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Paul J. Cambria, Jr. (NY 15873, admitted pro hac vice) 

Erin E. McCampbell (NY 4480166, admitted pro hac vice) 

LIPSITZ GREEN SCIME CAMBRIA LLP

42 Delaware Avenue, Suite 120 

Buffalo, New York 14202

Telephone: (716) 849-1333

Facsimile: (716) 855-1580

pcambria@lglaw.com 

Attorneys for Defendant Michael Lacey

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America,

 Plaintiff,

vs.

Michael Lacey, et al., 

 

 Defendants.

NO. CR-18-00422-PHX-SMB

DEFENDANT MICHAEL LACEY’S 

REPLY IN FURTHER SUPPPORT OF 

HIS MOTION TO AMEND HIS 

CONDITIONS OF PRETRIAL 

RELEASE AND MOTION FOR 

EXPEDITED RELIEF 

(Expedited oral argument requested)

Defendant Michael Lacey, by and through his undersigned attorneys, hereby submits the 

instant reply in further support of his Motion to Amend his Conditions of Pretrial Release 

(“Motion”) (Doc. 503) in which Mr. Lacey seeks an order from this Court vacating the requirement 

that he wear an electronic monitoring anklet. Mr. Lacey’s Pretrial Services officer, who has 

monitored him for one year, does not oppose the Motion. 

The government opposes the Motion (see Doc. 516), claiming it was not properly brought 

before this Court because Mr. Lacey to failed allege changed circumstances. The government is 

wrong on the law and the facts. Pretrial Services has monitored Mr. Lacey for a year and does not 

oppose his Motion. Observation and supervision for over a year is new factual information and, 

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combined with other changed circumstances, demonstrates that this Motion is properly before this 

Court, even under the government’s interpretation of the law. 

The remainder of the government’s opposition focused on one issue—its belief that its case 

against Mr. Lacey is strong and its suggestion that this factor, alone, supports denial of the Motion. 

The government wants this Court to ignore Mr. Lacey’s career, contributions to this District, and

his strong personal and professional ties to this District. Further, it appears that the government 

wants this Court to ignore the most salient factor in ruling on the Motion—the fact that Mr. Lacey’s 

Pretrial Services officer, who has monitored him for a year, does not oppose the Motion. The 

government’s invitation to ignore the full range of statutory factors should be rejected. The relevant 

statute directs courts to consider: the defendant’s history and characteristics; danger to the 

community; and nature of the offense and weight of the evidence, see 18 U.S.C. § 3142(g), each of 

which weigh in favor of granting the Motion. 

I. Mr. Lacey’s Motion is properly before this Court.1 

There is no binding authority that restricts this Court’s ability to amend Mr. Lacey’s 

conditions of release absent changed circumstances.2 Indeed, the plain language of the relevant 

statute indicates that a “judicial officer may at any time amend the order to impose additional or 

different conditions of release.” 18 U.S.C. § 3142(c)(3). “[L]egislative history—no matter how 

clear—can’t override statutory text.” Hearn v. Western Conf. of Teamsters Pension Trust Fund, 68 F.3d 

 

1

 Ms. Henze Cook took no part in drafting the merits of the Motion. She signed the 

pleading because she drafted the paragraph about the interlocutory sales and contacted Mr. 

Lacey’s Pretrial Services officer about his position on the Motion. 

2

 Additionally, this Motion is not a request for a second detention hearing. Previously, when 

the parties appeared for the detention hearing, the parties informed the Court that they had reached 

an agreement on conditions of release. Instead of holding a hearing, taking evidence, and issuing an 

opinion addressing the § 3142(g) factors, the Court accepted the parties’ agreement. (See Am. Min. 

Entry, Doc. 62.) That proceeding does not qualify as a detention hearing under § 3142(f). See United 

States v. Gourley, 936 F. Supp. 412, 415 (S.D. Tex. 1996) (concluding that a preliminary hearing in 

which there was no evidence presented or issuance of a ruling on the § 3142(g) factors did not qualify 

as a hearing under § 3142(f) and pursuit of a hearing afterwards did not require presentation of 

changed circumstances). Consequently, Mr. Lacey’s instant Motion does not constitute a request to 

“reopen[]” a detention hearing under § 3142(f), meaning that Mr. Lacey was under no obligation to 

show changed circumstances. 

