Feds Seek 20-Year Sentence for Backpage Co-Founder Michael Lacey
Federal prosecutors are recommending a 20-year prison sentence for Backpage co-founder Michael Lacey, who was found guilty last fall of one count of international concealment of money laundering. It’s an insane ask for someone whose only conviction is for one nonviolent crime, especially considering the circumstances of that conviction.
Concealment?
“The context for the international concealment money laundering conviction is critical,” writes Lacey’s lawyers in a motion seeking a less severe sentence. “This is not a case where the defendant went off on his own to hide an asset. Instead, in the years that preceded the international wire transfer at issue, federal law enforcement officers
had visited his banks and suggested to those banks that it would be bad for their reputation to have him as a client, which then resulted in the banks terminating their relationship with him. This occurred when there were no charges pending.”
In other words, the federal government worked to deny Lacey access to U.S. banks and then charged him for trying to park his money somewhere.
“While visiting his long-time trusts-and-estates lawyer, John Becker, on an unrelated matter, Michael mentioned his inability to maintain banking,” Lacey’s motion explains.
In response, Becker suggested that a foreign bank might stabilize his banking, and suggested that they meet with another lawyer who specialized in offshore assets. That lawyer suggested a bank in Hungary and the creation of a trust for the benefit of his sons.
The entire transaction was papered and executed by counsel. Michael did not hide anything from his counsel, explaining to them that the funds at issue were from the sale of Backpage. As his counsel, Becker, explained at trial, he believed and still believes the transaction to be fully lawful. There was no intent to conceal, and no actual concealment, but rather, an intent to disclose and actual disclosure.
Further complicating matters is a lack of proof that Lacey knew any money from Backpage may have been derived from unlawful activity—a condition crucial for sustaining the money laundering conviction.
Double Jeopardy?
Lacey and the other Backpage defendants “made a calculated decision to pursue a livelihood built on prostitution ads, and maintained that path, year after year, supporting a succession of criminal users of their website,” prosecutors allege in their sentencing memorandum.
Lacey was charged—along with other former Backpage executives—of using Backpage to knowingly facilitate prostitution, in violation of the U.S. Travel Act.
Two of the defendants were acquitted of all such offenses and two of the defendants were found guilty of some of them. But the jury could not reach a conclusion when it came to Lacey. U.S. District Judge Diane Humetewa found there was insufficient evidence to sustain most of the remaining 84 counts against him.
Now, prosecutors want the judge to simply act, for sentencing purposes, as if those charges are all true.
Federal prosecutors are also putting Lacey on trial for these charges again—which means that if he is eventually convicted, he could wind up being sentenced twice for the same conduct.
“The conduct pertaining to the unresolved counts should not be considered because if Michael’s sentence for [the one count on which he was found guilty] is increased based on that conduct and, if there should be any convictions pertaining to that conduct at a third trial, he would be punished twice for the same conduct, in violation of the Double Jeopardy Clause,” his lawyers write.
The whole motion is worth a read to get a picture of who Michael Lacey is, including his long career in journalism and his many legal battles over free speech. It also delves into Lacey’s longstanding defense of Backpage allowing sex workers to post classified ads: that these services are not de facto illegal and Backpage was protected by the First Amendment.
Michael knew from his decades as a publisher that advocacy groups and even law
enforcement would target the publishers of unwanted speech, regardless of its protection by the First Amendment. The attention Backpage’s adult content attracted appeared to be no different. Michael was walled off from the business side of the newspaper company, but had repe
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