Lawyers argue indicted Backpage employees sought to keep prostitution ads off the site

PHOENIX - A former executive and two operations managers for classified site Backpage.com worked vigorously to keep the platform free of ads for prostitution even as strategies on how to do so constantly shifted, their attorneys said Tuesday at a federal trial in Phoenix.

Defense lawyers for Scott Spear, Andrew Padilla and Joye Vaught had their turn to make opening statements against charges of facilitating prostitution and money laundering. They highlighted how all three made great efforts to work with authorities, whether it was by giving testimony, sharing key user information or taking calls in the middle of the night.

"Backpage was viewed in law enforcement as the most cooperative site," said Bruce Feder, the attorney for former executive vice-president Spear. "They thought they were doing good. They wanted to get abusers off their site."

Joy Bertrand described how Vaught "battled bad apples" for nine years. As the assistant operations manager, Vaught worked to keep ads that could be seen as proposing sex acts or were just "trashy" from being posted. Bertrand read from an email Vaught sent to a staff moderator in 2014 pointing out ads with several violations that had slipped through.

"She was proud of the job she had. She bragged about it," Bertrand said. "As you see each piece of the government’s evidence, please view it with skepticism."

Padilla’s attorney described how he rose from having an $11-per-hour job to becoming a full-time operations manager. At one point, he was helping oversee 200 site moderators out of an office in Dallas. But under Backpage CEO Carl Ferrer, the standards used to screen for potential prostitution ads were not clear, attorney David Eisenberg said.

"This system constantly evolved, which led to confusion at his job," Eisenberg said. "Who’s the guiding light here? Not my client."

The three are co-defendants alongside Backpage founder Michael Lacey and former chief financial officer John Brunst, whose attorneys made opening statements last month.

This is the second trial of all five on charges in what authorities say was a scheme to knowingly sell ads for sex on the classified site.

All five have pleaded not guilty to facilitating prostitution. Of the five, Lacey and two others have pleaded not guilty to money laundering charges.

The first trial ended in a mistrial in September 2021 when a judge concluded prosecutors had too many references to child sex trafficking in a case where no one faced such a charge.

Lacey founded the Phoenix New Times weekly newspaper with James Larkin, who was charged in the case and died by suicide in July. Lacey and Larkin held ownership interests in other weeklies such as The Village Voice and ultimately sold their newspapers in 2013. But they held onto Backpage, which authorities say generated $500 million in prostitution-related revenue from its inception in 2004 until 2018, when it was shut down by the government.

Michael Lacey (left) and James Larkin

The site’s marketing director has pleaded guilty to conspiring to facilitate prostitution and acknowledged he participated in a scheme to give free ads to prostitutes to win over their business. Ferrer pleaded guilty to a separate federal conspiracy case in Arizona and to state money laundering charges in California.

Prosecutors say Backpage’s operators ignored warnings to stop running prostitution ads, some involving children. They are accused of giving free ads to prostitutes and cultivating arrangements with others who worked in the sex trade to get them to post ads with the company.

Authorities say Backpage employees would aggregate more users by identifying prostitutes through Google searches, then call and offer them a free ad. The site also is accused of having a business arrangement in which it would place ads on another site that lets customers post reviews of their experiences with prostitutes.

Backpage’s operators said they never allowed ads for sex and used people and automated tools to try to delete such ads. They maintain the content on the site was protected by the First Amendment.

Prosecutors said the moderation efforts by the site were aimed at concealing the true nature of the ads.

Lacey also is accused of using cryptocurrency and wiring money to foreign bank accounts to launder revenues earned from the site’s ad sales after authorities say banks raised concerns that they were being used for illegal purposes.

The backpage.com website was seized in April, 2018. (file)

At trial, the Backpage defendants are barred from bringing up a 2013 memo by federal prosecutors who examined the site and said at the time that they hadn’t uncovered evidence of a pattern of recklessness toward minors or admissions from key participants that the site was used for prostitution.

In the memo, prosecutors had said witnesses testified Backpage made substantial efforts to prevent criminal conduct on its site and coordinated such efforts with law enforcement agencies. The document was written five years before Lacey, Larkin and the other former Backpage operators were charged in the Arizona case.

A Government Accountability Office report released in June 2021 said the FBI’s ability to identify victims and sex traffickers had decreased significantly after Backpage was seized by the government because law enforcement was familiar with the site and Backpage was generally responsive to requests for information.