throbber
Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 1 of 62
`
`C.A. No. 22-10000
`D. Ct. No. CR-18-00422-PHX-DJH
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`
`
`UNITED STATES OF AMERICA,
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`v.
`
`Plaintiff-Appellee,
`
`MICHAEL LACEY, ET AL.,
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Defendants-Appellants.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`ON INTERLOCUTORY APPEAL FROM AN ORDER OF THE
`UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA
`
`------------------------------------------------------------
`BRIEF OF APPELLEE
`------------------------------------------------------------
`
`
`
`
`
`
`PETER S. KOZINETS
`
`
`GARY M. RESTAINO
`Assistant U.S. Attorney
`
`
`United States Attorney
`Two Renaissance Square
`
`
`District of Arizona
`40 N. Central Avenue, Suite 1800
`
`
`
`
`
`
`Phoenix, Arizona 85004-4449
`
`KRISSA M. LANHAM
`Telephone: (602) 514-7500
`
`Appellate Division Chief
`Attorneys for Appellee
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Date Submitted via ECF: April 14, 2022
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 2 of 62
`
`
`
`I. TABLE OF CONTENTS
`
`Page
`I. 
`Table of Contents ............................................................................................. i 
`Table of Authorities ........................................................................................ ii 
`II. 
`Introduction and Summary of Argument ........................................................ 1 
`III. 
`IV.  Statement of Jurisdiction 
`A.  District Court Jurisdiction ..................................................................... 4 
`B. 
`Appellate Court Jurisdiction .................................................................. 4 
`C. 
`Timeliness of Appeal ............................................................................ 5 
`D. 
`Bail Status .............................................................................................. 5 
`Issues Presented ............................................................................................... 6 
`V. 
`VI.  Statement of the Case 
`A.  Nature of the Case; Course of Proceedings ........................................... 7 
`B. 
`Statement of Facts ................................................................................. 8 
`VII.  Arguments 
`  Defendants Cannot Make the Extraordinary Showing Required
`to Bar Retrial Under Oregon v. Kennedy. ........................................... 33 
`The District Court Properly Exercised Its Discretion to Decide
`the Motion Without an Evidentiary Hearing. ...................................... 49 
`VIII.  Conclusion ..................................................................................................... 54 
`IX.  Statement of Related Cases ........................................................................... 55 
`X. 
`Certificate of Comliance ................................................................................ 56 
`XI.  Certificate of Service ..................................................................................... 57
`
`
`

