1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ELIZABETH A. STRANGE

First Assistant United States Attorney District of Arizona

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

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

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

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

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

Assistant U.S. Attorneys

40 N. Central Avenue, Suite 1800

Phoenix, Arizona 85004-4408

Telephone (602) 514-7500

BRIAN BENCZKOWSKI

Assistant Attorney General

Criminal Division, U.S. Department of Justice

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

Senior Trial Attorney, U.S. Department of Justice Child Exploitation and Obscenity Section 

950 Pennsylvania Ave N.W., Room 2116

Washington, D.C. 20530

Telephone (202) 616-2807 

Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America,

Plaintiff, 

v. 

Michael Lacey, et al.,

Defendants.

CR-18-422-PHX-SPL (BSB) 

UNITED STATES’ STATUS 

MEMORANDUM

[Status Conference set for

Jan. 25, 2019, 9:30 a.m.]

I. Introduction

 On April 26, 2018, the government and Defendants submitted a Joint Proposed Case 

Management Order to the Court setting forth a number of discovery and disclosure 

deadlines. CR 121. On May 2, 2018, the court adopted the proposed order with the 

exception of granting Defendants’ request to move the trial date from October 14, 2019 to 

Case 2:18-cr-00422-DJH Document 444 Filed 01/18/19 Page 1 of 8
- 2 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

January 15, 2020.1 CR 131. The United States has complied with the Scheduling Order as 

set forth below.

II. Superseding Indictment 

On July 25, 2018, a District of Arizona grand jury returned a 100-count Superseding 

Indictment charging Defendants Michael Lacey, James Larkin, Scott Spear, Jed Brunst, 

Daniel Hyer, Andrew Padilla, and Joye Vaught with conspiracy, facilitating prostitution, 

and money laundering offenses for their roles in operating the website Backpage.com. See

CR 230.2 The superseding indictment was timely returned in accordance with the 

Scheduling Order. CR 131.

III. Discovery

The government has produced to Defendants approximately 7.8 million documents, 

comprising approximately 10.6 million pages in an agreed-upon electronic, load-ready, 

industry-standard format—easily searchable by text or metadata fields (e.g. email date, 

sender, etc.). To assist Defendants in navigating these documents, the government has 

also: (1) created indexes consisting of more than 25 categories denoting the source from 

which the materials were obtained; (2) produced subsets of “hot documents”—documents 

specifically related to the allegations in the Superseding Indictment—that the government 

thinks is helpful to its case; and (3) made arrangements for a DOJ discovery specialist in 

Washington, D.C. to assist defense counsel with certain technical questions. 

For example, on May 24, 2018—nearly 20 months in advance of trial—the 

government provided Defendants with approximately 10.4 million pages of documents. 

See Exhibit A. Of those 10.4 million pages of documents, more than 2.1 million pages 

 

1 As the Court may recall the government initially requested an October 14, 2019, trial date 

and Defendants requested a date in January 2020. CR 121. The Court granted Defendants’ 

request, but none of the other deadlines were moved to correspond to the extended trial 

date. 

2 On August 17, 2018, Backpage’s former Sales and Marketing Director Daniel Hyer 

pleaded guilty to conspiracy to facilitate prostitution. See CR 270.

Case 2:18-cr-00422-DJH Document 444 Filed 01/18/19 Page 2 of 8
- 3 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

were documents Backpage had previously provided the U.S. Senate Permanent 

Subcommittee on Investigations (“PSI”) in the fall of 2016,3 as well as documents 

Backpage had previously produced to the government on September 15, 2017, as a result 

of the district court’s April 7, 2018 order and the Ninth Circuit’s mandate compelling them 

to comply with Grand Jury Subpoena No. 16-04-108. See Exhibit B. 

Additionally, more than 5.9 million pages of documents disclosed to Defendants 

originated from a source entitled “Co-Star materials.” Because of the large production of 

Co-Star materials, the government agreed to disclose to Defendants materials contained in 

this production that it believes are relevant to the case and might be utilized at trial. The 

government provided these approximately 100 pages of materials to Defendants on August 

14, 2018. See Exhibit C. 

Hence, more than 7 million of the 10.6 million documents produced to Defendants 

in discovery to date either are documents Defendants have previously produced to the 

government, or a category of materials whereby the government has provided Defendants 

with pertinent documents the government might utilize at trial. 

A. Hot Documents

In addition to providing Defendants with discovery well in advance of trial, the 

government has also produced to Defendants a subset of those documents that it believes 

is important to its case (i.e. “hot documents”). For example, on July 19, 2018, the 

government provided Defendants with more than 1,070 pages of “hot documents,” and on 

September 24, 2018, the government supplemented this production by providing 

Defendants with an additional 400 pages of “hot documents.” See Exhibits D and E. These 

nearly 1,500 pages of documents contained emails and other documentary evidence 

supporting the allegations contained in the Superseding Indictment. This includes 

materials about the Defendants’ efforts to: 1) aggregate adult content from other 

 

3 Declaration of Breena Ross, Senate Permanent Subcommittee on Investigations v. Carl 

Ferrer, Misc. No. 1:16-mc-00625-RMC (D.D.C. Nov. 30, 2016).

