trust to a bank account held by Cereus Properties at Arizona Bank 

& Trust. (Trial Tr., Doc. 1923 at 136–138; Trial Ex. 1479). Mr. Thai and Mr. Ferrer both 

testified that Cereus Properties “collected the interest and debt payments from the $600 

million loan” from the sale of Backpage, and that Defendants were owners of Cereus 

Properties. (Trial Tr., Doc. 1814 at 91:2–3). 

Subsection 1956(a)(1)(B)(i) states in pertinent part: 

(a)(1) Whoever, knowing that the property involved in a financial transaction 

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represents the proceeds of some form of unlawful activity, conducts or attempts to 

conduct such a financial transaction which in fact involves the proceeds of specified 

unlawful activity—

(B) knowing that the transaction is designed in whole or in part—

. . .

(i) to conceal or disguise the nature, the location, the source, the ownership, or the 

control of the proceeds of specified unlawful activity

shall be sentenced to a fine. . . or imprisonment for not more than twenty years, or 

both.

18 U.S.C. § 1956(a)(1)(B)(i). See also United States v. Wilkes, 662 F.3d 524, 545 (9th Cir. 

2011) (holding that “[t]o convict a person for money laundering under 18 U.S.C. 

§ 1956(a)(1)(B)(i), the government must prove that (1) the defendant conducted or 

attempted to conduct a financial transaction; (2) the transaction involved the proceeds of 

unlawful activity; (3) the defendant knew that the proceeds were from unlawful activity; 

and (4) the defendant knew ‘that the transaction [was] designed in whole or in part—(i) to 

conceal or disguise the nature, the location, the source, the ownership, or the control of the 

proceeds of specified unlawful activity.’”) (internal citations omitted)). 

Defendants argue the Government’s evidence was insufficient in showing (1) the 

funds in these transfers were proceeds of Travel Act violations; and (2) they had an intent 

to conceal the nature or source of the funds. 

i. Specified Unlawful Activity

Defendants first argue that a judgment of acquittal is warranted on Counts 53–62 

because the Government did not provide sufficient evidence showing the funds at issue 

were the proceeds of any prostitution ad sales during the timeframe of these Counts. 

(Doc. 2007 at 14). The Government says this argument is a red herring. It argues Ninth 

Circuit law is clear that a defendant may be convicted of money laundering even if the 

defendant is not charged or convicted of the underlying specified unlawful activity. 

(Doc. 2019 at 12). 

The Court agrees with the Government. A defendant need not actually be convicted 

of the specified unlawful activity—what here would be Travel Act offenses—before a 

money laundering conviction can be had under Section 1956(a)(1)(B)(i). See e.g., United 

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States v. Golb, 69 F.3d 1417, 1422 (9th Cir. 1995). In fact, even if evidence of the 

underlying activity is insufficient to convict a defendant, where there is evidence from 

which a jury could infer the source of the funds was from the underlying unlawful activity, 

a Section 1956(a)(1)(B)(i) conviction can stand. Id. This was precisely the case in United 

States v. Golb, where the Ninth Circuit Court of Appeals affirmed the convictions for 

money laundering where there was evidence from which a jury could have inferred that the 

source of laundered proceeds was illegitimate—even though the jury found that the same 

evidence was insufficient to convict the defendant for the actual “specified unlawful 

activity.” Id. See also United States v. Blackman, 904 F.2d 1250, 1257 (8th Cir. 1990) 

(affirming conviction where the jury could infer that the funds came from the “specified 

unlawful activity”); United States v. Mankarious, 151 F.3d 694, 702 (7th Cir. 1998) 

(affirming conviction and noting “money laundering statute does not require the 

government to trace the laundered proceeds to a specific predicate offense”); United States 

v. Yagman, 2007 WL 9724388, at *20 (C.D. Cal. May 3, 2007) (noting out-of-circuit case 

law standing for the same). 

Defendants have also objected to the time difference between the Travel Act Counts 

on which Mr. Spear was convicted and the first transaction in Court 53. The Travel Act 

ads in Counts 2–18 are dated September 10, 2013, to February 26, 2015. The transactions 

in Counts 53–62 are dated May 18, 2016, to August 31, 2016. The Court finds the time

difference here immaterial. The Jury need not necessarily have found that it was the Travel 

Act violations alleged in Counts 2–18 that specifically created the unlawful proceeds. The 

federal money laundering statute criminalizes transactions in proceeds, not the transactions 

that create the proceeds. Wilkes, 662 F.3d at 545; see also United States v. Garcia, 37 F.3d 

1359, 1365 (9th Cir. 1994) (finding that under Section 1956, “due to the fungibility of 

money, it is sufficient [to] prove that the funds in question came from an account in which 

tainted proceeds were commingled with other funds”). 

The requirements under Section 1956 are that Defendants knew the proceeds 

derived from unlawful activity and that the proceeds “in fact” derived from unlawful 

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activity. 18 U.S.C. § 1956(a)(1). This accords with what the Jury was instructed. (See 

Doc. 1998 at 41 (stating that the Government had to prove beyond a reasonable doubt for 

each of these counts that “the defendant conducted a financial transaction involving 

property that represented the proceeds of a violation or violations of the Travel Act”). 

Although the Government did not trace the funds in Counts 53–62 to particular 

Travel Act violations—i.e., sale proceeds from the sale of particular prostitution ads—there 

was sufficient evidence from which a jury could infer that the funds were proceeds from 

Backpage’s sales of sex-for-money ads and that Defendants or their conspirators knew they 

were proceeds from sex-for-money ads. As has been discussed, evidence relating to 

Defendants’ knowledge that Backpage sold prostitution ads was more than sufficiently 

adduced. Mr. Ferrer told the Jury that following the 2015 sale, the ultimate source of the 

monies paid to Cereus Properties from Website Technologies “was the prostitution ads 

posted on Backpage and/or Cracker.” (Trial Tr., Doc. 1814 at 90:3–7; 90:20–22; 91:16–

17). Mr. Thai explained the movement of these funds: from Backpage ad sales to Website 

Technologies to Cereus Properties. A rational jury could have concluded that the funds 

transferred in Counts 53–62 were proceeds from Backpage’s sale of illegal prostitution ads. 

ii. Intent to Conceal

Defendants also argue that there was insufficient evidence of their intent to conceal 

the source of these transactions to convict them of these charges. Defendants maintain that 

“[t]here was no testimony that the sale of Backpage and associated loan was consummated 

for the purpose of concealing from financial institutions the source of the funds.” 

(Doc. 2007 at 16). 

“[A] conviction under this provision requires proof that the purpose—not merely 

effect—of the transportation was to conceal or disguise a listed attribute.” Cuellar, 553 

U.S. at 567.23 “In other words, that a transaction is structured to hide its source is not 

enough. The government must prove that the transaction had the purpose of concealing 

23 The Subsection at issue in Cuellar concerned concealment under the statute’s 

transportation prong(A)(2)(B)(ii), however, various circuit courts of appeal have applied 

Cuellar to cases involving concealment under the statute’s transaction prong (A)(1)(B)(i). 

See Singh, 995 F.3d at 1075 (collecting cases). 

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the source.” Singh, 995 F.3d at 1075. “Where a defendant takes no steps to disguise or 

conceal the source or destination of the funds, leaving an easy-to-follow trail in moving 

money around, those transactions conspicuously lack the ‘convoluted’ character associated 

with money laundering.” Wilkes, 662 F.3d at 545–46 (cleaned up). See also United States 

v. Adefehinti, 510 F.3d 319, 322 (D.C. Cir. 2007) (“The money laundering statute 

criminalizes behavior that masks the relationship between an individual and his illegally 

obtained proceeds; it has no application to the transparent division or deposit of those 

proceeds.”). The Eleventh Circuit has opined the following:

Evidence to consider in determining whether a transaction was designed to 

conceal includes, among other things: statements by a defendant probative 

of intent to conceal; unusual secrecy surrounding the transaction; structuring 

the transaction in a way to avoid attention; depositing illegal profits in the 

bank account of a legitimate business; highly irregular features of the 

transaction; using third parties to conceal the real owner; a series of unusual 

financial moves cumulating in the transaction; or expert testimony on 

practices of criminals.

