The Backpage lawsuit was a federal criminal prosecution against the founders and top executives of Backpage.com, the online classifieds site the FBI seized in April 2018 for facilitating prostitution and laundering the proceeds. Three executives were convicted in November 2023, prison sentences ran from five to ten years, and the government forfeited $215 million in cash, cryptocurrency, and real estate. Those funds now sit in a victim compensation program that has drawn more than 10,000 claims from trafficking survivors.
What Backpage Was Prosecuted For
Michael Lacey and James Larkin founded Backpage.com in 2004. Its “adult” section became the site’s dominant revenue source, and federal authorities alleged the company generated more than $500 million, overwhelmingly from advertisements that promoted prostitution and sex trafficking, including the trafficking of minors.1U.S. Department of Justice. Backpage Principals Convicted in $500M Prostitution Promotion Scheme
A 2017 Senate Permanent Subcommittee on Investigations report found that Backpage systematically edited ads to strip out words and images signaling criminality while allowing the underlying transactions to proceed, and that by late 2010 the company estimated it was editing 70 to 80 percent of adult ads. At the time of the report, Backpage was involved in 73 percent of all child trafficking reports the National Center for Missing and Exploited Children received from the public.2U.S. Senate. Backpage.com’s Knowing Facilitation of Online Sex Trafficking
In March 2018, a federal grand jury in the District of Arizona returned an indictment charging Backpage and its principals with conspiracy to facilitate prostitution, facilitating prostitution through interstate commerce, conspiracy to commit money laundering, and multiple counts of money laundering. The FBI seized the site on April 6, 2018. CEO Carl Ferrer pleaded guilty within days and became the government’s key cooperating witness, admitting that Backpage’s content-moderation practices were “merely intended to create a veneer of deniability.”3Politico. Backpage CEO Pleads Guilty
The Trials and Convictions
The first federal trial began in September 2021 in Phoenix and collapsed after three days. U.S. District Judge Susan Brnovich declared a mistrial, finding the government had “repeatedly flouted” court orders by introducing inflammatory testimony about uncharged child sex trafficking that “unfairly tainted the jury.”4Courthouse News Service. Judge Denies Two Mistrial Motions in Backpage Case
Larkin died by suicide on July 31, 2023, at age 74, days before the second trial was set to begin.5Reason. Backpage Publisher James Larkin Has Died He and Lacey had maintained their innocence throughout.
The retrial went forward that September before Judge Diane Humetewa on a 100-count felony indictment. In November 2023, the jury convicted John “Jed” Brunst, the chief financial officer, and Scott Spear, the executive vice president, on scores of Travel Act and money laundering charges. Michael Lacey was convicted on a single count of international concealment money laundering. The jury deadlocked on 84 additional counts against Lacey, and two other Backpage employees were acquitted.6PBS NewsHour. Backpage Founder Michael Lacey Sentenced to 5 Years in Prison
In April 2024, Judge Humetewa granted a defense motion to acquit Lacey on 50 of the 84 deadlocked counts for insufficient evidence, leaving 34 unresolved. Brunst was acquitted post-trial on 15 charges, and Spear on 10.7Front Page Confidential. Judge Acquits Journalist Michael Lacey on 53 of 84 Counts in Backpage Case
Sentences
Sentences came down in August 2024. Lacey received five years in federal prison and a $3 million fine for his single money laundering conviction. Brunst and Spear each received 10-year sentences.6PBS NewsHour. Backpage Founder Michael Lacey Sentenced to 5 Years in Prison
The cooperators fared better. In September 2025, Ferrer received three years of probation and $40,000 in restitution. Dan Hyer, the former sales director who had pleaded guilty to a conspiracy charge, avoided incarceration entirely.8Click Orlando. Backpage Executives to Be Sentenced After Testifying Against Site Founder
Where the Appeals Stand
All three convicted defendants appealed to the Ninth Circuit Court of Appeals. In November 2024, a three-judge panel granted Lacey bail pending appeal, finding his case raises a “substantial question of law” that is “fairly debatable” and could result in reversal. The panel focused on whether his conduct amounted to “concealment money laundering” given that he had filed tax forms disclosing the funds to the IRS. Judge Humetewa set his bail at $1 million, and he was released after having surrendered on September 11, 2024.9Courthouse News Service. Backpage Co-Founder Granted Bail Pending Appeal10Reason. Backpage Founder Michael Lacey May Be Released on Bail