2

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301, 304 (9th Cir. 1995). Nor should this Court abandon the plain language of this statute based on 

unpublished decisions from other courts. (See Gov’t’s Opp’n at 3-4.) Instead, the plain text of this 

statute vests this Court with the authority to amend conditions of release “at any time.” 18 U.S.C. 

§ 3142(c)(3). 

That said, even if this Court determines that Mr. Lacey must present changed circumstances, 

he has done so. First, there has been a material development in this case—one that the government 

completely ignores: Mr. Lacey’s Pretrial Services officer does not believe that continued use 

of an electronic monitoring anklet is necessary. This recommendation is based on one year of 

monitoring Mr. Lacey, which was not available at the time Mr. Lacey agreed to the government’s 

proposed conditions of pretrial release. Second, Mr. Lacey’s health has been impacted as this case 

has progressed. He has gained weight; he experiences significantly more stress on a day-to-day basis 

than he did prior to his arrest; he was briefly hospitalized, and now takes a blood pressure 

medication, all of which was a wake-up call on the importance of maintaining good health. To do 

so, he seeks ability to swim, which his doctor recommends. (See Mot. Ex. A.) These health-related 

developments, too, were not known at the time the original conditions of release were set. Further, 

at the time these conditions were set, Mr. Lacey understood that he would be able to shower while 

wearing the anklet and, based on that fact, did not understand the anklet to preclude swimming. In 

any event, at this time, regaining the ability to swim is critical to his overall health. 

II. This Court should grant the Motion.

 A. Mr. Lacey’s personal characteristics and history (which the government 

ignored) weigh in favor of removal of the anklet. 

The government has ignored (and wants this Court to ignore) Mr. Lacey’s character, 

professional accomplishments, charitable contributions, and his strong familial ties to this District 

and the United States. As set forth in greater detail in the Motion and incorporated herein by 

reference, Mr. Lacey is seventy years old and has resided in Arizona for fifty-three years. He owns 

3

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property in this District and lives in this District with his wife, also a long-term Arizona resident. 3 

Many decades ago, Mr. Lacey began his career as a journalist in this District. He achieved great 

success, culminating in co-ownership of a nationwide newspaper conglomerate that received 

numerous awards including the Pulitzer Prize. He generously invested in this District, donating 

funds to various non-profit organizations and creating paid digital fellowships for minority 

journalists, among other philanthropic endeavors. The government has not disputed these facts. 

Nor has the government disputed Mr. Lacey’s well-documented history of litigating cases to their 

conclusion. As is consistent with his litigation history (see Mot. at 4 n.2, 7, 11), Mr. Lacey has 

mounted and will continue to mount a vigorous defense to the instant charges. 

Most importantly, the government was silent as to the fact that Mr. Lacey’s Pretrial Services 

officer does not oppose this Motion based on monitoring Mr. Lacey for one year. 

Instead of addressing these factors, the government attempts, unconvincingly, to cast Mr. 

Lacey as a liar. In an effort to cast aspersions on Mr. Lacey, the government points to sanctions 

imposed against the corporation Backpage.com, LLC in the case captioned Backpage.com, LLC v. 

Dart, CV-15-06340 after remand from the Seventh Circuit. (See Gov’t’s Opp’n at 5-6.) According 

to the government, because the corporate entity Backpage.com, LLC pleaded guilty in a criminal 

case in this District (United States v. Backpage.com, LLC, 18-CR-465, Doc. 8-001), and because the 

court in Backpage.com, LLC v. Dart, CV-15-06340 sanctioned the corporation for making statements 

in that earlier litigation that, at first blush, appear to be at odds with the guilty plea the corporation 

took in this Court, Mr. Lacey, who was not a party to that litigation, is a liar. (See id.) Notably, the 

government’s claim fails to take into account that the civil litigation in Backpage.com, LLC v. Dart, 

CV-15-06340, was commenced months after Backpage.com, LLC was sold to Carl Ferrer, its longtime Chief Executive Officer (now the government’s chief witness), that the sanctions motion was 

unopposed by Ferrer, and was based on an affidavit Ferrer had submitted to the court. Therefore, 

at the time this action began (and at the time of Backpage’s guilty plea), Mr. Lacey no longer had any 

 

3

 During the briefing on this Motion, Mr. Lacey and his wife completed a trip outside the 

continental United States, traveling to Hawaii on March 27, 2019 and returning as planned. 