United States v. Johnson, 440 F.3d 1286, 1291 (11th Cir. 2006) (cleaned up). “Another 

important consideration is whether the money is better concealed or concealable after the 

transaction than before.” Id. (internal quotation omitted). 

Defendants argue that the only testimony as to these transactions came from Mr. 

Ferrer, who testified that these transfers were loan payments in connection with the sale of 

Backpage. (Doc. 2007 at 16). They say the sale and loan documents were prepared by 

attorneys and accountants and clearly reference the sale of Backpage, not a “shell” 

company. (Trial Exs. 5427, 5364). They say that witness testimony simply asserting that 

the transactions in these counts “involve” Backpage proceeds is insufficient to prove 

concealment. (Doc. 2029 at 10). 

The Court disagrees. Mr. Ferrer testified that Mr. Brunst formed Website 

Technologies as a shell company with the purpose of concealing that the proceeds going 

to Website Technologies was revenue from the sale of Backpage ads. (Trial Tr., Doc. 1814 

at 89:8–10; Trial Ex. 1481). He also testified that the primary source of money that flowed 

from Backpage ads was revenue from prostitution ads and that Defendants owned the 

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recipient entity Cereus Properties. (Trial Tr., Doc. 1814 at 91:16–17). From this evidence, 

a rational jury could infer that the purpose of the transactions, at least in part, was to conceal 

that the source of the proceeds flowing through Website Technologies to Cereus were 

illegal proceeds of prostitution ads sold on Backpage. See Golb, 69 F.3d at 1423–24 

(noting that jury did not have to accept defendant’s explanation that “the convoluted 

payment methods were only used to avoid Colombian currency exportation laws,” and not 

to conceal the source of the funds). 

Defendants’ requests for judgment of acquittal on Counts 53–62 are denied.

b. Counts 64–68: International Promotional Money 

Laundering Under Subsection 1956(a)(2)(A) (Messrs.

Lacey and Brunst)

Messrs. Lacey and Brunst were charged with violation of international promotional 

money laundering in Counts 64–68. Mr. Brunst was convicted of each charge and no 

verdict was returned on Mr. Lacey. 

To satisfy the requirements of Subsection 1956(a)(2)(A), evidence must establish 

that a defendant or co-conspirator transferred funds internationally with “the intent to 

promote the carrying on of specified unlawful activity.” 18 U.S.C. § 1956(a)(2)(A). At 

trial, it was established that Ad Tech B.V. made these transfers from its Netherlands bank 

account to Cereus Properties’ Arizona Bank & Trust account between August 5, 2016, and 

November 15, 2016, and that they totaled approximately $11.3 million. (Trial Tr., Doc. 

1928 at 150–51; Trial Ex. 1479). Defendants argue that there is insufficient evidence of 

their intent to promote Travel Act violations from which a jury could convict on these 

Counts. The Court again disagrees. 

A jury may infer intent to promote the illegal activity from evidence that illicit 

proceeds have been transferred. United States v. Barragan, 263 F.3d 919 (9th Cir. 2001) 

(noting that in the Ninth Circuit, government is not required to prove that a defendant 

reinvested illegal proceeds into the illegal enterprise to show intent to promote). For 

example, courts have found sufficient intent to promote where evidence showed that funds 

were distributed to co-conspirators, Manarite, 44 F.3d at 1415–16 (holding that evidence 

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that defendants distributed proceeds from illegal chip-cashing scheme was sufficient to 

support conviction for money laundering because the “scheme could not benefit its 

participants unless the chips were cashed”); were used to pay persons integral to the success 

of the illegal activity, United States v. Baker, 63 F.3d 1478, 1494 (9th Cir. 1995) (finding 

evidence that defendant made payments to suppliers of contraband cigarettes was evidence 

of intent to promote on grounds that the defendant “could not have continued the illegal 

trafficking without paying his. . . suppliers”); and even where the defendant simply 

deposited a check in his own bank account, United States v. Montoya, 945 F.2d 1068, 1076 

(9th Cir. 1991), rev’d on other grounds, McCormick v. United States, 500 U.S. 257 (1991) 

(holding that depositing a check in a bank account evidenced an intent to promote on the 

grounds that defendant could only make use of the funds if he deposited the check). 

Here, Mr. Thai testified that Ad Tech B.V. received revenue from Backpage 

following the April 2015 sale of Backpage to Ferrer. (Trial Tr., Doc. 1923 at 129: 4–17; 

Trial Ex. 1481). The transfers at issue show Ad Tech B.V. sending funds to Cereus 

Properties, funds that then “almost immediately” went to Defendants. (Trial Tr., Doc. 1923 

at 136–37). The Court finds that these transfers sufficiently evidence Defendants’ intent 

to promote the carrying on of Travel Act offenses. Construing the evidence in the light 

most favorable to the prosecution, the Jury could have divined an intent to promote the 

Travel Act offenses from Ad Tech B.V.’s deposit of funds into Cereus Properties’ account. 

Mararite, 44 F.3d at 1415. A rational jury could also have concluded that Mr. Ferrer, as 

the co-conspirator in control of Ad Tech B.V., could not have continued selling prostitution 

ads on Backpage without making these payments to Cereus Properties, which was owned 

by Defendants. Baker, 63 F.3d at 1494.24 Defendants’ requests for judgments of acquittal 

on Counts 64–68 are denied. 

/ / /

/ / /

24 This reasoning applies whether or not Cereus Properties was used for Backpage payroll 

purposes or solely functioned to collect the balance and interest on the loan. 

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c. Count 100: International Concealment Money Laundering

Under Section 1956(a)(2)(B)(i) (Mr. Lacey)

Mr. Lacey was convicted of international concealment money laundering in Count 

100. The Superseding Indictment states that on January 3, 2017, Mr. Lacey transferred 

$16.5 million from his Johnson Bank of Arizona account to a Primus Trust Co./K&H Bank 

in Hungary. (Doc. 230 ¶¶ 210–11). It alleges that Mr. Lacey knew the funds represented 

proceeds of some form of unlawful activity; and that he made the transfer in whole or in 

part to conceal the source of the proceeds of the unlawful activity. (Id. ¶ 211). 

Section 1956(a)(2)(B)(i) provides in relevant part,

(2) Whoever transports or attempts to transport a monetary instrument or 

funds from a place in the United States to or through a place outside the 

United States or to a place in the United States from or through a place 

outside the United States—

. . . 

(B) knowing that the monetary instrument or funds involved in the 

transportation, transmission, or transfer represent the proceeds of some form 

of unlawful activity and knowing that the transportation, transmission, or 

transfer is designed in whole or in part - -

. . . 

(i) to conceal or disguise the nature, the location, the source, the ownership, 

or the control of the proceeds of specified unlawful activity; . . .

shall be sentenced to a fine of $500,000 or twice the value of the monetary 

instrument or funds involved in the transportation, whichever is greater, or 

imprisonment for not more than twenty years, or both.

18 U.S.C. § 1956(a)(2)(B)(i); United States v. Monroe, 943 F.2d 1007, 1015 (9th Cir. 

1991). 

The evidence at trial showed that upon receiving his share of the loan payments to 

Cereus Properties, Mr. Lacey put his funds into five (5) two-year annuity trusts that he 

controlled.25 In July 2016, Mr. Lacey sent a letter to his attorney John Becker (“Mr. 

Becker”) asking Mr. Becker to connect him with another attorney “who has expertise in 

off-shore.” (Trial Ex. 1). The letter stated, “to revisit for just a moment, I am not interested 

in any tax avoidance, I just want to put some assets in place where litigious parties, 

25 These transfers for the basis of Counts 94–99.

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including government parties, cannot access my accounts.” (Id.) Then, sometime in 

November 2016, Mr. Lacey met with bank officer Lin Howard at Arizona Bank & Trust, 

seeking advice on how assets were seized and could be protected. (Trial Tr., Doc. 1925 at 

11:1–7). During that meeting, which Ms. Howard testified made her “very 

uncomfortable,” Mr. Lacey made it clear that he was not looking to avoid paying taxes on 

the assets but was looking to move some assets “offshore in order to protect them from 

government seizure.” (Id. at 15:10–11; 11:11–13). After this exchange, Arizona Bank & 

Trust ceased doing business with Mr. Lacey. (Id.).