The same panel denied bail to Brunst and Spear, ruling their appeals did not raise a substantial enough question to warrant release. Both remain in federal custody. Defense attorneys have estimated the full appeal could take two years or more.11Front Page Confidential. Ninth Grants Lacey Bail Pending Appeal, Denies It for Brunst, Spear
Federal prosecutors have said they intend to retry Lacey on the 34 counts the jury deadlocked on, but will wait for the Ninth Circuit to rule before scheduling a third trial.10Reason. Backpage Founder Michael Lacey May Be Released on Bail
The $215 Million Forfeiture
Separately from the Arizona criminal case, the government pursued civil forfeiture in the Central District of California. On December 11, 2024, the U.S. Attorney’s Office in Los Angeles announced a $215 million settlement in that action. The forfeited assets included cash, cryptocurrency, and a parcel of San Francisco real estate, representing more than 80 percent of the property seized or restrained in the case.12U.S. Attorney’s Office, Central District of California. Justice Department Agrees to $215 Million Settlement Agreement Related to Assets of Internet Prostitution Ad Service Backpage.com
An additional $15 million in assets forfeited from the related CityXGuide prosecution was directed to the same compensation pool. CityXGuide was a copycat site that launched one day after Backpage was shut down; its owner, Wilhan Martono, was sentenced in November 2022 to 97 months in prison and became the first person convicted under FOSTA-SESTA.13U.S. Department of Justice. CityXGuide Owner Sentenced to 8 Years in Prison
Victim Compensation: Who Qualifies and What’s Covered
The Department of Justice launched the remission process on July 31, 2025, to distribute the forfeited funds to trafficking survivors. Epiq Global Inc. administers the program under DOJ oversight.14U.S. Department of Justice. U.S. Department of Justice Announces Compensation Process for Victims Trafficked Through Backpage.com
Eligibility covers individuals who were sex trafficked through advertisements on Backpage.com between January 1, 2004, and April 6, 2018, or on CityXGuide between April 8, 2018, and June 19, 2020. Claims could be filed by victims, their legal representatives, or the estates of deceased victims.
The program reimburses documented financial losses: medical expenses, behavioral health costs, and lost wages. Pain and suffering and other non-monetary damages are not covered. Filing was free. The National Center for Missing and Exploited Children set up a “Backpage Survivor Remission Network” to connect claimants with pro bono legal help.15FBI. FBI Urges Backpage and CityXGuide Trafficking Victims to Apply for Compensation
The claim deadline was March 31, 2026. As of mid-2026, the DOJ has received more than 10,000 petitions and is reviewing them for eligibility. Individual payout amounts have not been set. If eligible claims exceed available funds, payments will be distributed proportionally. The DOJ has cautioned that review “will take a considerable amount of time,” and Epiq is not providing individual status updates during the review period.16Backpage Remission Program. Frequently Asked Questions
Why Victims Couldn’t Sue Backpage Directly
Before the federal criminal case, survivors tried to sue Backpage in civil court and lost on Section 230 grounds. In Jane Doe No. 1 v. Backpage.com, LLC, three pseudonymous plaintiffs alleged the site facilitated their trafficking. The First Circuit affirmed dismissal in 2016, holding Section 230 shielded Backpage because the claims treated it as a publisher of third-party content. The Supreme Court declined to hear the case in January 2017.17Butler Snow LLP. Jane Doe No. 1 v. Backpage.com, LLC, 817 F.3d 12 (1st Cir. 2016)
That result pushed Congress to pass the Allow States and Victims to Fight Online Sex Trafficking Act and the Stop Enabling Sex Traffickers Act. FOSTA-SESTA passed 97 to 2 in the Senate and 388 to 25 in the House, and President Trump signed it on April 11, 2018, days after Backpage was seized. The law amended Section 230 to strip immunity from websites that knowingly facilitate sex trafficking, authorized state attorneys general to bring civil enforcement actions, and created a new federal crime for promoting or facilitating prostitution with reckless disregard of sex trafficking. The liability changes apply retroactively but do not extend to labor trafficking.18The Trafficking Institute. Beyond Backpage.com: SESTA/FOSTA Becomes Law
For Backpage survivors today, the practical route to money is the federal remission program rather than private litigation. Claims are closed, and the government now controls both the pool of funds and the timeline on which they’ll be paid out.