`
`
`
`i
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 3 of 62
`
`
`
`II. TABLE OF AUTHORITIES
`
` PAGE(S)
`
`CASES
`Abney v. United States,
`431 U.S. 651 (1977) ............................................................................................ 4
`Anderson v. City of Bessemer City, N.C.,
`470 U.S. 564 (1985) .................................................................................... 33, 53
`Barker v. Wingo,
`407 U.S. 514 (1972) .......................................................................................... 48
`Cobbledick v. United States,
`309 U.S. 323 (1940) .......................................................................................... 47
`Currier v. Virginia,
`138 S. Ct. 2144 (2018) ....................................................................................... 33
`Flanagan v. United States,
`465 U.S. 259 (1984) .......................................................................................... 47
`Green v. Hall,
`8 F.3d 695 (9th Cir. 1993) ................................................................................. 53
`J.S. v. Village Voice Media Holdings, Inc.,
`359 P.3d 714 (Wash. 2015) ......................................................................... 20, 23
`Morissette v. United States,
`342 U.S. 246 (1952) .......................................................................................... 46
`Oregon v. Kennedy,
`456 U.S. 667 (1982) .................................................................................. passim
`Takahashi v. United States,
`143 F.2d 118 (9th Cir. 1944) ............................................................................. 46
`United States v. Curtis,
`683 F.2d 769 (3rd Cir. 1982) ............................................................................. 40
`United States v. Fowlkes,
`804 F.3d 954 (9th Cir. 2015) ............................................................................. 35
`United States v. Garner,
`632 F.2d 758 (9th Cir. 1980) ............................................................................... 4
`
`
`
`ii
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 4 of 62
`
`
`
` PAGE(S)
`
`CASES (Continued)
`United States v. Hagege,
`437 F.3d 943 (9th Cir. 2006) ....................................................................... 49-50
`United States v. Hale,
`448 F.3d 971 (7th Cir. 2006) ............................................................................. 43
`United States v. Henderson,
`241 F.3d 638 (9th Cir. 2000) ............................................................................. 38
`United States v. Hoang,
`486 F.3d 1156 (9th Cir. 2007) ........................................................................... 51
`United States v. Howell,
`231 F.3d 615 (9th Cir. 2000) ............................................................................. 51
`United States v. Lacey,
`423 F. Supp. 3d 748 (D. Ariz. 2019) ........................................................... 14, 46
`United States v. Lewis,
`368 F.3d 1102 (9th Cir. 2004) ....................................................................... 4, 32
`United States v. Lopez-Avila,
`678 F.3d 955 (9th Cir. 2012) ..................................................................... passim
`United States v. Lun,
`944 F.2d 642 (9th Cir. 1991) ........................................................... 35-36, 40, 47
`United States v. Martin,
`561 F.2d 135 (8th Cir. 1977) ............................................................................. 48
`United States v. McCarty,
`648 F.3d 820 (9th Cir. 2011) ............................................................................. 33
`United States v. McKoy,
`78 F.3d 446 (9th Cir. 1996) ............................................................................... 35
`United States v. Padua,
`2021 WL 5860653 (W.D.N.Y. Dec. 9, 2021) ................................................... 48
`United States v. Rodriguez,
`229 F. App’x 547 ............................................................................................... 51
`
`
`
`
`
`
`iii
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 5 of 62
`
`
`
` PAGE(S)
`
`CASES (Continued)
`United States v. Singleterry,
`683 F.2d 122 (5th Cir. 1982) ............................................................................. 48
`United States v. Sterba,
`22 F. Supp. 2d 1333 (M.D. Fla. 1998) .............................................................. 48
`United States v. Walter-Eze,
`869 F.3d 891 (9th Cir. 2017) ............................................................................. 33
`United States v. Zone,
`403 F.3d 1101 (9th Cir. 2005) ........................................................................... 51
`
`STATUTES