Mr. Lacey’s five (5) annuity trusts were ultimately consolidated into Mr. Becker’s 

IOLTA account and on January 3, 2017, Mr. Lacey, through Becker, transferred $16.5 

million from the IOLTA account at Arizona Johnson Bank to Primus Trust Company/K&H 

Bank in Hungary to create a trust for the benefit of Mr. Lacey’s two sons. (Trial Ex. 1479). 

Thereafter, Mr. Becker, on behalf of Mr. Lacey, timely filed with the United States 

government a “Foreign Bank Account Report,” or “FBAR” related to the Hungary account, 

but only after obtaining extension of time for Mr. Lacey to do so. 

As with Counts 53–62, Mr. Lacey argues that there was insufficient evidence at trial 

to show (1) he actually concealed or intended to conceal any attribute of the funds at issue 

in Count 100; or (2) that he knew the funds at issue were the proceeds of specified unlawful

activity. (Doc. 2004 at 2). The Court will address each argument in turn.

i. Concealment 

Mr. Lacey argues that there was insufficient evidence that his international transfer 

was designed to conceal that the source of the funds were illegal proceeds of prostitution 

ads. He compares his case to that of the drug courier in Cuellar. In that case, Mr. Cuellar 

was charged with international concealment money laundering after authorities discovered 

him transporting $81,000 of drug proceeds into Mexico. Id. at 552. The funds were found

in a secret compartment of his car, covered in plastic bags and animal hair. Id. The 

Supreme Court agreed that this evidence showed Mr. Cuellar intended to conceal the 

money to transport it into Mexico but held that that evidence was insufficient to uphold 

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Mr. Cuellar’s concealment conviction because it did not show that it was his ultimate 

purpose to conceal an attribute of the funds. Id. The Court found the evidence showed 

Mr. Cuellar’s ultimate purpose was to “compensate the leaders of the operation,” not to 

conceal its source. Id. at 566 (explaining “how one moves the money is distinct from why 

one moves the money”). See also id. (“The evidence suggested that the secretive aspects 

of the transportation were employed to facilitate the transportation . . . , but not necessarily 

that secrecy was the purpose of the transportation.”). 

Mr. Lacey argues that his international transfer to the Hungarian account similarly 

had no concealment purpose. He says the purpose of the transfer was to put the funds “into 

a bank that would not close the account thereby causing further banking instability, and to 

fund a trust that had been created for Mr. Lacey’s sons.” (Doc. 2004 at 8). He further 

argues that his stated interest in placing funds where government entities could not access 

them does not evidence an intent to conceal the source of the funds because the word 

“access” does not mean the same thing as to “conceal,” and the Government has pointed 

to no authority supporting this “analytical leap.” (Doc. 2033 at 2). He points out that the 

Court defined “concealment” for the Jury as “the act of preventing disclosure or refraining 

from disclosing.” (Doc. 1999 at 4). He says his transactions relating to Count 100 were 

entirely “open and obvious,” showing only an intent to disclose the attributes of the 

transfer. For support, he points out that all the bank accounts at issue clearly belonged to 

him because he was the owner or the beneficiary of each of them; that Mr. Thai confirmed 

as much when he testified that he could follow each transaction with ease due to the names 

on the accounts; and that the existence of the Hungarian account, its location, value, and 

associated taxpayer (Mr. Lacey), were timely reported to the United States government via 

a required “FBAR.” (Id. at 6). He says that his statements to Mr. Becker and Ms. Howard 

that he had no interest in seeking a tax shelter in moving his assets off-shore further reflect 

an intention to disclose the attributes of the funds, not to conceal them. 

Although Mr. Lacey raises some plausible characterizations of the trial evidence, 

the Court ultimately disagrees that a rational juror could not have found the purpose of his 

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international transfer was to conceal the source of the funds. The money laundering statute 

is violated if the transaction in question is “designed in whole or in part” to conceal. 18 

U.S.C. § 1956(a)(2)(B)(i) (emphasis added). Unlike in Cuellar, the Government provided 

sufficient evidence to show that the purpose of Mr. Lacey’s transfers to the Hungary 

account, at least in part, was to conceal that the true source of the funds stemmed from 

sales of Backpage prostitution ads. 

The Jury could possibly have divined this intent from Mr. Lacey’s statements to his 

attorney and Ms. Howard that he wanted to put his assets somewhere the government 

“could not access them.” Though the Government has not provided the Court with a case 

in which a defendant’s intent to shield assets from government seizure amounted to 

concealment under Subsection 1956(a)(2)(B)(i), the Court nonetheless finds that a rational 

Jury could have interpreted Mr. Lacey’s statements to mean that he thought the 

international transfer would further conceal the origin of the funds and thus prevent the 

government from accessing them. The Court rejects Mr. Lacey’s suggestion that this is an 

improper analytical leap to make. 

Moreover, the jurors could have also been persuaded by the fact that Mr. Lacey’s 

transfer to Hungary was the last transfer in a series of unusual transactions that had the 

effect of distancing the funds from Backpage proceeds. In United States v. Wilkes, the 

defendant was convicted of bribery for making payments to a congressman in exchange 

for government contracts and transactional money laundering concealment under

§ 1956(a)(1)(B)(i). 662 F.3d at 547. In upholding the defendant’s conviction, the Ninth 

Circuit noted that certain transactions that “provided additional buffers between the corrupt 

contract and the [payoffs]” were evidence of intent to conceal the source of the funds 

because these transactions were “convoluted” and not “simple transactions.” Compare id. 

with Adefehinti, 510 F.3d at 323 (finding no evidence of intent to conceal where a 

fraudulent check was negotiated at a bank and most of the proceeds “were either cashed or 

went directly into accounts in the name of defendants or their associates without passing 

through any other person’s account”).

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As in Wilke, the Government here provided evidence of similar “buffer” 

transactions that a rational jury could have found were indicative of an intent to conceal 

the source of the funds. Specifically, there was evidence showing that Mr. Lacey and his 

alleged co-conspirators created Website Technologies and Cereus Properties to insulate 

those entities from the tainted Backpage proceeds. The Government’s expert witness 

showed how these funds flowed through these entities before being distributed to Mr. 

Lacey, who then sent the funds to five separate annuity trusts he controlled. From there, 

Mr. Lacey wired the funds in the trusts to Mr. Becker, who consolidated the money into 

his IOLTA account before transferring it to Hungary to create a trust for the benefit of Mr. 

Lacey’s two sons. Even though the Government’s expert testified that he could follow the 

trail of funds with relevant ease, there is enough here to suggest that these transfers, 

including the one charged in Court 100, were not the type of “simple transactions” that fall 

outside of the money laundering statute. Accord United States v. Chang, 2020 WL 

5702131, * (N.D. Cal. Sept. 24, 2020) (denying defendant’s Rule 29 motion where the 

Government introduced evidence that transfers of improperly solicited donations were 

made to an illegitimate enterprise entity in order to conceal that defendant used the money 

on personal expenses). See also United States v. Tekle, 329 F.3d 1108, 1113–14 (9th Cir. 

2003) (rejecting the defendant’s argument “that the government did not prove that he 

intended to conceal the illegal nature of [drug trafficking] funds because the ‘transactions 

in question were open, notorious, and did not disguise defendant’s identity’” as “[t]he 

necessary concealment. . . is that of the source of the funds, not the identity of the moneylaunderer”). And though the FBAR that Mr. Lacey filed suggests that he intended to pay 

his taxes on the funds therein, the filing does not necessarily negate the fact that the transfer 

concealed the source of the funds more than it did before the funds were transferred. 

