Backpage founder Lacey sentenced to prison. Sentenced to five years in prison and fined $3 million for money laundering and other crimes

On August 28, 2024, Michael Lacey, the founder of the lucrative classified advertising website “Backpage,” was sentenced to five years in prison and fined $3 million for money laundering charges. This extensive case involves a years-long scheme to promote prostitution and profit from it through classified ads.

Last year, a jury convicted the 76-year-old Lacey of one count of international concealment money laundering. The other 84 counts of promoting prostitution and money laundering charges ended in a deadlock. Although dozens of charges were later declared not guilty due to insufficient evidence, Lacey still faces about 30 related charges. It is reported that from its establishment in 2004 until it was shut down by the government in 2018, “Backpage” earned $500 million from prostitution-related businesses. Lacey's lawyer said he was focused on running an alternative newspaper chain and was not involved in the daily operations of “Backpage,” but the judge pointed out that Lacey knew about the accusations but did nothing.

Two other “Backpage” executives, Chief Financial Officer John Brunst and Executive Vice President Scott Spear, were also sentenced to ten years in prison on Wednesday. The judge ordered Lacey and the two executives to report to the U.S. Marshals Service within two weeks to begin serving their sentences.

Prosecutors said the three defendants were driven by greed, promoted prostitution under the guise of a legitimate classified advertising business, and misled anti-human trafficking organizations and law enforcement officials. Yvonne Ambrose's daughter was sold on the “Backpage” website and then killed. Ambrose recounted the pain caused by her daughter's death. After banks raised concerns, Lacey used cryptocurrency and wired money to foreign bank accounts to launder money. “Backpage” employees were also accused of behaviors such as identifying prostitutes through Google searches and providing free ads.

In the same trial, two other “Backpage” employees were acquitted. During the trial, the defendants were prohibited from mentioning the 2013 memorandum of federal prosecutors. A June report by the U.S. Government Accountability Office pointed out that after the government seized “Backpage,” the FBI's ability to identify victims and sex traffickers significantly decreased.