`18 U.S.C. § 371 ........................................................................................................ 7
`18 U.S.C. § 1952 ...................................................................................................... 7
`18 U.S.C. § 1956 ...................................................................................................... 7
`18 U.S.C. § 1957 ...................................................................................................... 7
`18 U.S.C. § 3231 ...................................................................................................... 4
`18 U.S.C. § 3771(a)(7) ........................................................................................... 47
`
`RULES
`Fed. R. App. P. 4(b)(1)(A) ....................................................................................... 5
`
`MISCELLANEOUS
`U.S. Senate Permanent Subcommittee on Investigations’ January 2017 report,
`BACKPAGE.COM’S KNOWING FACILITATION OF ONLINE SEX TRAFFICKING, available
`at
`https://www.hsgac.senate.gov/imo/media/doc/Backpage%20Report%202017.01.10
`%20FINAL.pdf and https://www.courthousenews.com/wp-
`content/uploads/2017/02/Backpage-Report.pdf ................................................ 8, 11
`
`
`
`
`iv
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 6 of 62
`
`
`
`
`
`III.
`
`INTRODUCTION AND SUMMARY OF ARGUMENT
`
`This interlocutory appeal presents a narrow question: Did the district court
`
`clearly err by finding the United States did not intend to cause the mistrial below?
`
`In Oregon v. Kennedy, 456 U.S. 667, 676 (1982), the Supreme Court held that
`
`where—as here—Defendants obtain a mistrial on their own motion, only intentional
`
`prosecutorial misconduct aimed at sabotaging the trial warrants dismissal on double
`
`jeopardy grounds. “The only relevant intent is intent to terminate the trial, not intent
`
`to prevail at this trial by impermissible means.” United States v. Lopez-Avila, 678
`
`F.3d 955, 962 (9th Cir. 2012). This standard “is rarely met,” id.; neither the Supreme
`
`Court nor this Court has ever applied it to bar retrial. Here, Judge Diane J. Humetewa
`
`found no evidence of government intent to cause a mistrial and denied Defendants’
`
`Kennedy motion. (1-ER-3–19.) For several reasons, Defendants cannot demonstrate
`
`that the court’s findings were clearly erroneous—and its decision should be
`
`affirmed.
`
`First, the district court found that the government did not engage in intentional
`
`misconduct—and that finding alone is fatal to Defendants’ claim. The mistrial was
`
`based mainly on concerns about the “cumulative effect” of references to child sex
`
`trafficking. The trial judge ruled pretrial that this topic could be discussed; twice
`
`determined the government’s opening statement did not “cross the line” on this
`
`issue; and overruled most of Defendants’ objections when witnesses touched on the
`
`
`
`1
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 7 of 62
`
`
`
`subject. Moreover, when granting the mistrial, the trial judge expressly found: “I
`
`don’t see any of these [reasons for the mistrial] as intentional misconduct.” (23-ER-
`
`4815.) Judge Humetewa, to whom the case was later reassigned, independently
`
`examined the record, considered the parties’ briefs, heard oral argument, directly
`
`questioned the prosecutors, and made the same factual finding. On this record, Judge
`
`Humetewa’s finding of no intentional misconduct was not clearly erroneous.
`
`Second, both the trial judge and Judge Humetewa correctly rejected the
`
`notion—central to Defendants’ appeal—that the government’s case was “faltering.”
`
`When Defendants made that argument in connection with moving for a mistrial, the
`
`trial judge rejected it as “way too early.” (23-ER-4784–85.) Judge Humetewa
`
`adopted the same analysis and recognized additional record-based reasons for
`
`finding the United States had no cause to sink the trial. (1-ER-10.) These findings
`
`are accorded great deference on appeal. See, e.g., Lopez-Avila, 678 F.3d at 959-62
`
`(affirming denial of motion to dismiss where district court found no evidence of a
`
`“strategy decision . . . to abort the trial”). Defendants’ contrary attempts to draw a
`
`causal connection between the government’s case and any alleged intent to sabotage
`
`the trial are not supported by the record—and do not establish clear error.
`
`Third, the United States faced severe prejudice from a mistrial, including
`
`substantial costs and delays, and it opposed Defendants’ mistrial motions at every
`
`turn. On this record, the court’s findings were correct and far from clearly erroneous.
`
`
`
`2
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 8 of 62
`
`
`
