PHOENIX — Former Backpage.com CEO Carl Ferrer was sentenced in federal court today to three years' probation and a $40,000 restitution fine for a conspiracy conviction related to money laundering through the defunct website.
Ferrer, who pleaded guilty in 2018 to the conspiracy charge when he and site co-founders Michael Lacey and James Larkin were originally arrested, was sentenced by U.S. District Judge Diane Humetewa. Former sales director Dan Hyer, who also pleaded guilty to conspiracy and faced sentencing today, was released on time served and not ordered to pay restitution.
"What the company did was wrong, and what I did was wrong," Ferrer said during the hearing. "I’m sorry. I will carry this regret and shame with me for the rest of my life."
Prosecutors had asked for five years' probation, admitting that Ferrer's cooperation with the investigation had enabled them to achieve "understanding of the nature and circumstances of the offenses," allowing the government to seize more than $200 million in company assets.
"He is almost entirely responsible for us having that $200 million victims’ fund," federal prosecutor Kevin Rapp told Humetewa.
Ferrer's attorneys asserted that he was the victim of "brainwashing" by his co-founders, who he claimed had assured him the First Amendment protected the company's actions.
"He was surrounded by a stream of misrepresentations and lies," said Ferrer attorney Jonathan Baum.
During his own sentencing, Hyer said, "My actions at Backpage affected the lives of people I’ll never know. It’s hard to look myself in the mirror. I will continue to try and work on the side of good rather than evil for the rest of my life."
Humetawa responded, "I feel, Mr. Hyer, your remorse to be sincere."
As XBIZ reported, former Backpage executives Joy Vaught and Andrew Padilla were found not guilty in a 2023 trial. Humetewa took that acquittal into account in sentencing Hyer, whose lawyers argued he was simply following the directions of his superiors.
"Because you were not a decision-maker, I am reminded that sometimes you were taking guidance from Mr. Padilla," Humetewa said. "If the jury didn’t find enough to convict Mr. Padilla or Ms. Vaught, I do have to take that into consideration."
The controversial Backpage case, originally launched by the Justice Department in 2018, contended that the website facilitated prostitution. The initial 2021 proceeding ended in a mistrial after the original trial judge, Susan Brnovich, agreed with the defense's claim of prosecutorial misconduct. The defendants were set to be retried in August 2023 before Humetawa. Larkin, however, committed suicide days before the retrial commenced.
At retrial, which concluded in November 2023, Lacey was convicted for one count of money laundering, though the jury deadlocked on dozens of prostitution-related charges brought against him. He was sentenced to 60 months in federal prison and a $3 million fine in August of last year for the single conviction. In November, the United States Court of Appeals for the 9th Circuit released Lacey on $1 million bail pending an appeal of his conviction. He still faces a possible second retrial on 34 of the charges for which a verdict wasn't reached at the first retrial, though prosecutors have said they'll await the outcome of the appeals process before proceeding.
At the time of Lacey's sentencing, former Backpage executives Scott Spear and John Brunst were each sentenced to 10 years in prison.
Click here for XBIZ's extensive coverage of the Backpage case.
