In this Jan. 10, 2017 file photo former Backpage.com owners, James Larkin, left, and Michael Lacey wait on Capitol Hill in Washington, to appear at a congressional hearing examining the classified site. Larkin and Lacey are on trial in Arizona on federal charges of facilitating prostitution and money laundering in what authorities say was a scheme to knowingly run ads for sexual services. In opening statements on Wednesday Sept, 8, 2021, their lawyers said the site ran legally allowable ads for escort services, but didn’t publish ads for sex. (AP Photo/Cliff Owen, File)
PHOENIX (AP) — A judge declared a mistrial Tuesday at the trial of the founders of the lucrative classified site Backpage.com on charges of facilitating prostitution and laundering money after deciding prosecutors had too many references to child sex trafficking in a case where no one faced such a charge.
Michael Lacey, James Larkin and four other Backpage employees were accused of taking part in a scheme to knowingly sell ads for sex on the site. While prosecutors say the site published many ads that depicted children who were victims of sex trafficking, no one in the federal case in Arizona is charged with sex trafficking or child sex trafficking.
U.S. District Judge Susan Brnovich said that the cumulative effect of the child sex trafficking references made by prosecutors in opening statements and by witnesses for the government “is something that I can’t overlook and will not overlook.”
Before the trial, the judge concluded she would allow evidence showing that people were trafficked using the site, but would not allow prosecutors to linger on the details of the abuse suffered by victims.
“It seemed the government abused that leeway,” Brnovich said. The judge said one government witness testified about being raped more than once, which raises a “whole new emotional response from people.”
While saying she didn’t believe prosecutors had committed intentional misconduct, Brnovich said prosecutors are held to a high standard and it wasn’t their job to to win at all costs.
Lacey and Larkin said the site never allowed ads for sex and used people and automated tools to try to delete such ads. They maintained content on the site was protected by the First Amendment and that the site helped authorities in investigating sex trafficking cases and earned compliments from law enforcement for their assistance.
In all, six former Backpage operators have pleaded not guilty to charges of facilitating prostitution. Of the six, Lacey, Larkin and two others have pleaded not guilty to money laundering charges.
Lacey and Larkin founded the Phoenix New Times, 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 April 2018 when it was shut down by the government.
Prosecutors say Backpage’s operators ignored warnings to stop running prostitution ads, some involving children. They are accused of giving free ads to prostitutes and cultivating arrangements with others who worked in the sex trade to get them to post ads with the company.
Authorities say Backpage employees would identify prostitutes through Google searches, then call and offer them a free ad. The site also is accused of having a business arrangement in which it would place ads on another site that lets customers post reviews of their experiences with prostitutes.
Prosecutors said the moderation efforts by the site were aimed at concealing the true nature of the ads.
The site’s marketing director has pleaded guilty to conspiring to facilitate prostitution and acknowledged he participated in a scheme to give free ads to prostitutes to win over their business. Additionally, the CEO of the company when the government shut the site down, Carl Ferrer, pleaded guilty to a separate federal conspiracy case in Arizona and to state money laundering charges in California.
The judge has scheduled an Oct. 5 status hearing.
In a separate case in state court in California, Lacey and Larkin had previously pleaded not guilty to money laundering charges. Prosecutors allege Backpage’s operators illegally funneled nearly $45 million through multiple companies and created websites to get around banks that refused to process their transactions.
Earlier in the case, a judge threw out pimping conspiracy and other state charges against Backpage’s operators, ruling the charges were barred by a federal law protecting free speech that grants immunity to websites posting content from others. ___
This story has been corrected to say the judge scheduled an Oct. 5 status hearing, not a new trial. ____ Associated Press writer Don Thompson in Sacramento, California, contributed to this report. 7 Pharmaceutical Stocks to Buy For a Healthy Portfolio in 2022
One year ago, investors expected 2021 to be a huge year for pharmaceutical stocks. The bullish perspective was that as vaccines rolled out and the economy reopened, investors would shift from biotech stocks to traditional pharmaceutical stocks.
But the Delta variant has kept Covid-19 top of mind for many investors. While it’s true that some pharmaceutical stocks were part of the vaccine race, other players in the space have not performed as well as was hoped. Case in point, as of October 6, 2021, the iShares U.S. Pharmaceuticals ETF (NYSEARCA:IHE) is up only 9.7% in the last 12 months. And if you bought shares of the fund at the beginning of the year, you have no growth to show for your patience.
There are reasons beyond Covid-19 to consider when assessing the disappointing performance of pharmaceutical stocks. One is the current political climate which is making no secret of its desire to reshape the healthcare industry. And it has the pricing practices of “big pharma” firmly in its crosshairs.
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