`Nor was the district court required to hold an evidentiary hearing. Rather,
`
`district courts have broad discretion in deciding whether to hold evidentiary
`
`hearings, and the court properly exercised its discretion here. In addition to
`
`examining the voluminous record and hearing argument, the court probed the
`
`prosecutors who examined the two witnesses identified in the mistrial order and
`
`elicited their on-the-record explanations. Defendants never articulated why the court
`
`should have required the prosecutors to make their avowals to the court at an
`
`evidentiary hearing rather than a motions hearing. The district court did not abuse
`
`its broad discretion.
`
`
`
`Defendants’ Brief far exceeds the narrow scope of this appeal and seemingly
`
`tries to relitigate a waterfront of other issues. But in this limited-jurisdiction
`
`interlocutory appeal, the only order properly before this Court is Judge Humetewa’s
`
`December 29, 2021 order denying the double jeopardy claim. Defendants cannot
`
`establish that the factual findings underlying that order were clearly erroneous. The
`
`Court should affirm.
`
`
`
`
`
`
`
`3
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 9 of 62
`
`
`
`IV. STATEMENT OF JURISDICTION
`A. District Court Jurisdiction
`
`
`
`The district court has subject matter jurisdiction under 18 U.S.C. § 3231
`
`because Defendants are charged with federal crimes. (2-ER-95–186.)1
`
`B. Appellate Court Jurisdiction
`
`The Court has interlocutory appellate jurisdiction, at most, only over
`
`Defendants’ appeal from the district court’s denial of their double-jeopardy claim.
`
`Abney v. United States, 431 U.S. 651, 662-63 (1977). The Court has no interlocutory
`
`jurisdiction over the district court’s denial of any other claims addressed in its
`
`December 29, 2021 order (1-ER-3–19). See, e.g., United States v. Garner, 632 F.2d
`
`758, 762 n.2 (9th Cir. 1980) (Abney “expressly precluded the possibility of a court
`
`of appeals exercising pendent appellate jurisdiction” in interlocutory double-
`
`jeopardy cases); United States v. Lewis, 368 F.3d 1102, 1107 (9th Cir. 2004) (no
`
`interlocutory jurisdiction over alleged Brady violations); DktEntry 2 at 11-12.
`
`
`1 CR refers to the Clerk’s Record, followed by the document number(s). ER refers
`to the Excerpts of Record, and SER refers to the Supplemental Excerpts of Record.
`Citations to the ER or SER and will be preceded by the volume number, when
`applicable, and followed by the relevant page number(s).
`4
`
`
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 10 of 62
`
`
`
`C. Timeliness of Appeal
`
`The district court denied Defendants’ double-jeopardy claim on December 29,
`
`2021. (1-ER-3.) Defendants timely appealed on January 3, 2022. (23-ER-4820–24.)
`
`See Fed. R. App. P. 4(b)(1)(A).
`
`D. Bail Status
`
`Defendants are out of custody.
`
`
`
`5
`
`
`
`
`
`
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 11 of 62
`
`
`
`V.
`
`ISSUES PRESENTED
`
`A. Whether the district court’s factual finding that the prosecutors did not intend
`
`to cause the mistrial was clearly erroneous, where: (1) the United States opposed
`
`Defendants’ mistrial requests; (2) after examining the record, hearing argument, and
`
`questioning the prosecutors, the court found no evidence of intentional misconduct;
`
`(3) the court determined that the United States had no cause to abort trial, and
`
`Defendants’ contrary assertions lack record support; and (4) the United States faced
`
`substantial prejudice from a mistrial.
`
`B. Whether the district court properly exercised its broad discretion in declining
`
`to conduct an evidentiary hearing, where: (1) the court had an ample record on which
`
`to base its double jeopardy decision, including more than 1,800 pages of briefs,
`
`supplements and exhibits; and (2) the court queried the prosecutors and assessed
`
`there was no strategic reason to abandon the trial.
`
`
`
`
`
`
`
`6
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 12 of 62
`
`
`
`VI. STATEMENT OF THE CASE
`A. Nature of the Case; Course of Proceedings
`
`
`
`On July 25, 2018, the grand jury returned a 100-count Superseding Indictment
`
`(SI, 2-ER-95–186) charging Michael Lacey, James Larkin, John Brunst, Scott Spear,
`
`Andrew Padilla and Joye Vaught (Defendants) with conspiracy to violate the Travel
`
`Act/facilitate prostitution, in violation of 18 U.S.C. § 371 (Count 1), and with fifty
`
`specific violations of the Travel Act, 18 U.S.C. § 1952 (Counts 2-51). The SI also
`
`charged various Defendants with money laundering under 18 U.S.C. §§ 1956 and
`
`1957 (Counts 52-100). On September 14, 2021, after just two days of testimony at a
`
`jury trial scheduled to span three months, the district court declared a mistrial. (23-
`
