Backpage co-founder Michael Lacey has been released from prison on bail, following a federal court ruling last Thursday. Lacey is in the process of appealing his conviction on one count of international concealment money laundering, for which he has been sentenced to five years in federal prison. Under the court's recent ruling, he may now wait out the resolution of that appeal a somewhat free man.
This is clearly good news for Lacey, who had been in federal custody since September 11. It's also good news for anyone who cares about free speech and about justice, considering the complete civil liberties nightmare that Lacey's prosecution has been. (See Reason's recently released documentary about the whole saga—"Classified: The War on Backpage.com"—for more.)
Unfortunately, Lacey's former colleagues Jed Brunst and Scott Spear will remain behind bars as their appeals play out. Lacey, Brunst, and Spear had asked the 9th U.S. Circuit Court of Appeals for permission to post bail while they await the conclusion of their appeals cases—a process that could take years.
Last week, the appeals court granted Lacey's request while denying a similar request from Brunst and Spears. "Brunst and Spear have not shown that their appeals raise a 'substantial question' of law or fact that is likely to result in reversal or a new trial on all counts of conviction, or a sentence with a term of imprisonment less than time served plus the expected duration of the appeal process," the court held.
By contrast, "Lacey has shown that his appeal raises a 'substantial question' of law or fact that is 'fairly debatable' and that, if determined favorably to him, is likely to result in reversal on the single count of conviction," states the court's order. Moreover, "Lacey is not likely to flee or to pose a danger to the safety of any other person or the community if released."
The 9th Circuit sent Lacey's case back to U.S. District Court Judge Diane Humetewa to set Lacey's bail amount. Humetewa—who presided over Lacey's 2023 trial—set Lacey's bail at $1 million. She has yet to determine the conditions of his release, but a hearing is scheduled for December 2.
"Lacey's appeal raised several issues, including the fact there was no concealment in the 2017 transfer of money to Hungary that resulted in the charge against him," notes Stephen Lemons at Front Page Confidential, a site dedicated to defending the Backpage 3. "Lacey filed timely notices with the government and paid all relevant taxes on the funds," Lemons writes.
Six defendants were scheduled to go on trial in 2023, but Jim Larkin—Lacey's longtime partner in the newspaper business and the co-founder of Backpage—committed suicide just before the trial started. Five defendants ultimately were tried, with two totally acquitted.
A jury convicted Lacey of just one of the 86 counts against him and acquitted him of just one count. Jurors were hung on the other charges, and Humetewa declared a mistrial.
Humetewa later acquitted Lacey of many of the remaining charges against him. But there are still 34 outstanding counts on which federal prosecutors could try Lacey again.
"Earlier this year, prosecutors filed notice with the court that they intend to retry Lacey on the outstanding counts, but they later signaled their intention to await the outcome of the appeals process before going forward with a retrial," writes Lemons.
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