4

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interest in the company and made no submissions to the court. The imposition of sanctions in a 

case to which Mr. Lacey was a stranger does nothing to impugn his character, much less his honesty 

and integrity, and to claim otherwise is misleading. 

In the government’s second attempt to cast Mr. Lacey as a liar, the government points to 

sanctions that were imposed in a civil action litigated in the State of Washington in the case captioned 

R.O. v. Medalist Holdings, Inc., No. 17-2-04897-1. Again, the details of this litigation and the sanctions 

imposed do not impugn Mr. Lacey’s honesty or integrity. In that case, the plaintiff sued several 

corporations and individuals, including Mr. Lacey. On May 18, 2018, a few weeks after Ferrer 

pleaded guilty in a criminal action in this Court (United States v. Ferrer, 18-CR-464, Doc. 7-2), the 

plaintiffs in the R.O. civil action brought a motion for sanctions. In the motion, they assail the 

deposition testimony of the general counsel for Backpage.com, LLC as well as the discovery 

responses of the corporation for being at odds with Ferrer’s guilty plea. (See Pls.’ Mot. for Sanctions, 

R.O. v. Medalist Holdings, Inc., attached hereto as Ex. A, at 5-9.) Critically, the motion indicates that 

Mr. Lacey made no substantive statements in response to the complaint or discovery demands, 

instead asserting his Fifth Amendment rights. (See id. at 8.) Consequently, Mr. Lacey’s submissions 

played no role in the court’s determination to impose sanctions based on false statements. (See Jun. 

28, 2018 Order, R.O. v. Medalist Holdings, Inc. at 7-11.) Instead, the court’s ruling was based on Mr. 

Ferrer’s guilty plea and the substantive discovery responses of the corporation. Again, this claim is 

baseless and misleading. 

Additionally, the government claims that Mr. Lacey’s creation of a foreign trust renders him 

a risk of flight. Mr. Lacey created the trust with the assistance of counsel for the benefit of his sons 

at a time when the California prosecution had been dismissed and there were no charges pending 

against him in this District. The creation of foreign trusts does not violate any law. Further, the 

government’s complaint that it has been unable to “locate[]” the trust is disingenuous. (Gov’t’s 

Opp’n at 7.) Shortly after forming the trust, Mr. Lacey declared it in a filing with the Internal 

Revenue Service (“IRS”). Subsequently, he filed a Report of Foreign Bank and Financial Accounts 

(commonly referred to as an FBAR); which identified the bank, trustee, and other information on 

5

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the trust, and included a copy of the trust. The government (through the IRS), has had documents 

declaring the existence and location of the trust since March 7, 2018. The government obtained 

documents related to the trust a second time by subpoenaing them from the attorney who assisted 

Mr. Lacey with its formation, and a third time as part of reciprocal discovery in this case. 

Consequently, it is unclear why the government is claiming to be unable to “locate[]” the trust, 

particularly because the government has subjected the trust to four different forms of pretrial 

forfeiture. (See Mot. at 11.) Mr. Lacey has not been deceptive about his formation of a lawful trust 

for his sons, formed when there were no charges pending against him, and which has been reported 

to the government several times. 

In sum, Mr. Lacey has strong familial and professional ties to this District and does not 

present a risk of flight. His pretrial services officer does not oppose the Motion. The government 

has said nothing to dispute these facts and they weigh heavily in favor of granting the Motion.

B. Risk of danger to the public (which the government failed to address) weighs 

in favor of removal of the anklet.

Although vocal in the past, the government was silent as to how discontinuation of use of 

the anklet presented a risk of danger to the public. In light of this concession, and because the 

purported harm that Mr. Lacey is alleged to have caused was related solely to operation of the 

Backpage website, which has not operated for over a year, this factor is a non-issue. 

C. Nature of the offense and weight of the evidence (the sole focus of the 

government’s opposition) does not outweigh the other factors.