`ER-4811–15.) The court set a new trial for February 9, 2022. (1-SER-290.)
`
`
`
`On December 29, 2021, the district court denied Defendants’ double-jeopardy
`
`motion to dismiss. (1-ER-3–19.) Defendants timely appealed. (23-ER-4820–24.)
`
`The court then vacated the February 9, 2022 trial, to be reset following resolution of
`
`this appeal. (CR 1449.) This Court expedited briefing and ordered that the matter be
`
`placed on the next available calendar upon completion of briefing. (DktEntry 9.)
`
`
`
`7
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 13 of 62
`
`
`
`B.
`
`Statement of Facts
`
`Overview of Backpage
`
`1.
`
`Backpage was, until shut down in April 2018, notorious for being the
`
`
`
`internet’s leading source of prostitution advertisements. (2-ER-96.) Backpage
`
`derived the overwhelming majority of its revenue from such ads and earned over a
`
`half-billion dollars in prostitution-related revenue during its 14 years of existence.
`
`(See 2-ER-96, 99, 103, 138; SR 44.)2
`
`
`
`Lacey and Larkin co-founded Backpage in 2004 with Carl Ferrer. (2-ER-96,
`
`100–01.) Lacey and Larkin oversaw Backpage’s policies and strategic direction
`
`from 2004-15. (2-ER-96.) Spear served as Executive Vice President of a parent
`
`company. (2-ER-96.) Brunst served as Chief Financial Officer of Backpage. (2-ER-
`
`96.) Padilla and Vaught served as Backpage’s Operations Manager and Assistant
`
`Operations Manager, respectively. (2-ER-96–97.)
`
`
`
`When Craigslist closed its “adult” section in 2010 after learning many ads in
`
`that section were for prostitution, Backpage quickly moved to capture Craigslist’s
`
`
`2 SR or Senate Report refers to the Senate Permanent Subcommittee on
`Investigations’ January 2017 report, BACKPAGE.COM’S KNOWING FACILITATION OF
`ONLINE SEX TRAFFICKING, available at
`https://www.hsgac.senate.gov/imo/media/doc/Backpage%20Report%202017.01.10
`%20FINAL.pdf
`and
`https://www.courthousenews.com/wp-
`content/uploads/2017/02/Backpage-Report.pdf
`8
`
`
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 14 of 62
`
`
`
`share of this market. (2-ER-101.) Backpage’s profits then skyrocketed to over $26
`
`million in 2010, $52 million in 2011, and $78 million in 2012. (2-ER-101.)
`
`
`
`Backpage became so profitable that in 2012 its owners spun off their
`
`conglomerate of alternative weekly publications to focus on Backpage. (2-ER-102.)
`
`Backpage’s profits climbed from over $112 million in 2013 to $134 million in 2014.
`
`(2-ER-102.)
`
`
`
`In April 2015, Lacey, Larkin, Spear and Brunst purported to sell Backpage for
`
`around $600 million to entities controlled by Ferrer, who simply “borrowed” most
`
`of the purchase price from the sellers. (2-ER-102.) Post-sale, the sellers retained
`
`significant operational control over Backpage, and Lacey and Larkin continued
`
`receiving tens of millions of dollars in Backpage distributions. (2-ER-102–03.)
`
`
`
`Defendants knew the vast majority of “adult” ads on their website were
`
`actually ads for prostitution, and they oversaw or executed several prostitution
`
`marketing strategies to intentionally facilitate that illegal activity. (2-ER-103.) First,
`
`Backpage’s employees systematically identified prostitutes on rival websites and
`
`created free Backpage ads for them to secure their business. (2-ER-97, 104–05.)
`
`Larkin, Spear, Ferrer, and others executed or monitored these “aggregation” efforts
`
`in several U.S. cities. (2-ER-104–05; 1-SER-115–17.)
`
`
`
`Second, Backpage’s management oversaw the company’s pursuit of business
`
`arrangements with known prostitution services to increase its volume of prostitution
`
`
`
`9
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 15 of 62
`
`
`
`advertising. (2-ER-97, 103.) For example, Backpage had a reciprocal link agreement
`
`with The Erotic Review, a site where “Johns” posted reviews of prostitutes they
`
`purchased on Backpage, including descriptions of prices and specific sex acts. (2-
`
`ER-97.) Backpage paid The Erotic Review, which became a leading source of
`
`referrals. (See 2-ER-97, 105–08.) Backpage formed “affiliate” relationships with
`
`other prostitution industry organizations and individuals, including bulk advertisers
`
`like “Dollar Bill” to whom Backpage offered fees or commissions. (2-ER-108–110.)
`
`
`
`Third, Backpage helped pimps and prostitutes avoid detection by law
`
`enforcement, most notably by utilizing “moderation” measures to remove terms and
`
`pictures particularly indicative of prostitution—and then publishing a revised
`
`version of the ad without blocking the ad itself. (2-ER-97–98) This editing did not
`
`change the purpose of the ad (soliciting prostitution)—it only created a veneer of
`
`deniability for Backpage and its customers. (2-ER-98, 110–31.) Ferrer and other