Johnson, 440 F.3d at 1291. Based on these facts, a rational jury could have found that the 

purpose of Mr. Lacey’s Hungary transfer was at least in part to conceal that the funds found 

their source in the proceeds of illegal Backpage prostitution ads. 

/ / /

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ii. Knowledge

Mr. Lacey also says the Government adduced insufficient evidence that he knew 

“the funds at issue were proceeds of specified unlawful activity in the form of Travel Act 

violations for the facilitation of prostitution business enterprises.” (Doc. 2033 at 9). Not 

so. The Court finds that there was substantial evidence from which a rational juror could 

have inferred Mr. Lacey’s knowledge that the funds were proceeds from Backpage 

prostitution advertisements. 

First, the Government provided sufficient evidence from which a juror could infer 

that Mr. Lacey knew Backpage sold ads for prostitution. As has been discussed, supra,

such evidence included Mr. Lacey’s article on Backpage’s business practice, in which he 

writes that Backpage is providing “the oldest profession in the world” with transparency

(Trial Ex. 113a) and his public statement that he believed “in legalized prostitution” (Trial 

Ex. 1911b). The Government also introduced evidence of statements made during 

meetings Mr. Lacey and the other owners of Backpage had with NCMEC. During that 

meeting, NCMEC representatives presented Mr. Lacey and others with Backpage ads from 

the Adult escort section that contained links to TER. This evidence could have led a 

rational juror to infer that Mr. Lacey was aware that all or some of the Adult escort ads on 

Backpage were illegal sex for money ads. See Singh, 995 F.3d at 1075. In doing so, the 

Jury could have also found that the ads were not deserving of any First Amendment 

protections that may otherwise have insulated Mr. Lacey from liability. 

Second, as described above, testimony from Messers. Ferrer and Thai provided 

sufficient evidence from which the Jury could have concluded that the funds at issue in 

Count 100 came from Backpage’s prostitution ads. Mr. Lacey argues his statement to his 

lawyer that the source of the funds was revenue from the sale of Backpage “cannot be 

equated with knowledge that the funds at issue were the proceeds of specified unlawful 

activity, meaning the proceeds from one of the 50 charged ads.” (Doc. 2004 at 11). But

again, there is also no requirement that the Government must show that Mr. Lacey had 

knowledge that the funds that were transferred were proceeds from the specific 50 ads 

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charged. Where there is evidence from which a jury could infer the source of the funds 

was from violations of the Travel Act—here, in the form of selling sex for money ads, Mr. 

Lacey’s Subsection 1956(a)(1)(B)(i) conviction can stand. 

Defendants’ Motions for a Judgment of Acquittal on the Section 1956 Counts are 

denied. 

2. Money Laundering Counts Under 18 U.S.C. § 1957

Defendants argue that judgments of acquittal should enter in their favor on the 

Section 1957 Counts because the prosecution failed to prove that any alleged laundered 

money in Counts 69–99 “derived from specified unlawful activity”—in this case, 

violations of the Travel Act. (Doc. 2007 at 18). All of the transfers at issue in Counts 69–

99 are alleged to derive from unlawful Backpage proceeds. 

“A conviction for money laundering under 18 U.S.C. § 1957 requires the 

government to show: (1) the defendant knowingly engaged in a monetary transaction; (2) 

he knew the transaction involved criminal[ly derived] property; (3) the property’s value 

exceeded $10,000; and (4) the property was derived from a specified unlawful activity.” 

United States v. Roger, 321 F.3d 1226, 1229 (9th Cir. 2003).26 The statute defines 

“criminally derived property” as “any property constituting, or derived from, proceeds 

obtained from a criminal offense.” 18 U.S.C. § 1957(f)(2). “In a prosecution for an offense 

under this section, the Government is not required to prove the defendant knew that the 

offense from which the criminally derived property was derived was specified unlawful 

activity.” Id. § 1957(c). Indeed, the “statute applies to the most open, above-board 

transaction.” United States v. Rutgard, 116 F.3d 1270, 1291 (9th Cir. 1997). 

Unlike Section 1956 charges, the Ninth Circuit imposes a tracing requirement in 

Section 1957 cases due to Section 1957’s potentially broad reach. Under this view, the 

prosecution can succeed on a Section 1957 charge in one of three ways: (1) by establishing 

that the entire business from which the funds derived was an illegal enterprise; (2) by 

showing that a deposit of at least $10,000 of criminally derived proceeds were made into 

26 Travel Act violations qualify as “specified unlawful activity.” 18 U.S.C. § 1957(f)(3); 

18 U.S.C. § 1956(c)(7)(A); 18 U.S.C. § 1961(1).

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defendant’s account; or (3) in the case of a withdrawal transaction, by showing that all of 

the funds were transferred out of the account. Rutgard, 116 F.3d at 1292; United States v. 

Yagman, 502 F.Supp.2d 1084 (C.D. Cal. Aug. 17, 2007). In contrast to other circuits, the 

Ninth Circuit rejects the presumption that proof that some criminally derived funds exist 

in an account means that a subsequent transfer of funds out of that account involves those 

criminally derived funds. Rutgard, 116 F.3d at 1292–93 (explaining that “[t]he statute does 

not create a presumption that any transfer of cash in an account tainted by the presence of 

a small amount of fraudulent proceeds must be a transfer of these proceeds . . . and [t]o 

create such a presumption in order to sustain a conviction under § 1957 would be to 

multiply many times the power of that draconian law”). 

Here, the Government’s theory was that all proceeds from Backpage were 

criminally derived from Defendants’ Travel Act violations, and thus all subsequent 

transfers stemming from Backpage and/or Website Technologies and Ad Tech B.V. were 

unlawful under Section 1957.27 The Government did not, however, provide sufficient 

evidence at trial that every ad sold on Backpage.com prior to these transfers was a Travel 

Act violation such that a rational jury could have traced the funds back to a criminallyderived source. Even the fact that the Government offered evidence showing that the 

majority of Backpage’s revenue—at times up to 96%—stemmed from sales of ads posted 

in the Adult Escort section of Backpage is insufficient to sustain these convictions. A 

nearly identical argument was unsuccessfully advanced in United States v. Hanley, 190 

F.3d 1017, 1024, 1025–26 (9th Cir. 1999), superseded in part by U.S.S.G. § 2S1.1 (2001)

(rejecting the government’s argument that the tracing requirement was satisfied where the 

27 The Court asked Government counsel to clarify this point during oral argument on the 

Rule 29 Motions: 

Court: So is it your position that, essentially then, any proceeds that were received from 

the operation of Backpage at that time then - - because they were considered illegals 

proceeds, then whatever was used with that money to purchase then could be alleged? 

Mr. Kozinets: Absolutely, Your Honor.

Court: That’s the – that’s the position? 

Mr. Kozinets: Absolutely. 

(Doc. 1903 at 69). 

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government had proven that the great majority of the funds in the account were criminally 

derived funds). And because the Government made no attempt to trace the proceeds that 

derived from a particular Travel Act violation or violations, it cannot be said that a rational 

jury could have concluded “beyond mere speculation” that at least $10,000 of criminally 

derived proceeds were transferred to Defendants in any of the Section 1957 charges. 

Yagman, 502 F.Supp.2d at 1089. 

Because Counts 69–99 all suffer from this evidentiary deficiency, the Court will 

enter judgments of acquittal on each of these charges.

3. Conspiracy to Commit Money Laundering (Count 52)

To convict an offender of money laundering conspiracy under Subsection 1956(h), 

the government must prove the following elements beyond a reasonable doubt: (1) there 

was an agreement to commit money laundering; (2) the defendant knew the objective of 

the agreement; and (3) the defendant joined the agreement with the intent to further its 

unlawful purpose. United States v. Jaimez, 45 F.4th 1118, 1124 (9th Cir. 2022), cert. 

denied, 143 S. Ct. 1038 (2023). Here, the object of the alleged conspiracy was to commit 

the substantive money laundering offenses alleged in the Superseding Indictment. 

(Doc. 230 ¶ 203(a)–(e)). 

