Two former executives of the defunct classified website Backpage.com are scheduled to be sentenced Tuesday in Phoenix after pleading guilty in 2018 to conspiring to facilitate prostitution by selling sex ads, prosecutors said.
Federal prosecutors recommended five years of probation and restitution payments for former CEO Carl Ferrer and former sales director Dan Hyer, citing their cooperation with authorities and testimony against Backpage founder Michael Lacey at his 2023 trial. Ferrer and Hyer admitted to conspiring to facilitate prostitution and have acknowledged their roles in the company’s operations.
Ferrer told prosecutors that a majority of Backpage’s revenue derived from escort ads and that he conspired to sanitize postings by removing photos and wording indicative of prostitution before republishing them. In sentencing filings, prosecutors and Ferrer’s lawyers said his cooperation helped lead to the shutdown of the site and establishment of links between other defendants and the enterprise. Hyer previously participated in a scheme to give free ads to sex workers to draw them away from competitors, prosecutors said; his attorney has described him as sincerely remorseful and noted his assistance in securing convictions.
Lacey was convicted in 2023 on a single count of international concealment money laundering and was sentenced to five years in prison and fined $3 million, though he remains free while pursuing an appeal. Other Backpage executives received stiffer sentences: chief financial officer John Brunst and executive vice president Scott Spear are serving 10-year prison terms after convictions on conspiracy and money laundering charges.
Prosecutors have argued that Backpage’s operators ignored warnings to stop running prostitution ads, including some that involved children, and that the company cultivated arrangements with people in the sex industry, including by offering free ads, to drive traffic and revenue. Defense lawyers for Backpage’s operators have said the company did not allow ads for sex, assigned employees to remove illicit ads, developed automated tools to catch problematic content and that postings on the site generally were protected by the First Amendment.
In their guilty pleas, company executives acknowledged the financial role escort ads played in Backpage’s profitability and the practices used to keep those ads on the site. Sentencing memoranda for Ferrer and Hyer note their post-plea cooperation, including testimony at the 2023 trial that helped secure convictions of other defendants.
The legal fight over Backpage dates to the early 2000s. Lacey and James Larkin, who cofounded the Phoenix New Times weekly newspaper and later owned other weeklies including The Village Voice, sold their newspapers in 2013 but retained Backpage. Larkin was charged in the case and died by suicide in 2023 shortly before the second trial of Backpage operators was set to begin. Lacey’s first trial in 2021 ended in a mistrial after a judge concluded prosecutors had made improper references to child sex trafficking in a case where no such charge was filed.
Authorities have said Backpage generated roughly $500 million in prostitution-related revenue from its 2004 inception until the government seized the site in 2018. A U.S. Government Accountability Office report released in June 2021 found that the FBI’s ability to identify victims and sex traffickers decreased after the seizure because law enforcement personnel were familiar with the site and Backpage had generally been responsive to information requests prior to the shutdown.
Tuesday’s sentencing will resolve penalties for Ferrer and Hyer after years of criminal proceedings that exposed the company’s role in online sex ads and prompted debate among law enforcement, prosecutors and free-speech advocates about the responsibilities of online platforms. Appeals and related civil and criminal litigation stemming from Backpage’s operations remain active for some defendants.