`
`Backpage employees also advised known prostitution advertisers like Dollar Bill,
`
`“Licks A Lot,” and “P.R.” on how to revise ads so that they could be featured on
`
`Backpage. (See, e.g., 2-ER-108–110, 114, 124–25, 134, 136–37.)
`
`
`
`As Defendants successfully pursued these prostitution marketing strategies,
`
`they faced withering criticism from law enforcement, the National Center for
`
`Missing and Exploited Children (NCMEC) and other anti-trafficking organizations,
`
`the U.S. Senate, and others who concluded—and notified Defendants—that the vast
`
`
`
`10
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 16 of 62
`
`
`
`majority of Backpage’s “adult” ads were for prostitution; these notifications
`
`mirrored Defendants’ internal admissions. (2-ER-95–186, passim.)
`
`
`
`For example, after lengthy investigation, in January 2017 the U.S. Senate
`
`Subcommittee on Permanent
`
`Investigations
`
`issued a 50-page
`
`report,
`
`BACKPAGE.COM’S KNOWING FACILITATION OF ONLINE SEX TRAFFICKING. The report
`
`found that virtually all of Backpage’s “adult” ads were prostitution solicitations and
`
`“Backpage has maintained a practice of altering ads before publication by deleting
`
`words, phrases, and images indicative of criminality, including child sex trafficking
`
`. . . . Those practices served to sanitize the content of innumerable advertisements
`
`for illegal transactions—even as Backpage represented to the public and the courts
`
`that it merely hosted content others had created.” (2-ER-131.) One former Backpage
`
`moderator testified that all the moderators knew the ads they reviewed offered sex
`
`for money; another testified “everyone” knew Backpage’s adult ads were for
`
`prostitution and “[a]nyone who says [they] w[ere]n’t, that’s bullshit.” (SR 36–37.)
`
`
`
`
`
`2.
`
`The Superseding Indictment
`
`Count 1 of the SI charges Defendants with a 14-year conspiracy to violate the
`
`Travel Act by facilitating prostitution. (2-ER-143.) Counts 2-51 charge substantive
`
`Travel Act violations and identify 50 examples of prostitution ads Defendants
`
`published in the course of that conspiracy. (2-ER-143–49.) The ads marketed the
`
`sale of women or minors using well-understood but coded references to prostitution.
`
`
`
`11
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 17 of 62
`
`
`
`(2-ER-143–49). The allegations incorporated into Counts 2-51 show Defendants
`
`worked together to facilitate prostitution by publishing these and similar ads. (E.g.,
`
`2-ER-103, 143–49.) Even if a Defendant may not have personally been aware of the
`
`specifics of each ad (Backpage employed dozens of low-level moderators to review
`
`and revise ads) (see, e.g., 2-ER-112–17, 121), it was reasonably foreseeable in light
`
`of the policies Defendants implemented as part of their conspiracy that such
`
`violations would be committed in furtherance of the conspiracy.
`
`
`
`The 50 ads identified in Counts 2-51 fall into three categories. First, 15 depict
`
`specific victims. (2-ER-143–47.) Backpage employees coached many of these
`
`victims or their pimps regarding their ads and/or edited the ads. (See, e.g., 2-ER-
`
`134–37.) Second, 10 of the ads were posted by P.R., a prostitute whom Ferrer
`
`assisted in posting prostitution ads on Backpage. (2-ER-124–26, 144–47.) Third,
`
`the remaining 25 ads contain “GFE” or “girlfriend experience,” (2-ER-147–49),
`
`which Defendants acknowledged was a “coded sex act for money” term. (2-ER-130–
`
`31.) The SI describes other prostitution ads on Backpage, including ads describing
`
`specific sex acts (e.g., “blow jobs”) with prices. (See, e.g., 2-ER-121.)
`
`
`
`Counts 52-100 charge various Defendants with conspiracy and money
`
`laundering counts to conceal the source of Backpage’s revenues. (2-ER-138–43,
`
`149–56.) For example, in 2017, to evade government seizure, Lacey transferred
`
`$16.5 million in Backpage-derived cash to Hungary. (2-ER-100, 156; 3-ER-482.)
`
`
`
`12
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 18 of 62
`
`
`
`
`
`The United States Worked for Years to Prepare for Trial
`
`3.
`
`From April 2018 to August 2021, the parties engaged in extensive pretrial
`
`litigation. (See 23-ER-4825–4935.) Defendants filed six motions to dismiss that the
`
`United States opposed and the district court denied. (See CRs 559, 793, 840, 844,
`
`946, 1168.) By January 2019, the United States produced approximately 7.8 million
`
`documents in discovery. (CR 444.) Defendants sought several trial continuances.
`
`(See, e.g., CRs 862, 990, 1058, 1113.) Trial finally began September 1, 2021, and
`
`the United States scheduled more than 70 witnesses from around the country to
`
`testify over the next three months. (See 22-ER-4480 (“90 percent of [the United