Defendants reiterate many of the arguments they made relating to the alleged 

deficiency of evidence supporting the substantive money laundering offense to argue they 

are entitled to a judgment to acquittal on the conspiracy to commit money laundering 

charge. (See Doc. 2007 at 20–21). They also argue there was insufficient evidence of an 

agreement to launder money as alleged. As discussed above, the Court finds that there is 

sufficient evidence to convict Defendants on all of the Section 1956 money laundering 

charges. As explained, supra, the Government was not required to “link” a particular 

Travel Act violation to a violation of Section 1956 in order for those charges to stand. See 

e.g., Golb, 69 F.3d at 1422 (stating that a defendant need not actually be convicted of the 

underlying specified unlawful activity for a money laundering conviction to stand where 

there is evidence from which a jury could have inferred that the source of laundered 

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proceeds was illegitimate). 

Moreover, a rationale juror could have inferred that Defendants agreed to form 

entities and structure the sale of Backpage to distance themselves from the unlawful 

proceeds stemming from Backpage’s sale of prostitution ads, i.e., violations of the Travel 

Act by facilitating the promotion of prostitution. Kaplan, 836 F.3d at 1212 (holding that 

an agreement “can be proved by direct or circumstantial evidence, including inferences 

from circumstantial evidence”).

The Court will therefore deny Defendants’ request to enter a judgment of acquittal 

on Count 52. 

III. DEFENDANTS’ RULE 33 MOTION FOR NEW TRIAL28

Defendants have also filed a joint Motion for a New Trial. Rule 33 permits the 

Court to vacate a judgment and grant a new trial “if the interest of justice so requires.” 

Fed. R. Crim. P. 33(a). Although a court’s power to grant a motion for a new trial is “much 

broader than its power to grant a motion for judgment of acquittal,” it may not grant the 

motion unless it finds that “despite the abstract sufficiency of the evidence to sustain the 

verdict, the evidence preponderates sufficiently heavily against the verdict” such that “a 

serious miscarriage of justice may have occurred.” United States v. Kellington, 217 F.3d 

1084, 1097 (9th Cir. 2000) (citation omitted); United States v. Alston, 974 F.2d 1206, 

1211–12 (9th Cir. 1992). The “burden of justifying a new trial rests with the defendant.” 

United States v. Saya, 101 F.Supp.2d 1304, 1307 (D. Haw. 1999) (citing United States v. 

Shaffer, 789 F.2d 682, 687 (9th Cir. 1986)). “[T]he government bears the burden of 

proving beyond a reasonable doubt that an error was harmless.” United States v. Benamor, 

925 F.3d 1159, 1166 (9th Cir. 2019) (citation omitted). In general, motions for new trial 

“are not favored by the courts and should be viewed with great caution.” United States v.

Rush, 749 F.2d 1369, 1371 (9th Cir. 1984) (internal quotation omitted). 

The Court will review Defendants’ arguments in turn. 

28 The Court notes that the parties, again, omit record support for their assertions, and quite 

often mischaracterize the record testimony. The Court declines to scour the months-long 

trial record or years long case docket to find support for their unsupported assertions. 

 

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A. Jencks & Brady Violations

Making some of the same arguments that they did in their unsuccessful post-trial 

Motions to Dismiss (Docs. 1958; 1967; 1972), Defendants first argue that a new trial is 

warranted because the Government failed to make timely disclosures to the Defendants as 

required by the Jencks Act, 18 U.S.C. § 3500, and Brady v. Maryland, 373 U.S. 83 (1963)

(“Brady”).

29

 They argue the Government failed to timely produce (1) emails between 

Mr. Ferrer and government witness postal inspector Lyndon Versoza; and (2) documents 

disclosing “the factual information the government developed during its investigation of 

Backpage.com in Western District of Washington in 2012–2013 [(the “WDWA 

Investigation”)].” (Doc. 2009 at 3). 

1. Mr. Ferrer’s Emails to Lyndon Versoza 

The Court’s February 7, 2024, Order denying Defendants’ Motion to Dismiss 

(Doc. 2042) addressed certain of Mr. Ferrer’s emails, finding that they were “signed or 

otherwise approved or adopted” by him and therefore qualified as Jencks material under 18

U.S.C. § 3500(e). (Id. at 8). However, the Court also determined that the Government’s

late disclosure did not warrant dismissal of the case or striking Mr. Ferrer’s testimony 

because the material had been previously disclosed. (Id. at 9). Defendants do not advance 

any new grounds in their Rule 33 Motion. Thus, for the reasons stated in its 

February 7, 2024, Order, the Defendants’ Motion for a New Trial based on these grounds 

is denied.

2. Presumed Brady Information From the 2012–13 WDWA 

Investigation of Backpage

Defendants next argue the Government failed “to produce nearly all the factual 

information developed during the WDWA Investigation . . . [which] did not result in a 

prosecution of Backpage or its owners.” (Doc 2009 at 2). The Government responds that 

this argument “speculate[s] about what that investigation ‘determined’ and assert[s], 

without support that unspecified materials from the investigation are plainly exculpatory 

29 The Defendants asserted this argument without benefit of the Court’s February 7, 2024, 

Order (Doc. 2042) and the Court incorporates its findings from that Order because their 

arguments are mostly duplicative. 

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and impeaching” and that Defendants have already litigated and lost this argument. 

(Doc. 2022 at 3).

The Defendants’ Motion is indeed based on speculative findings of the WDWA 

Investigation and the reasons why it did not result in a prosecution of Backpage or its 

owners. Defendants speculate that the WDWA Investigation included potential 

Brady material because it likely determined that “though many people who saw 

Backpage.com adult ads might conclude the ads related to prostitution, their conclusions 

would be unsound because so many activities involving sex and money are lawful;” and 

because “Backpage.com’s moderation practices were consistent with industry standards.” 

(Doc. 2009 at 5). They do not cite to any record evidence or testimony to support these 

claims. Nonetheless, they accuse the Government of failing to produce this material under 

Brady and say this failure warrants a new trial. (Doc. 2009 at 5 (“[T]he government’s 

refusal to produce to the defense these plainly exculpatory and impeaching materials

warrants, at minimum, a new trial.”) (emphasis added)).

As best as the Court can glean, Defendants assert that they were prejudiced by the 

non-production because in their absence they were unable to adequately defend against 

Mr. Ferrer’s statement at trial that in 2012 Backpage was experiencing “pressure” due to 

“another prostitution investigation of the site.” (Trial Tr., Doc. 1971 at 80:5–8; see 

Doc. 2009 at 4 (arguing that when the Government elicited this statement it “used the 

investigation as a sword at trial while seeking to shield disclosures relating to that 

investigation”)). They argue that, without the WDWA disclosure, they were hampered 

from offering that the WDWA Investigation exonerated Backpage and its owners from 

illegality. (See Doc. 2009 at 4–5). 

From the outset of the case, Defendants have strenuously litigated the Government’s 

discovery production relating to the WDWA Investigation. In addressing Defendants’ 

November 1, 2021, Motion to Dismiss the Superseding Indictment (Doc. 1355), this Court 

reviewed their assertion that the Government failed to produce exculpatory evidence 

related to the WDWA investigation. (See Doc. 1444 (the Court’s December 29, 2021 

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Order)). Earlier, in Defendants’ September 9, 2021, Motion to Compel (Doc. 1281), 

Defendants sought an order compelling the Government to produce all materials from its 

WDWA investigation that were relied upon when its attorneys concluded that there was no 

evidence of criminality and asserting that they sought all evidence from the investigation, 

noting that it is likely exculpatory. (Id. at 6). This Court found that these same arguments 

had been previously considered and ruled upon. Two previously-assigned courts had 

already found “[i]t is clear to the Court that the investigation that took place in the Western 

District of Washington is wholly separate from the criminal case before the Court . . . and 

[t]he Defendants have failed to demonstrate how the mental impressions and legal analyses 

from attorneys that are not involved in this case could potentially be considered exculpatory 

evidence.” (See Doc. 1444 (citing Doc. 449)). Those courts also found that the attorney 

memos were irrelevant to the indictment and proceedings in this criminal case. That the 

Court has now heard the case in its totality does not give it reason to change these rulings 

or grant Defendants a new trial based on alleged Brady violations. 