The government’s brief suggests that the only factor this Court should consider is the nature 

of the offenses and purported weight of the evidence against Mr. Lacey. (See Gov’t’s Opp’n at 7-

17.) The government’s exclusive reliance on this factor is misplaced because the law requires

consideration of this factor in addition to Mr. Lacey’s personal characteristics and history, and the risk 

of danger to the public, and the Ninth Circuit has repeatedly explained that the nature of offenses 

and weight of the evidence is “the least important of the various factors.” E.g., United States v. Motamedi, 

6

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767 F.2d 1403, 1407 (9th Cir. 1986) (reversing denial of pretrial release) (emphasis added). More 

importantly, the government has overstated the weight of its purported case against Mr. Lacey.4

As set forth in greater detail in other submissions and incorporated herein by reference, the 

government’s case—which seeks to punish publishers not for their own speech but for providing a 

platform that publishes the speech of third parties—presents significant First Amendment issues. 

(See, e.g., Defs.’ Joint Reply to Resp. to Mot. to Dismiss, Doc. 507, at 8-21.) Numerous courts have 

held that the First Amendment bars the government from criminalizing Internet advertising based 

on the assumption that some of the ads may propose illegal transactions. See, e.g., Backpage v. 

McKenna, 881 F. Supp. 2d 1262, 1281-82 (W.D. Wash. 2012) (invalidating criminal statute targeting 

internet ads and recognizing Backpage as a platform for speech). Indeed, “[t]he government may 

not suppress lawful speech as a means to suppress unlawful speech. Protected speech does not 

become unprotected merely because it resembles the latter. The Constitution requires the reverse.” 

Ashcroft v. Free Speech Coalition, 535 U.S. 234, 255 (2000). Thus, speech is presumed to be protected and 

must be treated as such until the government has proved its case. See Ashcroft v. A.C.L.U., 535 U.S. 

564, 573 (2002). Under these well-settled principles, the central theme of the indictment—the 

assumption that ads for lawful adult services can be equated with ads for illegal transactions—is 

impermissible. 

Moreover, when the government seeks to hold a publisher criminally liable for the speech 

of third parties, the government must prove that the defendant-publisher knew that the specific speech

that is the basis for criminal charges was unlawful and that the defendant-publisher had the specific

intent to violate the law. See, e.g., Smith v. California, 361 U.S. 147, 153-54 (1959) (striking law imposing 

criminal sanctions on the sale of obscene books without any required scienter, because absent proof 

that a seller had knowledge, “he will tend to restrict the books he sells” and the law would “impose 

a severe limitation on the public’s access to constitutionally protected matter”). The indictment 

 

4

 Although the government’s case will be challenged in greater detail and on more extensive 

grounds in other submissions to this Court, a brief discussion of the shortcomings of the 

government’s case is provided herein. 

7

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contains no allegations that satisfy the scienter requirement for prosecution of publishers for 

publishing third-party speech. (See Joint Repl. at 17-20.) 

 Further, there is no indication in any public filing that the government can establish the 

specific intent required to obtain a conviction under the Travel Act, 18 U.S.C. § 1952, for facilitating 

prostitution.5 To establish a Travel Act violation, the government must establish that the “accused 

formed a specific intent to . . . facilitate” a violation of state law. United States v. Gibson Specialty Co., 

507 F.2d 446, 449 (9th Cir. 1974). In Gibson Specialty, a punchboard/pulltab manufacturer sold and 

shipped its products to buyers located in Montana, where it was unlawful to possess punchboards 

and pulltabs. The manufacturers were charged with facilitating the commission of games of chance 

in Montana in violation of Montana law under the Travel Act. The Court explained that, to establish 

that a manufacturer violated the Travel Act through sale of products to Montanans, “the prosecutor 

must show that the manufacturer in some significant manner associated himself with the purchaser’s 

criminal venture for the purpose of its advancement.” Id. In affirming dismissal of the Travel Act 

charges, the Court “assumed” that the defendants were aware of the Montana law and that the 

prosecutors’ construction of it was correct; however, even with those assumptions, the Court could 

not “find that the defendants by selling to Montanans intended, within the meaning of the [T]ravel 

[A]ct, to facilitate a violation of state law.” Id. at 450; accord United States v. Prince, 529 F.2d 1108, 

1112 (6th 1976) (“[T]he Travel Act only reaches those who engage in interstate activities with 

intent to perform other illegal acts. Thus there is a requirement of a separate intent related to 

the use of interstate facilities which is different from the intent required to commit the 

underlying State offense.”). 