`
`States’] witnesses are from out of state that we’re flying in”); CR 1314.)
`
`
`
`The United States’ anticipated trial witnesses included two high-level
`
`Backpage insiders, Carl Ferrer and Dan Hyer. In April 2018, several Backpage
`
`operating entities and Backpage’s then-CEO, Ferrer, pleaded guilty and admitted
`
`that the “great majority” of Backpage’s revenue-generating ads were “for
`
`prostitution services.” (1-SER-15–16; 1-SER-31.) Ferrer further admitted that he
`
`“conspired with other Backpage principals,” including Defendants, “to create
`
`‘moderation’ processes through which Backpage would remove terms and pictures
`
`that were particularly indicative of prostitution and then publish a revised version of
`
`the ad.” (1-SER-16.) He also admitted to conspiring with Defendants to engage in
`
`money laundering, including “fool[ing] credit card companies[.]” (1-SER-16–17.)
`
`
`
`13
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 19 of 62
`
`
`
`Backpage’s Sales and Marketing Director Hyer later pleaded guilty to Count 1 of
`
`the SI, corroborated Ferrer’s account of Backpage’s “moderation,” and confirmed
`
`that Backpage created and modified prostitution ads. (1-SER-115–17.)3
`
`4.
`
`
`
`The Trial Court Anticipated and Approved of Some Discussion of Sex
`Trafficking and Child Sex Trafficking at Trial.
`
`a.
`
`The Court Ruled In Limine that the United States Could Refer to
`Sex Trafficking and Child Sex Trafficking at Trial.
`
`
`In advance of trial, and as most relevant here, the district court decided three
`
`
`
`motions in limine regarding types of evidence the United States was entitled to
`
`present. In October 2020, the court ruled the United States could introduce expert
`
`testimony on the following sex trafficking topics: (1) “[h]ow human/sex trafficking
`
`occurs through online media”; (2) “[h]ow law enforcement conducts trafficking
`
`investigations, with a focus on how investigations shifted from craigslist.com to
`
`backpage.com”; and (3) an “[e]xplanation of terminology often used in [the]
`
`trafficking and prostitution industry.” (4-ER-818–20.)
`
`
`3 Defendants’ Brief contains an outdated account of Backpage’s litigation history
`predating these guilty pleas, the Senate Report and other significant developments,
`to which the United States has responded in numerous court filings. (Compare Op.
`Br. at 11-19 with 2-ER-83–88; 3-ER-283–84, 301–07, 317–18, 323; 7-ER-1328–30,
`1335–37; 1-SER-196–202; 1-SER-234–35, 242–45.) Rather than repeat here, the
`United States stands on these filings. Moreover, many of Defendants’ points have
`been rejected at other stages of these proceedings in the district court. See, e.g.,
`United States v. Lacey, 423 F. Supp. 3d 748, 760-63 (D. Ariz. 2019); 1-SER-71–72,
`100–03.) In all events, Defendants cannot to use this narrow interlocutory appeal as
`a backdoor means of re-litigating all of this here. See Part IV.B, supra (citing cases).
`
`
`
`
`14
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 20 of 62
`
`
`
`
`
`In May 2021, the court ruled the United States could introduce evidence
`
`concerning sex trafficking and child sex trafficking at trial. (5-ER-877–82.) The
`
`court agreed “both [are] forms of prostitution. Both are simply a subset of the crime.
`
`Sex trafficking and child sex trafficking require victims to engage in sex in exchange
`
`for payment, and the Government must prove that Defendants intended to facilitate
`
`prostitution through Backpage.com.” (5-ER-879.) The court ruled “[e]vidence that
`
`tends to prove that Defendants were aware that Backpage.com was being used to
`
`facilitate sex trafficking and child sex trafficking [is] extremely probative to show
`
`notice to Defendants that the website was being used for illegal purposes.” (5-ER-
`
`879.) The United States could not “linger on the details of” victims’ abuse or
`
`“introduce lengthy testimony . . . about their lives, lifestyles, or other details of their
`
`time working as prostitutes.” (5-ER-880–81.) The government could introduce
`
`testimony involving victims’ use of Backpage, including “how ads were created,
`
`drafted, edited, and paid for.” (5-ER-881.)
`
`
`
`In June 2021, the court ruled that evidence of Backpage’s reputation as a
`
`leading source of illegal sexual service advertisements could be admitted, provided
`
`that it was connected to communications with Backpage or Defendants. (5-ER-889.)
`
`b.
`
`The Court Twice Denied Defendants’ Mistrial Motions
`Regarding Trafficking References in the Opening Statement.
`
`
`Before opening statements, the district court stated “they [the United States]
`
`
`
`aren’t prohibited from using the word trafficking,” but cautioned the government not
`15
`
`
`
`