During the trial, the Court permitted the Government to introduce testimony of the 

Defendants’ knowledge that Backpage was being used to promote prostitution. For 

example, Mr. Ferrer was allowed to testify that several NGOs repeatedly informed 

Defendants that their website was selling girls and women for money and that Backpage 

was receiving thousands of subpoenas relating to prostitution and trafficking on Backpage. 

Mr. Ferrer’s brief statement that Backpage and its owners were “pressured” was another 

example of testimony that suggested Defendants knew their website was facilitating the 

promotion of prostitution. Defendants, in turn, had ample opportunity to solicit testimony 

from the Government and their witnesses about whether the Travel Act counts were 

actually offers of sex for money or that the Defendants were on notice that they were sex 

for money ads. Indeed, the Defendants’ own expert witness, Dr. Kimberly Mehlman 

Orozco, testified that no one could be certain that any ad, irrespective of where it was 

posted, is an actual sex for money ad. Trial Tr., Doc. 1930 at 50:12–20. The Defendants 

have not convinced this Court (or any other, previously-assigned court) that the presumed 

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Brady material from the WDWA Investigation would have been material to the issues at 

trial, could have been used to impeach witnesses, or that a new trial would likely have 

resulted in acquittal. United States v. Kulczyk, 931 F.2d 542, 548 (9th Cir. 1991). 

Defendant’s Rule 33 Motion is therefore denied on that basis.

B. Mr. Ferrer’s Testimony Relating to Ms. Robinson

Defendants next argue that they are entitled to a new trial because the Government

“elicited false or misleading testimony from Carl Ferrer” relating to his communications 

with Ms. Robinson, the poster in ads from Counts 3, 6–11, and 18. (Doc. 2009 at 6); see 

also supra Section II.B(2)(b) (“Commission of Travel Act Violations in Counts 3, 6–11, 

18”). When, as here, a defendant asserts a new trial is warranted because the prosecution 

used perjured testimony, additional standards apply. If the perjury was used knowingly 

the conviction “must be set aside if there is any reasonable likelihood that the false 

testimony could have [a]ffected the judgment of the jury.” United States v. Young, 17 F.3d

1201, 1203 (9th Cir. 1994) (quoting United States v. Agurs, 427 U.S. 97, 103 (1976)). If 

the defendants cannot show that the Government knowingly used false testimony, then the 

conviction will be set aside “if there is a reasonable probability that, had the evidence been 

disclosed to the defense, the result of the proceeding would have been different.” United

States v. Endicott, 869 F.2d 452, 455 (9th Cir. 1989) (citing United States v. Bagley, 473

U.S. 667, 682 (1985)). 

Upon review of the record, the Court does not find evidence that Mr. Ferrer’s 

testimony about his communications with Ms. Robinson were false or misleading. The 

Government introduced hundreds of exhibits and testimony through Ferrer about his email 

communications. Mr. Ferrer testified that he used several email addresses including 

carl.ferrer@backpage.com and carl@backpage.com. Mr. Ferrer testified that he recalled 

having email exchanges with Ms. Robinson using carl@backpage.com “from 2010–2018” 

and that “there were a lot of emails.” (Trial Tr., Doc. 1795 at 79). 

Defendants say a new trial is required because Mr. Ferrer stated on crossexamination that carl@backpage.com “really wasn’t my email address.” From this 

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statement they conclude that his testimony that he communicated with Ms. Robinson 

through that email address “was false (or at least highly misleading).” (Doc. 2009 at 8). 

They contend “Mr. Ferrer admitted on cross-examination that the emails to and from the 

carl@backpage.com email address were received by and responded to by his staff, not by 

him, contrary to his testimony on direct examination.” (Doc. 2009 at 8) (emphasis added). 

These contentions are unsupported by the record and conveniently ignore other 

testimony Mr. Ferrer gave about his communications. The Court’s scrutiny of Mr. Ferrer’s 

testimony fails to find a statement that Mr. Ferrer did not respond to emails sent to 

carl@backpage.com. The record reflects that Mr. Ferrer acknowledged his primary email 

address was carl.ferrer@backpage.com, but that he also received emails at 

carl@backpage.com. (See Trial Tr., Doc. 1867 at 106–07). Though Mr. Ferrer testified 

he used carl@backpage.com primarily for marketing and that others also used it, he also 

testified that “they would often bring emails to my attention if they needed help with it.” 

(Doc. 1867 at 104). Significantly, Mr. Ferrer recognized certain email exchanges as emails 

that he personally responded to. For example, when asked whether Trial Exhibit 163 was 

“also an e-mail exchange between you and Pamela Robinson?” he answered “Yes, it is.” 

(Trial Tr., Doc. 1795 at 86). He further acknowledged that Trial Exhibit 164 was a 

responsive email he drafted to Ms. Robinson, and that he had to have Mr. Spear approve it 

before he sent it because the email addressed Backpage’s safety and security 

enhancements, decisions he said were at Mr. Spear’s pay grade. (Id. at 89–90).

Based on these circumstances, the Court does not find that Mr. Ferrer’s testimony 

recalling eight years of email exchanges between carl@backpage.com and Ms. Robinson 

was perjury. The Defendants merely anchor their Rule 33 Motion to Mr. Ferrer’s 

acknowledgment that others had access to that email address. Without more, the Court 

cannot find that this one statement “could have affected the judgment of the jury” in 

convicting Mr. Spear on Counts 3, 6–11, and 18. Thus, Defendants Rule 33 Motion is 

denied on this basis. 

/ / /

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C. The Government’s Opening and Closing Statements

Defendants next argue they are entitled to a new trial because “the Government 

repeatedly made improper arguments in its opening and closing statements.” 

(Doc. 2009 at 9). They claim the Government improperly urged the Jury to convict them 

on improper grounds including: (1) on a legally insufficient object of conspiracy, that is 

“to make money;”30 (2) an impermissible boundless conspiracy; (3) on the grounds of 

“promoting prostitution” (where statute only proscribes facilitating the promotion of 

prostitution); (4) without a showing of specific intent, and (5) because it improperly 

“exhorted” the Jury to convict Defendants on publication of ads protected by the First 

Amendment. (Id. at 9–16). Defendants also argue that the Government improperly 

referenced evidence in its closing argument that was admitted under hearsay exceptions for 

truth of the matter. 

As an initial matter, the Court notes that the Jury was instructed that 

“statements . . . and arguments by the lawyers are not evidence.” (Doc. 1998 at 7). The 

Jury was clearly instructed on the substantive Conspiracy count and on the meaning of 

“promote” or “facilitate the promotion of” as those terms are defined in the Travel Act. 

(Id. at 24–25, 30). Without new and/or material evidence to the contrary, a jury is regularly 

presumed to accept the law as stated by the court, not as stated by counsel. See United 

States v. Rodrigues, 159 F.3d 439, 451 (9th Cir. 1998). So, this Court presumes that the 

Jury adhered to its instructions, rather than the attorneys’ arguments, in its decisional 

process. 

Nonetheless, a criminal conviction can be overturned based on a prosecutor’s 

comments if they affected the fundamental fairness of the trial. United States v. Young,

470 U.S. 1, 11 (1985). A “trial Judge has broad discretion in controlling closing argument, 

and improprieties in counsel’s arguments to the jury do not constitute reversible error 

unless they are so gross as probably to prejudice the defendant, and the prejudice has not 

been neutralized by the trial judge.” United States v. Navarro, 608 F.3d 529, 535–36 (9th 

30 This is the same argument asserted in their Rule 29 Motions. To the extent previously 

discussed, the Court incorporates its related findings for purposes of their Rule 33 Motion.

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Cir. 2010) (internal quotations and citations omitted). Furthermore, it is not misconduct 

for the Government to argue reasonable inferences based on the record. See United States

v. Necoechea, 986 F.2d 1273, 1276 (9th Cir. 1993). 

