The Arizona Republic - - Front Page - Richard Rue­las

A fed­eral judge on Fri­day set a $1 mil­lion bond for Michael Lacey, the co-founder of Back­, while he awaits trial on mul­ti­ple charges that the clas­si­fied ad­ver­tis­ing web­site fa­cil­i­tated pros­ti­tu­tion and that ex­ec­u­tives laun­dered the lu­cra­tive pro­ceeds.

Un­der con­di­tions of his re­lease, Lacey would be sub­ject to elec­tronic mon­i­tor­ing. He would also have to post two of his prop­er­ties as surety. It was not clear in the hear­ing which prop­er­ties those were.

Lacey was ar­rested April 6, after a grand jury re­turned a 93-count in­dict­ment against seven Back­page em­ploy­ees and ex­ec­u­tives. Fifty of the counts, ap­ply­ing to six of the de­fen­dants, in­volved the web­site fa­cil­i­tat­ing pros­ti­tu­tion. The re­main­ing counts dealt with money laun­der­ing.

Lacey, 69, ap­peared at the hear­ing Fri­day in Phoenix clad in black and white stripes and no hand­cuffs. He gave a se­ries of brief an­swers – “I do, your honor,” “No, your honor” – while U.S. Dis­trict Mag­is­trate Judge Brid­get Bade walked him through the con­di­tions of his re­lease.

Lacey also had to sur­ren­der his pass­port. But an at­tor­ney for Lacey, Janey Henze Cook, said in court that the pass­port was al­ready in the cus­tody of FBI agents who seized it dur­ing a raid on Lacey’s prop­erty.

James Larkin, also co-founder of Back­page, faces sim­i­lar charges. He is sched­uled for a de­ten­tion hear­ing Mon­day.

On Thurs­day, the gov­ern­ment an­nounced that Carl Fer­rer, the for­mer CEO of Back­page, pleaded guilty to sim­i­lar charges of fa­cil­i­tat­ing pros­ti­tu­tion and money laun­der­ing. Fer­rer ad­mit­ted in his plea agree­ment that the web­site was de­signed to be used to en­able pros­ti­tu­tion trans­ac­tions. He also said in the agree­ment that the web­site cre­ated pro­ce­dures to mod­er­ate and mon­i­tor ads to give a ve­neer of de­ni­a­bil­ity that Back­page ex­ec­u­tives knew how the site was be­ing used.

Back­page started in 2004, bring­ing the clas­si­fied ad­ver­tis­ing found in New

Times, in­clud­ing the ads sold for a pre­mium on the lit­eral back page of the tabloid, into cy­berspace. Lacey founded

New Times and Larkin was its pub­lisher. It was Fer­rer who prod­ded Lacey and Larkin to cre­ate Back­page, ac­cord­ing to a U.S. Se­nate re­port into Back­page ac­tiv­i­ties.

Back­ co-founder Michael Lacey ex­its fed­eral court in Phoenix upon re­lease on a $1 mil­lion bond. He has been charged with money laun­der­ing and fa­cil­i­tat­ing pros­ti­tu­tion. TOM TIN­GLE/THE RE­PUB­LIC

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