Case 2:18-cr-00422-DJH Document 444 Filed 01/18/19 Page 3 of 8
- 4 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

prostitution websites in order to increase content on Backpage; 2) create business 

relationships with other prostitution websites in order to increase traffic on Backpage; 3) 

remove words and/or images overtly indicative of prostitution (including the prostitution 

of children) from Backpage ads, and then posting these “moderated” ads knowing that they 

advertised prostitution services; and 4) engage in money laundering activities.

Apart from providing Defendants with “hot documents,” the government has also 

provided counsel for a number of Defendants (upon request) with subsets of the 1,500 

pages of “hot documents” specifically related to the allegations in the Superseding 

Indictment against their respective clients, and has even participated in meetings with 

counsel to discuss these materials. For example, in December 2017—nearly four months 

before the grand jury returned an indictment in this case—the government met with counsel 

for Defendant Andrew Padilla to discuss the government’s theory of the case. The 

government subsequently provided counsel with more than 100 pages of documents 

relevant to Defendant Padilla’s knowing facilitation of illegal services via Backpage. See

Exhibit F. Additionally, on August 26, 2018, the government provided counsel for 

Defendant Scott Spear with approximately 50 “hot documents” comprising hundreds of 

pages of materials specifically related to the allegations in the Superseding Indictment 

against Spear. Furthermore, on September 6, 2018, the government held an hour-long 

conference call with counsel to discuss these documents and its theory of the case. See

Exhibit G.

Moreover, on October 2-3, 2018, the government provided counsel for Defendant 

Jed Brunst with approximately 35 “hot documents” consisting of more than 100 pages of 

materials specifically related to the allegations in the Superseding Indictment against 

Brunst. The government has also offered to meet with counsel to discuss these documents 

and the government’s theory of the case in detail. See Exhibit H. Most recently, on January 

9, 2019, the government provided counsel for Defendant Joye Vaught with approximately 

25 “hot documents” consisting of more than 100 pages of materials specifically related to 

the allegations contained in the superseding indictment against Vaught. As was the case 

Case 2:18-cr-00422-DJH Document 444 Filed 01/18/19 Page 4 of 8
- 5 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

with Defendant Brunst, the government offered to meet with Vaught’s counsel to discuss 

these documents and the government’s theory of the case in detail. See Exhibit I.

As detailed above, the government has been unusually forthcoming with the 

Defendants when it comes to discovery. Not only did it provide Defendants with over ten 

million pages of discovery more than 20 months in advance of trial, the government also 

created detailed indexes to assist Defendants in navigating these documents, produced a 

subset of “hot documents” to all Defendants, and even produced additional subsets of “hot 

documents” for individual Defendants upon request.

B. Backpage Server Data

The government has identified a number of servers that are associated with 

Backpage. These include the following: 4

- 32 servers and three hard drives located in Tucson, Arizona, from Desert Net, 

which is an Internet service provider;

- 5 servers from Dallas, Texas—one from Backpage’s headquarters and four other 

servers from a data center; and

- 40 servers from a datacenter in Amsterdam.

See Exhibit J.

Currently, the government is in possession of all 32 servers from Desert Net, all five 

servers from Dallas, and nine of the 40 servers in Amsterdam.5

 The government is 

currently in the process of imaging the servers in its possession. This is a time consuming 

task, but the government has already completed the imaging of at least eight servers. The 

information contained on these servers includes: images uploaded to Backpage; 

 

4 This information was provided to Defendants in a letter dated December 10, 2018, which 

is attached as Exhibit J.

5 Desert Net administrators have informed the government that the 31 servers remaining in 

Amsterdam do not contain pertinent data, but were utilized for frontend websites associated 

with Backpage. That said, the government is working to obtain the remaining 31 servers through a request to the Netherlands pursuant to the Mutual Legal Assistance Treaty and 

will inform Defendants if and when this occurs.

Case 2:18-cr-00422-DJH Document 444 Filed 01/18/19 Page 5 of 8
- 6 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

marketplace databases with advertisements that were posted to Backpage; and payment 

processing. The advertising data contains a myriad of ad postings that are typical of the 

ads referenced in the U.S. Senate PSI report, the Superseding Indictment, and discovery. 

In addition, much of the information is duplicative. The government understands that many 

of these servers were used primarily for backing-up the company’s information, including 

all 32 servers that were maintained by Desert Net. Despite the likely lack of utility for 

Defendants, the government is working to provide the Defendants with verified imaged

copies of the information contained on the servers currently in the government’s 

possession.

6

 Ex. J. 

IV. Initial Expert Disclosures

On December 14, 2018, the government filed its notice of expert witnesses. The 

notice provided Defendants with an initial overview of the individuals and subjects the 

government may seek to present evidence of by way of expert testimony. See CR 422.