1. Legally Insufficient Object of the Conspiracy 

As they did in their Rule 29 Motions, Defendants maintain the Government 

improperly told the Jury it was enough to convict Defendants of conspiracy to commit the 

Travel Act when the prosecutor stated that the object of the conspiracy was to make money, 

which Defendants contend is a legally insufficient object on which to convict for 

conspiracy. (Trial Tr., Doc. 1933 at 6–7).31 The Court has repeatedly addressed and 

rejected this argument. The Ninth Circuit recognized that the object of a conspiracy can 

be to accomplish an unlawful purpose, or a “lawful purpose by unlawful means.” 

Caplan, 633 F.3d at 542. In its rebuttal closing argument, the Government clarified this 

point for the Jury: 

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.

(Trial Tr., Doc. 1961 at 40:12–20) (emphasis added). The Government’s rebuttal 

demonstrates that it did not ask the Jury to convict on a legally insufficient object of 

conspiracy. 

2. Boundless Conspiracy 

The Court need not address Defendants’ boundless conspiracy argument because 

nothing in the Government’s summation supports that claim. In reminding the Jury of the 

evidence supporting each Travel Act count, the Government adhered to the Court’s prior 

orders that Defendants were not “indicted for the amorphous notion of 

31 The record does not reflect that any Defendant objected to the Government’s statement. 

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‘prostitution’ . . . they were indicted for facilitating (via publishing ads) on fifty distinct 

occasions where prostitutes, prostitution-related business, or other groups were involved 

in the business of prostitution.” (Doc. 946 at 13). 

3. Promoting Prostitution and Specific Intent 

The Court rejects Defendants’ arguments that the Government urged the Jury to 

convict them on the grounds of promoting prostitution and without a showing of specific 

intent. Defendants identify statements made by the Government during opening and 

closing arguments that they say inferred the Jury could convict Defendants on promoting 

prostitution as opposed to facilitating the promotion of prostitution. However, the Court 

will not hold the Government to a standard that requires the prosecutors to quote the 

language of the Travel Act each time they refer to it. As discussed, the Jury was properly 

instructed on the elements of the Travel Act. (Doc. 1998 at 30). The same is true with 

regard to the legal definition of specific intent. (Id.) The Jury is presumed to follow the 

Court’s instructions, including that they apply the law as given to them. (Id. at 2). 

4. Reference to Evidence Admitted Under Exceptions to Hearsay 

Defendants next argue a new trial is warranted because the Government improperly 

told the Jury during its closing that (1) Defendants “know about the Attorneys Generals 

letters, and they know they are not on solid ground;” and (2) that the CNN documentary 

showed that Backpage had “cornered the market on prostitution advertisement” and “all 

you had to do was go to Backpage.com and post an ad and the phone started ringing in 

minutes.” (Doc. 1009 at 17). Defendants say in doing so, the Government improperly 

referenced evidence “for the truth”—e.g., “that all the adult ads on Backpage.com were 

prostitution ads, and that nearly all of the Backpage.com’s revenues were from prostitution 

ads”—when at trial, the State Attorneys General letters and CNN documentary were only 

admitted to prove Defendants were on notice that Backpage posted ads for prostitution. 

(Id.)

32

 

32 Defendants also state that the Government used “that evidence for its truth throughout 

the trial . . .” (Doc. 2009 at 17). However, Defendants offer no trial record citation for this 

assertion, so the Court declines to consider it.

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Upon review of the record, the Court rejects this kitchen sink argument. As 

acknowledged, the Government sought the admission of the AG letters and the CNN 

documentary to show that Defendants were aware of Backpage’s prostitution ad platform. 

Relevant evidence is admissible so long as it is “probative of the proposition it is offered 

to prove, and . . . the proposition to be proved must be one that is of consequence to the 

determination of the action” and the Government is permitted to argue reasonable 

inferences based on the record. Necoechea, 986 F.2d at 1276; United States v. Click, 807 

F.2d 847, 850 (9th Cir. 1989). The Government introduced evidence, including coconspirator statements, to show Defendants’ knowledge or absence of mistake that sex for 

money ads were being posted on Backpage. There was nothing grossly prejudicial about 

the Government’s closing references to these categories of evidence, especially considering 

the Court’s instructions and admonishment that attorneys’ arguments are not evidence. 

Indeed, the Jury’s mixed verdict supports an inference that they adhered to the Jury 

Instructions by applying the evidence and testimony to the law. The Court finds nothing 

in the Government’s closing argument affected the fundamental fairness of the Defendants’ 

trial. The Court denies the Defendants’ Rule 33 Motion on these grounds. 

D. Jury Instruction Changes 

Defendants next argue that they should receive a new trial because the Court, after 

receiving briefing from the parties, made modifications to two of the Jury Instructions prior 

to closing arguments. Though Defendants “welcomed” the changes, they claim the 

changes “severely prejudiced” them in three ways, namely because (1) they were unable 

to make use of the instructions in their opening statements; (2) they were unable to shape 

testimony elicited on cross-examination; and (3) they were unable to assess the witnesses 

they would call in the defense case. (Doc. 2009 at 17–19). The Court is not persuaded. 

1. First Amendment Jury Instruction 

Prior to trial, the Court approved a First Amendment-related jury instruction that 

stated in part that “the First Amendment does not protect speech relating to illegal activity.” 

(Id. at 18). After the close of evidence, but prior to closing arguments, the parties were 

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allowed to argue their positions as to certain Jury Instructions. With regard to the 

First Amendment instruction, the Court replaced the statement that “the First Amendment 

does not protect speech relating to illegal activity,” with a sentence that read, “[i]f you find 

that an ad proposes an illegal transaction, it is not protected by the First Amendment.” 

(Doc. 1998 at 48).33 

Defendants first argue, without explanation, that “the instruction ultimately given 

would have allowed for a viable advice of counsel defense” at trial. (Doc. 2009 at 19). 

Whether Defendants could raise an advice of counsel defense was an issue that was 

litigated extensively and ad nauseum in pre-trial motions, on the eve of trial, and again at 

various points during trial. The Court told Defendants, in no uncertain terms, that the 

defense was theirs to raise if they could first meet the four preconditions laid out in 

United States v. McLennan, 563 F.2d 943, 946 (9th Cir. 1977). (See e.g., Doc. 1643 at 12–

13 (stating that “to the extent [Defendants] intended to raise this argument, whether in 

opening statement, closing argument, or their case in chief, they must first proffer a 

showing of all four factors.”)).34 Defendants steadfastly refused to waive the attorneyclient privilege with regards to their communications. (Doc. 1643 at 12–13). The 

Defendants never attempted to clear the McLennan hurdles, so they cannot now claim 

prejudice over their own inaction by somehow placing blame on changes to the First 

Amendment Jury Instruction.

In an equally unspecific manner, Defendants also argue that the Court admitted 

33 The complete Jury Instruction states:

All speech is presumptively protected by the First Amendment to the United States 

Constitution. However, the First Amendment does not protect speech that proposes an 

illegal transaction. Prostitution is illegal in 49 states and most of Nevada. It is the 

government’s burden to establish that each of the ads alleged in this case is an ad for 

prostitution and not for another purpose such as an ad for an escort, dating or massage 

service. If you find that an ad proposes an illegal transaction, it is not protected by the First 

Amendment. 

(Doc. 1998 at 48).

34 The factors include: (1) they made a complete disclosure to counsel; (2) they requested 

counsel’s advice as to the legality of the contemplated action; (3) they received advice that 

it was legal; and (4) they relied in good faith on the advice. 563 F.2d at 946. 

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“large quantities of evidence that was highly prejudicial to the defense that arguably could 

have been relevant under a ‘speech relating to illegal activity’ standard, but which would 

not have been under the “speech that poses an illegal transaction” standard. 

