In 2018, the Justice Department got a federal indictment with 93 counts against Arizona’s businesspeople who owned a nationwide media empire, which included the Village Voice and OC Weekly. Then, in the same year, it sought forfeiture of over $100 million as cash as well as the real estate of the businessmen and their management group members.
Prosecutors in Los Angeles District Court claimed the confiscated assets that were derived from Jim Larkin and Michael Lacey’s illegal conduct when they ran Backpage, an adult-services site.
There were indictments in April 2018 involved in an onslaught from public officials to remove the highly lucrative business. As per those indictments, Larkin and Lacey not only conspired to enable prostitution across US state lines but also laundered money.
In October 2018, the two business partners were facing a potential trial in 2020, which could send them to prison for life. The pursuit of law enforcement of the businessmen delighted US Attorney General (AG) Jeff Sessions. However, it bothered free-speech proponents and libertarians. Why? Because the businessmen were not part of a financial sex-trade-related transaction and federal law held sites harmless for user-generated content.
California’s Attorney General (AG) Kamala Harris used the website as political propaganda by trying to convict the two on multiple pimping counts. Interestingly, Harris, now the US Vice President, was looking for a seat in the United States Senate back then. Judges in California dismissed the accusations of Harris as baseless charges each time. However, federal officials, which included FBI, US Postal Service and IRS Criminal Investigation members, were trying another angle that focused mainly on finances. The officials labeled Backpage as the leading online forum for advertisements related to prostitution.
Alongside the criminal indictments in April 2018, the government not only seized Backpage but also shut the website down. The businessmen founded the media empire New Times over 50 years ago, acquired the rival VVM (Village Voice Media) publications in 2005 as well as sold their paper holdings in several places.
They found the adult site around 20 years before to compete with Craigslist, which dominated online classifieds that undercut the ad revenues of dailies and weeklies. The US Senate Committee’s 2017 report published the following accusations made against Backpage officials.
- They systematically edited its adult advertisements to hide the real nature of that transaction, which would serve as evidence of criminal activity
- They facilitated the transportation of kids across the border for prostitution
- They completed a fake inactive-company transaction abroad worth $600 million to mask Larkin and Lacey’s continued website ownership
As per the Committee, Backpage earned over $500 million as revenue, which included $135 million back in the year 2014 alone.
As per their court filings from October 2018, prosecutors from the Justice Department’s asset-forfeiture unit in LA were aggressively attempting to deplete Larkin and Lacey’s resources. They got Davis Wright Tremaine’s law firm to forfeit $3.7 million as alleged funds associated with Backpage. They seized over $97 million as cash from global bank accounts, including the accounts in the Netherlands and the Czech Republic. They sought authorization to permanently take hold of not just Backpage’s domain names but also the properties of the businessmen in Saint Helena, Sebastopol, San Francisco, Paradise Valley, Sedona, and Chicago.
According to an article that Reason published on August 21, 2018, law enforcement officers consistently appreciated the website for its assistance in not only locating runaway teenagers but also making legal cases against sexual predators. Even Federal Bureau of Investigations chief James Comey was among the officials who applauded the site for the above-mentioned.
The case of the prosecutors left Elizabeth Nolan Brown, who authored the story featured on Reason, unimpressed. As per Brown, the businessmen’s arrest was better understood to be a news story of almost religious fervor, political retribution and government greed. In the news story, mounting panic about commercial sex and a booming publishing platform happed at the same time.
Larkin and Lacey were critics of bad cops and corrupt politicians for a long time. The businesspeople believed that law enforcement targeted them for retribution. In October 2021, a judge deemed their trial on counts of prostitution facilitation and money laundering a mistrial.