PHOENIX — Backpage.com co-founder Michael Lacey has been released from federal prison on $1 million bail, pending the appeal of his conviction for money laundering.
As XBIZ reported, in August, Lacey was sentenced to 60 months in prison and fined $3 million by U.S. District Judge Diane Humetewa.
Last week, the United States Court of Appeals for the 9th Circuit granted Lacey's request for bail and sent the case back to Humetewa to set the amount and conditions, reports Elizabeth Nolan Brown of Reason.com.
The 9th Circuit's decision stated, "Lacey has shown that his appeal raises a 'substantial question' of law or fact that is 'fairly debatable' and that, if determined favorably to him, is likely to result in reversal on the single count of conviction."
At the time of Lacey's conviction, his co-defendants, former Backpage executives Scott Spear and John Brunst, were each handed 10-year sentences. Their requests for bail to the 9th Circuit were both denied.
"Brunst and Spear have not shown that their appeals raise a 'substantial question' of law or fact that is likely to result in reversal or a new trial on all counts of conviction, or a sentence with a term of imprisonment less than time served plus the expected duration of the appeal process," the court noted.
Arizona journalist Stephen Lemons, who has covered the case extensively for Lacey-aligned online publication Front Page Confidential, writes that Lacey's appeal "raised several issues, including the fact there was no concealment in the 2017 transfer of money to Hungary that resulted in the charge against him. Lacey filed timely notices with the government and paid all relevant taxes on the funds."
Brown called the bail decision "good news for anyone who cares about free speech and about justice, considering the complete civil liberties nightmare that Lacey's prosecution has been."
Lacey was originally charged along with five associates. Two were acquitted, while Lacey's business partner, Jim Larkin, committed suicide in July of last year.
The controversial case, originally launched by the Justice Department in 2018, contended that Backpage.com facilitated prostitution. During sentencing, Lacey was referred to by prosecutors as the "don of a criminal family" and "the same as a drug kingpin."
Though Lacey was convicted of only the single charge of money laundering, he could still be retried on 34 outstanding charges for which no verdict was reached. According to Lemons, however, prosecutors have indicated that they will wait for the outcome of the appeals process before proceeding on such a retrial.