PHOENIX — The former chief executive for the now-shuttered classified site Backpage.com was sentenced Tuesday to three years of probation and ordered to pay $40,000 in restitution for conspiring to facilitate prostitution by selling sex ads.
The judge also declined a prosecutor’s request to sentence the company’s former sale director to probation or order him to pay restitution, since he had pleaded guilty to a conspiracy charge.
U.S. District Judge Diane Humetewa commended former CEO Carl Ferrer and sales director Dan Hyer for acknowledging their crime early in the case and for their extensive cooperation with prosecutors in revealing how Backpage operated.
Humetewa said Ferrer “shed light on dark operations in our computer world.” The punishments handed out by the judge were less than what a prosecutor requested.
Ferrer and Hyer were the last defendants to be sentenced in a sprawling seven-year federal case in Arizona against Backpage’s operators. Ferrer still faces sentencing for state money laundering convictions in California.
The former chief executive and sales director were key witnesses for the government against a company founder during the 2023 trial.
Backpage founder Michael Lacey was convicted of a single count of international concealment money laundering and sentenced to five years in prison and fined $3 million, though he remains free while he pursues an appeal. Chief financial officer John Brunst and executive vice president Scott Spear are each serving 10-year sentences for conspiracy and money laundering convictions.
Prosecutors had argued that Backpage’s operators ignored warnings to stop running prostitution ads, some involving children. The operators were accused of giving free ads to sex workers and cultivating arrangements with others who worked in the industry to get them to post ads with the company.
Backpage’s operators said they never allowed ads for sex and made an effort to try to delete such ads by assigning employees to remove them and creating automated tools. Their legal team maintained the content on the site was protected by the First Amendment.
In pleading guilty, Ferrer acknowledged knowing a majority of Backpage’s revenues came from escort ads, conspiring to sanitize ads by removing photos and words that were indicative of prostitution and publishing a revised version of the notices.
In sentencing memos, both the prosecutor and Ferrer’s attorneys say he helped shut down the site through his cooperation. His lawyers say Ferrer provided evidence linking defendants to the criminal enterprise and testified that Backpage’s increase in revenue stemmed mostly from prostitution.
On Tuesday, Ferrer apologized for the harm to victims and said his involvement in Backpage will cause him shame and regret for the rest of his life. “I understand what the company did was wrong and what I did was wrong," Ferrer said.
Hyer has previously acknowledged participating in a scheme to give free ads to sex workers in a bid to draw them away from competitors and win over their future business.
At sentencing, Hyer reflected on his struggle in trying to forgive himself for his actions. “It’s hard to look myself in the mirror,” he said.
Lacey’s first trial in 2021 ended in a mistrial when another judge concluded prosecutors had too many references to child sex trafficking in a case where no one faced such a charge.
Before launching Backpage, Lacey founded the Phoenix New Times weekly newspaper with James Larkin, who was charged in the case and died by suicide in 2023 just before the second trial against Backpage’s operators was scheduled to begin.
Lacey and Larkin held ownership interests in other weeklies such as The Village Voice and ultimately sold their newspapers in 2013. But they held onto Backpage, which authorities say generated $500 million in prostitution-related revenue from its inception in 2004 until 2018, when the government shut it down.
A U.S. Government Accountability Office report released in June 2021 said the FBI’s ability to identify victims and sex traffickers had decreased significantly after Backpage was seized by the government, because law enforcement was familiar with the site and Backpage was generally responsive to requests for information.