 

5 Defendants are charged under 18 U.S.C. § 1952(a)(3)(A), which states: “Whoever 

travels in interstate or foreign commerce or uses the mail or any facility in interstate or foreign 

commerce, with intent to . . . (3) otherwise promote, manage, establish, carry on, or facilitate 

the promotion, management, establishment, or carrying on, of any unlawful activity, and 

thereafter performs or attempts to perform-- (A) an act described in paragraph (1) or (3) shall 

be fined under this title, imprisoned not more than 5 years, or both . . . .” 

8

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Under Gibson Specialty, it is not enough for the government to show that defendants 

knew that prostitution was a state crime or that defendants learned, after publication, that 

some of the website’s users had placed ads that appeared to be for lawful adult services such 

as escorting, massage, or erotic dance, but were, instead, ads for prostitutes. Gibson Specialty

mandates that the government must prove that the defendants (1) knew that a particular ad 

was an ad for prostitution; (2) published the ad with the specific intent to use the internet to

facilitate prostitution; and (3) intended to facilitate prostitution in “significant” association 

with the ad’s author (the website user). 

There is not a single allegation in the indictment that meets this standard. Instead, the 

indictment alleges that defendants were aware that: 

• the “vast” or “overwhelming” majority of the ads posted to the website were for 

prostitution (Indict. at ¶¶ 9, 34);

• government agencies and non-profits believed that ads had been posted to the 

website by prostitutes (id. at ¶¶ 74, 86, 97, 141, 144); and, 

• prosecutions for pimping or other crimes had occurred which involved ads that had 

been posted to the website (although indictment does not allege that the ads at issue

offered sex acts in exchange for money) (id. at ¶¶ 71, 76, 92). 

In its opposition, the government points to Mr. Lacey’s correspondence with public-relations 

consultants after learning that murder victims had placed ads on Backpage (among other sites) or in 

anticipation of media coverage of Backpage as “proof” he knew that Backpage facilitated 

prostitution. (Gov’t’s Opp’n at 10-11.) None of these allegations tie a specific defendant (Mr. Lacey 

or otherwise) to a specific ad pre-publication or allege that a defendant authorized publication of an 

ad for illegal conduct with the specific intent to facilitate illegal conduct via the internet or show that 

any of the defendants worked in “significant” association with the ad author (let alone that they 

knew any of the users who posted ads on the website). Instead, these allegations purport to establish 

insufficient general intent.6 

 

6 See Doe v. GTE Corp., 347 F.3d 655, 659 (7th Cir. 2003) (“Even entities that know the 

information’s content do not become liable for the sponsor’s deeds. Does a newspaper that 

carries an advertisement for ‘escort services’ or ‘massage parlors’ aid and abet . . . prostitution, 

9

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Indeed, the government has repeatedly conceded that it is proceeding on a theory of general 

intent.7

Against this backdrop, the government has trotted out arguments that have already been 

refuted in other pleadings. For example, the government criticizes Mr. Lacey for omitting discussion 

of the pleas of Carl Ferrer and Dan Hyer; however, those pleas do nothing to advance the 

government’s case. Carl Ferrer stated that he had “long been aware that the great majority of these 

advertisements are, in fact, advertisements for prostitution services.” (United States v. Ferrer, 18-CR464, Doc. 7-2 at 13.) Dan Hyer stated that he knew “that the great majority of the ads . . . were 

actually offering illegal prostitution services.” (United States v. Lacey, 18-CR-422, Doc. 271 at 10.) 

These statements suggest, at best, general knowledge and not the requisite specific intent. Moreover, 

this Court should reject the government’s invitation to accept these pleas, which have never 

been tested, as substantive evidence against Mr. Lacey.8 

The government points to two prosecutions related to the website www.redbook.com to 

claim that website operators can be held liable for third-party speech. (Govt’s’ Opp’n at 11-12.) As 

previously noted, those cases have no bearing on the First Amendment issues in this case because 

those defendants pleaded guilty, raised no First Amendment defenses, and were accused of conduct 

 

if it turns out that some (or many) of the advertisers make money from that activity? How 

about Verizon, which furnishes pagers and cell phones to drug dealers?”). 

