Michael Lacey, co-founder of Backpage.com, was sentenced to five years in prison and fined $3 million for money laundering in a case involving allegations of promoting and profiting from prostitution through classified ads. The site generated $500 million in prostitution-related revenue before being shut down in 2018.
Lacey’s lawyers claim he was not involved in day-to-day operations, but Judge Humetewa stated he was aware of the allegations and did nothing. Two other executives were sentenced to 10 years in prison for similar charges.
Prosecutors argued that Backpage masqueraded as a legitimate business while promoting prostitution and misled law enforcement. They accused Lacey of using cryptocurrency and wired money to foreign accounts to launder earnings. Backpage employees allegedly identified prostitutes through Google and offered free ads, engaging in other questionable practices.
Despite efforts to prevent criminal conduct, the GAO reported a decrease in the FBI’s ability to identify victims and sex traffickers after Backpage’s seizure. Lacey and co-founder Larkin sold their interests in 2015 but retained control over the site’s operations.
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