Justice Department Secures $215 Million Settlement in Backpage.com Forfeiture Case

LOS ANGELES, California — The Justice Department has filed a settlement agreement in the civil forfeiture case involving Backpage.com, a defunct internet platform for prostitution ads, resulting in the forfeiture of $215 million in assets to the United States.

The assets, which include cash, cryptocurrency, and a parcel of real estate in San Francisco, were previously seized from Backpage and its agents and will be used to compensate victims through a remission process, according to the Justice Department. Backpage, which dominated the online market for illegal sex work advertising in the U.S. for most of its 14-year existence, generated over 90% of its revenue from adult-related ads, with its CEO admitting that most were for prostitution.

In April 2018, Backpage LLC and related entities pleaded guilty to conspiracy to engage in money laundering in Arizona federal court. Several executives, including Michael Lacey, 76, of Paradise Valley, Arizona; Scott Spear, 74, of Phoenix; and John “Jed” Brunst, 72, of Phoenix, received prison sentences ranging from five to ten years. Lacey remains free on bail pending appeal.

The conspirators promoted prostitution through various strategies, including a reciprocal link program with a forum for "johns" to review prostitution acts and using filters to sanitize ads while maintaining plausible deniability. The scheme generated over $500 million, which was laundered through shell companies in multiple countries.

The investigation was conducted by the United States Postal Inspection Service, the FBI, and IRS Criminal Investigation, with prosecution assistance from the United States Attorney’s Office for the District of Arizona. Assistant United States Attorney Jonathan S. Galatzan is handling the case, identified as United States of America v. $1,546,076.35 In Bank Funds Seized from Republic Bank of Arizona Account 1889, et al., CV 18-08420 (C.D. Calif.).