7 See Nov. 29, 2018 Ltr. from R. Jones to M. Piccarreta, attached hereto as Ex. B at 3 

(“Backpage knew that every ad had the potential for facilitating prostitution services . . . .”); see also

Excerpts from Oct. 5, 2018 Transcript, attached hereto as Ex. C at 102 (“[W]hat’s at issue in this 

case . . . Did [defendants] know that the vast majority of these advertisements that went up on this 

Web site were for prostitution.”). Gibson Specialty makes it clear that a defendant cannot be convicted 

because an ad for legal adult services had the “potential” to be an ad for prostitution or because the 

government or its witnesses claim that “the vast majority” of the ads were for prostitution. 

8 A guilty plea of a codefendant “may not be used by the government and received over 

objection as substantive evidence of the guilt of those on trial.” United States v. Halbert, 640

F.2d 1000, 1004 (9th Cir. 1981). Further, courts should be skeptical of plea agreements 

because “plea agreement[s] may adopt facts the government wants to hear in exchange for 

some benefit.” United States v. Vera, 893 F.3d 689, 692-93 (9th Cir. 2018); see also Lee v. Illinois, 

476 U.S. 530, 541 (1986) (explaining that accomplices’ confessions and arrest statements are 

“presumptively unreliable,” “presumptively suspect,” and “less credible than ordinary 

hearsay”).

10

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vastly different from what is alleged in this case. (Joint Reply at 11-12.) Similarly, the government’s 

reliance on the U.S. Senate’s Permanent Subcommittee on Investigations report on Backpage as 

substantive proof against Mr. Lacey is misplaced. A report of a political body cannot be used as a 

proxy for a judicial finding of guilt and does not trump judicial opinions based on constitutional 

principles, particularly when the report if patently flawed. (Id. at 14-16.) 

Further, the government points to content aggregation, reciprocal link programs, and 

moderation to argue that defendants must have known that the true purpose of Backpage’s business 

model was to derive revenue from prostitution. (See Gov’t’s Opp’n at 8-9.) Setting aside that the 

government cannot assume knowledge and that this argument, too, alleges insufficient generalized 

knowledge, the government is wrong about these practices as will be discussed in greater detail in 

future submissions. Content aggregation and reciprocal links are standard marketing tools that 

publishers of classified ads have used for decades. Moderation falls under “traditional editorial 

functions,” even when terms or images are deleted and the remaining portion of the ad is published. 

(See People v. Ferrer, Case No. 16FE024013 (Sup. Ct. Sacramento Cnty. Aug. 23, 2015), slip op., 

attached hereto as Ex. D at 13-14 (“[E]ven if Backpage knew of the unlawfulness of the content of 

the ads, knowledge is insufficient to render Defendants liable. This is true regardless of whether 

Backpage even exercised its editorial discretion and deleted or blocked certain terms from ads.”).) 

CONCLUSION

Because each of the Section 3142(g) factors weighs in favor of removal of the anklet, and 

the Pretrial Services officer who has monitored Mr. Lacey for more than one year does not 

oppose the Motion, Mr. Lacey respectfully requests that this Court grant the Motion. 

RESPECTFULLY SUBMITTED this 16th day of April, 2019, 

 /s/ Paul J. Cambria, Jr. 

 LIPSITZ GREEN SCIME CAMBRIA LLP

 Attorneys for Defendant Michael Lacey

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On April 16, 2019, a PDF version

of this document was filed with

Clerk of the Court using the CM/ECF

System for filing and for Transmittal

Of a Notice of Electronic Filing to the

Following CM/ECF registrants:

Kevin Rapp, kevin.rapp@usdoj.gov 

Reginald Jones, reginald.jones4@usdoj.gov 

Peter Kozinets, peter.kozinets@usdoj.gov 

John Kucera, john.kucera@usdoj.gov 

Margaret Perlmeter, margaret.perlmeter@usdoj.gov 

Patrick Reid, Patrick.Reid@usdoj.gov 

Andrew Stone, andrew.stone@usdoj.gov 

Amanda Wick, Amanda.Wick@usdoj.gov

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Case 2:18-cr-00422-DJH Document 522 Filed 04/16/19 Page 12 of 12