PHOENIX (AP) — A founder of the classified advertising site Backpage.com
was released from custody Friday after spending a week in jail on
charges alleging that he knowingly published ads for sexual services and
Michael Lacey walked out of the federal
courthouse in Phoenix after posting a $1 million bond and declined to
speak with reporters about the charges against him.
His release came a day after authorities revealed that Backpage.com CEO Carl Ferrer pleaded guilty to a federal conspiracy charge in Arizona and state money laundering charges in California.
addition, the company pleaded guilty to human trafficking in Texas and a
federal money laundering conspiracy charge in Arizona. Ferrer has
agreed to testify against others.
U.S. Magistrate Judge Bridget
Bade ordered that Lacey wear an electronic monitoring device, provide an
accounting of his finances and refrain from exerting any control over
Lacey wore a black and white striped jail suit during
a bail hearing Friday. His only comments came when he told the judge
that he understood the conditions of his release.
"I do, your honor," Lacey said.
co-founder James Larkin and five employees were arrested last week on
federal charges. Larkin remains in jail and has a bail hearing Monday.
The federal indictment in Arizona alleges Backpage.com
ignored warnings to stop running advertisements promoting prostitution,
sometimes involving children, because the site had brought in $500
million in prostitution-related revenues since its inception in 2004.
Authorities say Backpage.com
portrays itself as trying to prevent such ads, but investigators
determined the site's operators have declined to confront the problem.
Employees are accused of helping customers edit their ads to say within
legal limits while still encouraging commercial sex.
The indictment alleges Backpage.com started to launder money earned from ad sales after banks raised concerns that they were being used for illegal purposes.
Lacey, Larkin and four of the five employees charged in the federal case in Arizona have pleaded not guilty.
Follow Jacques Billeaud at twitter.com/jacquesbilleaud. His work can be found at https://bit.ly/2GGWEPO .