- Michael Lacey, whom prosecutors called the mastermind behind the operation, will wear an electronic monitoring bracelet while on bail
- Several Backpage.com employees were charged in a 93-count indictment unsealed on Monday that accused them of knowingly facilitating prostitution
- Prosecutors have accused the website of generating $500 million in prostitution-related revenue since launching in 2004
- The unsealed indictment, returned by a federal grand jury in Arizona, lays out details concerning 17 alleged victims, including both adults and minors
- Lacey's release came a day after the website's chief executive, Carl Ferrer, 57, entered guilty pleas to conspiracy and money-laundering charges
Backpage.com's co-founder was released on Friday on a $1 million bond secured by real estate in Phoenix after pleading not guilty to state and federal charges stemming from a broad investigation of the sex ad website.
Michael Lacey, whom prosecutors called the mastermind behind the operation, will also wear an electronic monitoring bracelet and disclose all his foreign and domestic financial assets, Magistrate Judge Bridget Bade at the U.S. District Court in Arizona ordered.
Lacey, 69, wore black-and-white jail stripes and stood calmly before the judge answering questions about the terms of his conditions.
Seven people employed by Backpage.com, including its two founders Michael Lacey (top) and James Larkin (bottom), were indicted on federal charges in what authorities say was a scheme to knowingly facilitate prostitution by running ads for sexual services
In October 2016, the CEO of backpage.com, Carl Ferrer, was arrested in Houston on felony pimping charges after arriving back to the US from Amsterdam. Those charges were later dropped
'I am pleased he is going to be released, so he can set about defending his case,' Lacey's attorney Janey Cook said in an interview after the hearing.
Several Backpage.com employees were charged in a 93-count indictment unsealed on Monday that accused them of knowingly facilitating prostitution. Lacey personally faces 79 criminal counts.
'For far too long, Backpage.com existed as the dominant marketplace for illicit commercial sex, a place where sex traffickers frequently advertised children and adults alike,' Attorney General Jeff Sessions said in a statement earlier this week. 'But this illegality stops right now.'
Prosecutors have accused the website of generating $500 million in prostitution-related revenue since launching in 2004, in addition to money-laundering by routing funds through seemingly unrelated entities, using foreign accounts and converting it into and out of cryptocurrencies.
Backpage.com was used primarily to sell sex and was the second-largest classified ad service in the United States after Craigslist.
The unsealed indictment, returned by a federal grand jury in Arizona, lays out details concerning 17 alleged victims, including both adults and minors as young as 14 years old, who were trafficked on the site.
Lacey's release came a day after the website's chief executive, Carl Ferrer, 57, entered guilty pleas to conspiracy and money-laundering charges in both Sacramento County Superior Court and U.S. District Court in Arizona under agreements with state and federal prosecutors that call for him to serve five years in prison.
The indictment alleges that Backpage.com on some occasions had helped customers edit their ads so they would stay within legal limits while still encouraging commercial sex. Backpage.com CEO Carl Ferrer, left, along with former co-owners Michael Lacey (M) and James Larkin (R), in Sacramento Superior Court on October 12, 2016
As part of his agreements with the U.S. Department of Justice and with prosecutors from California and Texas, Ferrer agreed to cooperate in the criminal case against Backpage.com co-founders Lacey and James Larkin, who also pleaded not guilty and has a detention hearing scheduled on Monday.
Also charged in the indictment were Backpage.com Executive Vice President Scott Spear, Chief Financial Officer John 'Jed' Brunst, Sales and Marketing Director Dan Hyer, Operations Manager Andrew Padilla and Assistant Operations Manager Joye Vaught.
Last month, Congress passed legislation that makes it easier for state prosecutors and sex-trafficking victims to sue website operators that facilitate online sex trafficking.
The bill, which President Donald Trump is expected to sign into law this week, amends the Communications Decency Act, which largely shielded website operators from state criminal charges or civil liability if they were facilitating sex ads or prostitution.
Efforts to get that law changed were featured prominently in a Netflix documentary called 'I am Jane Doe.'
In the indictment, the US Justice Department accuses Backpage of earning $500million in prostitution-related revenue since its inception in 2004, and of money laundering that entailed routing funds through seemingly unrelated entities, wiring money in and out of foreign accounts and converting it into and out of bitcoin and other cryptocurrencies. Pictured are Larkin, Lacey and Ferrer in court in 2017