V. Pending Motions

The parties await the Court’s ruling on the following motions: (1) the United States’ 

Motion to Compel Destruction of Inadvertently Disclosed documents (CR 352); (2) the 

United States’ Motion for Clarification re: Order to Resolve Attorney-Client Privilege (CR

355); (3) Defendant Lacey’s Motion for Release of Funds Unrelated to Backpage and 

Request for Expedited Relief (CR 385); and (4) Defendant Lacey’s Motion to Strike (CR 

415). 

VI. Upcoming Deadlines

On February 25, 2019 (nearly eleven months before trial), the government intends 

 

6 There are a few other categories of documents that may be subject to disclosure in this 

case. These include, among others, documents the government has received from 

Defendants’ personal electronic devices and a third party IT company, along with 

Defendants’ personal and corporate taxes. For several of these categories of documents, it is likely that the government will need its filter team to conduct an initial review to 

determine whether the attorney-client privilege applies. The government has not yet started 

this process because of Defendants’ objections to the filter team, which the parties have 

discussed in detail in their briefing on the government’s motion for clarification (CR 355).

Case 2:18-cr-00422-DJH Document 444 Filed 01/18/19 Page 6 of 8
- 7 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

to provide Defendants with statements (Jencks Act material) of witnesses whom the 

government intends to call at trial. CR 131. The government will provide an index for all 

Jencks Act statements for Defendants’ ease of use. In addition, on April 1, 2019, the 

government will provide a preliminary witness and exhibit list to Defendants. (Id.)

Respectfully submitted this 18th day of January, 2019.

BRIAN BENCZKOWSKI

Assistant Attorney General

Criminal Division, U.S. Department of Justice

s/ Reginald E. Jones

REGINALD E. JONES

Senior Trial Attorney U.S. Department of Justice, Criminal Division

Child Exploitation and Obscenity Section

ELIZABETH A. STRANGE

First Assistant United States Attorney

District of Arizona

KEVIN M. RAPP

MARGARET PERLMETER

PETER S. KOZINETS

ANDREW C. STONE

JOHN J. KUCERA

Assistant U.S. Attorneys

Case 2:18-cr-00422-DJH Document 444 Filed 01/18/19 Page 7 of 8
- 8 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CERTIFICATE OF SERVICE

I hereby certify that on this date, January 18, 2019, I transmitted the foregoing under-seal document for filing to the Clerk of the United States District Court and sent a 

copy via electronic mail to: Paul J. Cambria Jr. Esq. and Erin e. McCambpell, Esq., Lipsitz 

Green Scime Cambria, LLC, 42 Deleware Ave, Suite 120, Buffalo, NY 14202, 

pcambria@lglaw.com and emccampbell@lglaw.com, Thomas H. Bienert, Jr., Esq., Anthony R. Bisconti, Esq., Kenneth M. Miller, Esq., and Whitney Bernstein, Esq., Bienart, 

Miller & Katzman, PLC, 903 Calle Amanecer, Suite 350, San Clemente, CA 92673, 

tbienert@bmkattorneys.com, tbisconti@bmkattorneys.com, kmiller@bmkattorneys.com, wbernstein@bmkattorneys.com; Mike Piccarreta, Esq., Piccarreta Davis Keenan Fidel, PC, 2 East Congress Street, Suite 1000, Tucson, AZ 85701, 

mlp@pd-law.com; Jim Grant Esq., Davis Wright Termaine, LLP, 1201 Third Avenue, Suite 2200, Seattle, WA 98101, jimgrant@dwt.com; Michael D. Kimerer, Esq. and Rhonda Elaine Neff, Esq., 1313 E. Osborn Road, Suite 100, Phoenix, AZ 85014, 

MDK@kimerer.com and rneff@kimerer.com; Steve Weiss Esq., Karp & Weiss, PC, 3060 North Swan Rd., Tucson, AZ 85712, sweiss@karpweiss.com; Robert Corn-Revere 

Esq., Davis Wright Termaine, LLP, 1919 Pennsylvania Avenue N.W., Suite 800, 

Washington, D.C., 20006, bobcornrevere@dwt.com; Bruce Feder, Esq., 2930 East 

Camelback Road, Suite 160, Phoenix, AZ 85016, bf@federlawpa.com; Gary Linenberg, Esq., Ariel Neuman, Esq., Gopi K. Panchapakesan, Esq., Bird, Marella, Boxer, Wolpert, 

Nessim, Drooks, Lincenberg & Rhow, P.C., 1875 Century Park East, 23rd Floor, Los 

Angeles, CA 90067, glincenberg@birdmarella.com, aan@birdmarella.com, gkp@birdmarella.com.

s/ Angela Schuetta Angela Schuetta

U.S. Attorney’s Office

Case 2:18-cr-00422-DJH Document 444 Filed 01/18/19 Page 8 of 8