(Doc. 2009 at 19). They say that if they knew the case would go to the Jury under “speech 

that proposes an illegal transaction” standard, they would have “had much stronger 

arguments to exclude most, if not all, of the ‘notice’ evidence,” which they say “could have 

dramatically altered the evidence admitted.” (Id.) Defendants entirely fail to specify what 

“notice” evidence they say would not have been admitted. They also say they “objected to 

all of this evidence,” but do not give a description or record citations to support their 

contention. (Id.) The Court refuses to sift through the lengthy trial record and make 

guesses on Defendants’ behalf. The Court does note that Mr. Spear, in closing, asserted 

“[t]hese ads are not on their face anywhere close to being prostitution ads. You’ve heard 

the witnesses tell you that.” (Trial Tr., Doc. 1959 at 16).35 But in sum, Defendants have 

not met their Rule 33 burden.

2. Travel Act Jury Instruction

Defendants also claim they were prejudiced because the Court did not provide the 

Jury with the following instructions:

[T]o satisfy the specific intent requirements of the Travel Act, the 

government must prove beyond a reasonable doubt, for each Count, that each 

defendant in some significant manner associated himself or herself with the 

particular business enterprise associated with the ad charged in that Count 

with the intent to promote, or facilitate the promotion of, the prostitution 

offenses committed by that business enterprise. 

(Doc. 2009 at 1718). Instead, the Court instructed the Jury as follows: 

To prove specific intent, the government must establish that 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 offenses that the defendant knew to be unlawful under state law.

35 Notably, Defendants omit reference to the Jury being instructed that they can apply the 

direct and circumstantial evidence instruction to determine if each ad was protected by the 

First Amendment. 

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(Doc. 1998 at 30). 

First, the Defendants argue that, had the Court settled on their proposed instruction,

they would have been able to “mount the specific intent defense they intended – an aiding 

and abetting defense – whether in their openings or through eliciting evidence during the 

trial.” (Doc. 2009 at 18). Here too, Defendants do not explain why they were prevented 

from mounting an aiding and abetting defense under the Court’s instruction, and the Court 

will not attempt to define their argument. So, again, the Court cannot make a prejudice 

determination. 

Defendants further assert that they learned of these two changes “on the cusp of 

closing” and so they had no time to prepare. Not so. As the Government points out, the 

closing statements took place over the course of several days—October 27 through 

November 2, 2023—due to juror circumstances and to enable the defense counsel to 

prepare. Moreover, Mr. Lacey’s counsel sought and received his preferred 

First Amendment jury modification so he cannot now fain prejudice. The Court is not

persuaded that these assertions suggest that “a serious miscarriage of justice may have 

occurred.” Alston, 974 F.2d at 1211–12. The Defendants have not met their burden of 

demonstrating that standard is met and thus, a new trial will not be granted on this basis. 

Endicott, 869 F.2d at 454.

E. Insufficient First Amendment and Travel Act Jury Instructions

Defendants next assert that, though the First Amendment instruction “included the 

correct legal standard,” more was needed. Relating to the Travel Act instruction, they 

claim that “although the Court added language looking somewhat like an aiding and 

abetting instruction” that language materially “eroded what was required for the jury to 

find specific intent.” (Doc. 2009 at 20). They urge that these flaws require a new trial.

A Rule 33 motion may be granted for failure to give proper jury instructions. 

However, an instructional error does not automatically warrant a new trial because a 

defendant must show that the error affects substantial rights. See Fed. R. Crim. P. 52(a); 

United States v. Miller, 953 F.3d 1095, 1103 (9th Cir. 2020). “[A]n error in misdescribing 

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or omitting an element of the offense in a jury instruction is harmless if it is ‘clear beyond 

a reasonable doubt that a rational jury would have found the defendant guilty absent the 

error.’” United States v. Thongsy, 577 F.3d 1036, 1043 (9th Cir. 2009) (quoting Neder v.

United States, 527 U.S. 1, 18 (1999)). When applying this standard, a court should consider 

“the jury instructions and the trial record as a whole.” United States v. Espino, 892 F.3d 

1048, 1053 (9th Cir. 2018). Where the evidence actually presented at trial and “other 

language in the jury instructions” assures the court that the jury could not have based its 

verdict on the erroneous language in the instruction, the Ninth Circuit has found the error 

to be harmless. Miller, 953 F.3d at 1103; see also Espino, 892 F.3d at 1053; United States

v. Perez, 116 F.3d 840, 847 (9th Cir. 1997) (“Even though an element of the offense is not 

specifically mentioned [in the jury instructions], it remains possible the jury made the 

necessary finding.”).

1. First Amendment Jury Instruction 

With regard to the First Amendment instruction, the Defendants would have 

preferred the Court to have told the Jury that “the speech must be evaluated from the 

content of the speech alone, and speech is presumptively protected unless it proposes a 

transaction [sic] would necessarily constitute an illegal act.” (Doc. 2009 at 19). Because 

the Jury was not told as much, they say Mr. Spear was convicted on Travel Act counts 

“even though the publication of the ads underlying those counts were protected by the First 

Amendment.” (Id. at 20). But when viewing the Court’s instruction in light of the entire 

trial record, the Court disagrees. As discussed supra in Section II.B of this Order, coconspirators and law enforcement witnesses understood the terms in the Government’s 

Travel Act ad exhibits to be sex for money ads because the ads were accompanied by 

photos of barely clad females and because they included coded terms like “roses”, “GFE” 

(girl-friend experience), “in-call and out-call,” “clean,” “hygienic” and “G-R-3-3-K.” 

Moreover, each victim/witness that testified identified her ad and stated that the ads were 

sex for money ads. So, an instruction stating “the speech must be evaluated from the 

content of the speech alone” would not have altered Mr. Spear’s outcome. Therefore, a 

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new trial on these grounds is not warranted. 

2. Travel Act Jury Instruction 

Finally, the Court’s Travel Act instruction adhered to the Ninth Circuit’s precedent. 

The instructions clearly stated that to show that Messrs. Spear and Lacey violated the 

Travel Act by selling and publishing prostitution ads on Backpage, the Government was 

required to establish that Messrs. Spear and Lacey “in some significant manner associated” 

themselves with the prostitution business seeking to post an ad on Backpage. (Doc. 1998 

at 30); see also Gibson Specialty Co., 507 F.2d at 449 (requiring the government to show 

each defendant “had specific intent to promote, manage, establish, carry on or facilitate 

one of the prohibited activities”); United States v. Polizzi, 500 F.2nd 856, 876–77 (9th Cir. 

1974) (stating the required mens rea under the Travel Act is the “specific intent to facilitate 

an activity which the accused knew to be unlawful under state law”). Given the Court’s 

adherence to this Circuit’s precedent, it is hard to see how the jury instructions 

misdescribed or omitted an element of the offense, such that a rational jury would have 

acquitted a defendant absent the error. 

Having considered each argument advanced in the Defendants’ Rule 33 Motion for 

a New Trial, the Court is not persuaded that a serious miscarriage of justice may have 

occurred. Accordingly, the Rule 33 Motion is denied. 

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IV. CONCLUSION

In conclusion, after viewing the record in the light most favorable to the 

Government, the Court finds there is insufficient of evidence to support convictions under 

Counts 19–51 as to Mr. Lacey and Counts 66–99 as to Messrs. Lacey, Brunst, and Spear. 

The Court will issue judgments of acquittal for those Counts. In all other respects, 

Defendants’ Rule 29 Motions are denied. Moreover, the Court does not find cause to grant 

a new trial for any of the reasons stated in Defendants’ Rule 33 Motion. That Motion will 

be denied in its entirety. 

Accordingly, 

IT IS ORDERED that Defendants’ Oral and Supplemental Rule 29 Motions 

(Docs. 2004; 2006; 2007) are granted in part and denied in part. The Clerk is directed 

to issue Judgments of Acquittal for Defendant Michael Lacey on Counts 19–51 and 66–

70, 81, 83–84, 86, 88–92 and 94–99; for Defendant John Brunst on Counts 66–68, 78–84, 

86–93; and for Defendant Scott Spear on Counts 71–78, 85 and 93. In all other respects, 

the Motions are denied. 

IT IS FURTHER ORDERED that Defendants’ Rule 33 Motion for New Trial 

(Doc. 2009) is denied as stated herein. 

Dated this 23rd day of April, 2024.

Honorable Diane J. Humetewa

United States District Judge

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