Backpage Grand Jury Indictment Revealed: – Complaint and Key Players

Big news for readers of the blog who are concerned by the ongoing scandal surrounding Backpage and those who knowingly and willingly conspired with them.

Last week we obtained a copy of the previously sealed, and as yet unpublished, Grand Jury charges in the case of the United States of America v. Michael Lacey, James Larkin et al. And, over the next days, we’ll be here to take our readers through the actual federal charges, every step of the way.

But before we begin, we offer a little background surrounding the central complaint and key players.:

The indictment charges that the website www.backpage.com (“Backpage”) has long been notorious for being the internet’s leading source of prostitution advertisements. It goes on to claim that for years backpage derived “the overwhelming majority of its revenue from such ads” and that it was through these practices that Backpage was enabled to earn over $500 million in prostitution-related revenue from the time of its inception.

The charging document explicitly states that Backpage was first created in 2004 by MICHAEL LACEY, JAMES LARKIN, and a third individual listed in the document only as “C.F” — (It should be noted, that though not directly named in the indictment readers of this blog may remember the acting CEO of Backpage was a man by the name of Carl Ferrer)

Prosecutors allege that from 2004-15, it was both Lacey and Larkin who oversaw the website’s policies and strategic direction. Both of these men retained significant control over the website (and continued receiving tens of millions of dollars of Backpage-related distributions) since purportedly selling their interests in Backpage in 2015.

Additionally, the charging document makes clear that Lacey, Larkin and “C.F.” did not act alone. It lists a series of other co-defendants who played significant roles in creating Backpage page.

That list includes:

  • SCOTT SPEAR, who served as the Executive Vice President of one of Backpage’s parent companies and held, at times, an ownership interest in Backpage of approximately 4%.

  • JOHN “JED” BRUNST, who served as the Chief Financial Officer of Backpage and several of Backpage’s parent companies and held, at times, an ownership interest in Backpage of approximately 6%.

  • DAN HYER, who joined Backpage’s marketing department in or around 2006 and served as Backpage’s Sales and Marketing Director.

  • ANDREW PADILLA, who served as Backpage’s Operations Manager.

  • JOYE VAUGHT, who served as Backpage’s assistant Operations Manager.

Over the next several posts we will begin a deep dive exploring in-depth with actual court documents, the nation’s case against Backpage for the very first time.

Stay tuned! You don’t want to miss what’s to come.