`

`Case: 22-10000, 04/14/2022, ID: 12422032, DktEntry: 25, Page 21 of 62
`
`
`
`to focus its “whole opening” on that topic. (20-ER-4028.) On September 3, 2021,
`
`the United States delivered its opening statement. (20-ER-4060–4116.) Defendants
`
`asserted six objections to portions that referenced trafficking, four of which were
`
`overruled. (20-ER-4064, 4087, 4088, 4092, 4103–04, 4115–16.) After the
`
`prosecutor concluded, Defendants orally moved for a mistrial, and the government
`
`opposed the motion. (See 20-ER-4117–31.) The court responded: “[W]ith respect to
`
`comments about children trafficking, I’ve already ruled on that. And the government
`
`didn’t cross the line on that issue, in my mind, because they didn’t go into any of the
`
`details. It was merely the fact that this happened.” (20-ER-4129.)
`
`
`
`On September 6, 2021, Defendants filed a written mistrial motion raising the
`
`same objections. (9-ER-1472–92.) The next day, the United States filed a 17-page
`
`opposition. (1-SER-271–89.) On September 8, 2021, the

This document is available on Docket Alarm but you must sign up to view it.


Or .

Accessing this document will incur an additional charge of $.

After purchase, you can access this document again without charge.

Accept $ Charge
throbber

Still Working On It

This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.

Give it another minute or two to complete, and then try the refresh button.

throbber

A few More Minutes ... Still Working

It can take up to 5 minutes for us to download a document if the court servers are running slowly.

Thank you for your continued patience.

This document could not be displayed.

We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.

Your account does not support viewing this document.

You need a Paid Account to view this document. Click here to change your account type.

Your account does not support viewing this document.

Set your membership status to view this document.

With a Docket Alarm membership, you'll get a whole lot more, including:

  • Up-to-date information for this case.
  • Email alerts whenever there is an update.
  • Full text search for other cases.
  • Get email alerts whenever a new case matches your search.

Become a Member

One Moment Please

The filing “” is large (MB) and is being downloaded.

Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.

Your document is on its way!

If you do not receive the document in five minutes, contact support at support@docketalarm.com.

Sealed Document

We are unable to display this document, it may be under a court ordered seal.

If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.


Access Government Site

We are redirecting you
to a mobile optimized page.





Document Unreadable or Corrupt

Refresh this Document
Go to the Docket

We are unable to display this document.

Refresh this Document
Go to the Docket