Jury in Backpage trial stuck in deadlock

After four days of deliberation, it seems a jury is no closer to a verdict on the 100 felony counts stacked against former owners and operators of Backpage.com

A
juror sent a note to the presiding judge in the federal case Tuesday
afternoon indicating that the 12-person jury has come to a unanimous
decision on only one of the 100 counts.

“I feel that personal
feelings, emotions and what-if opinions have brought us to a
standstill,” a juror wrote in the note. “I feel this has become a hung
jury.”

Two jurors signed the note. Last week, jurors asked the judge what happens if they can’t agree on every count. 

If
a jury can’t come to a decision on one or more counts, the jury is
considered hung. Often this leads to a retrial on whichever counts
weren’t decided. 

This case is already in its second trial. The first was declared a mistrial in 2021.

The
jury was tasked with deliberating charges against Michael Lacey,
co-founder and former owner of the classified advertising website Backpage,
two former executives and two former employees, who are collectively
accused of facilitating prostitution in violation of the U.S. Travel Act
and money laundering through their operation of Backpage. 

Federal prosecutors say the website’s adult section ran rampant with prostitution ads
disguised as legal adult services like escorts and sensual body rubs.
Fifty of the 100 counts in the federal indictment apply to 50 specific
ads that ran on the site before the FBI shut it down in 2018. 

The
first count, applied to all defendants, is conspiracy to facilitate
prostitution. Counts 52 through 100 are money laundering charges brought
against Lacey and the two other executives: former chief financial
officer John Brunst and former executive vice president Scott Spear. 

The
jury also asked the judge for a definition of the term “concealment,”
indicating disagreement over the money laundering charges. U.S. District
Judge Diane Humetewa, a Barack Obama appointee, gave the jury a
definition, and called jurors into the courtroom to reiterate previous
instructions, telling them to take their time, consider all the
evidence, and to reevaluate their own opinions to reach a unanimous
decision. 

Earlier in the day, the jury asked the judge whether a
defendant can be convicted on one or more of the specific prostitution
charges if they’re found innocent of the underlying conspiracy charge.

“The obvious answer is yes,” Humetewa said to the parties, who had gathered to discuss what answer to submit back to the jury.

The government agreed, reasoning that each count in the indictment should be considered individually. 

Defense
attorneys differed. They told Humetewa that a defendant must be found
to be part of a conspiracy to be found guilty of any actions taken in
support of that conspiracy. 

Ultimately, Humetewa told the jury “yes.”

Defense attorneys lodged their sixth motion for mistrial last week, this time claiming that prosecutors failed to disclose a document that should have been provided in discovery. 

The
document is a 90-page draft of an “asset tracing report” prepared by an
IRS investigator in anticipation of a civil forfeiture proceeding,
assuming a guilty verdict on the money laundering counts. The government
sent defense attorneys the document Wednesday.

Gary Lincenberg, representing Brunst, told Humetewa
Tuesday that the information in the draft contradicts statements made
by IRS investigator Quoc Thai during his testimony in trial, and that
the defense could have used the document to impeach both Thai and Carl
Ferrer, former Backpage CEO who took a plea deal and testified against
the defendants. 

But the government pointed out
that all the information included in the draft was copied into civil
forfeiture affidavits that were already disclosed to defendants in
discovery. So, the document didn’t contain any information that
defendants didn’t already possess at time of trial.

Prosecutors
clarified that neither Thai nor Ferrer had hands in writing or approving
the document, so it doesn’t qualify as a witness statement that should
have been disclosed.

The evidentiary hearing barely got off the
ground before Lincenberg struck a nerve with Humetewa in suggesting that
her regard of the document “goes against common sense.”

“Mr.
Lincenberg, you try my patience on numerous occasions,” she chastised.
“Never in my time on the bench have I been accused of going against
common sense.”

Humetewa threatened to ask Lincenberg’s co-counsel
to take over for him, to which Lacey muttered “Jesus Christ,” under his
breath, just audible enough to be heard by the whole courtroom.

“And I will have silence in the courtroom,” Humetewa chided. 

“I didn’t say anything,” Lacey’s attorney Paul Cambria replied. “I didn’t say anything.”

The evidentiary hearing to decide whether the draft document should have been disclosed will continue at 11 a.m. on Wednesday.