The Last Page: How the Government Finally Closed the Book on Backpage . com

On a humid Thursday morning this past July, somewhere in the beige corridors of the Department of Justice, a group of federal lawyers found themselves confronting an unusual accounting problem. How does one divide two hundred million dollars among the victims of what prosecutors have called the largest online sex-trafficking operation in American history? The money - seized from bank accounts, cryptocurrency wallets, and shell companies scattered across three continents - represents the final liquidation of Backpage . com, a classified-advertising Web site that began as a scrappy alternative to Craigslist and ended as the subject of a federal racketeering case that consumed the better part of two decades.

The distribution process, overseen by a company called Epiq Global, has all the bureaucratic solemnity of a tax audit combined with the moral weight of a truth-and-reconciliation commission. Victims must file petitions by February 2, 2026, documenting their suffering in affidavits that will be reviewed by investigators who have spent years studying the digital architecture of exploitation. It is, in its way, a perfect encapsulation of how justice works in the twenty-first century: methodical, technocratic, and carried out through Web sites that bear an unsettling resemblance to the platform they are meant to redress.

The irony would not be lost on Michael Lacey, the seventy-five-year-old founder of Backpage, who is currently serving a five-year sentence in federal prison. Lacey belongs to that generation of American journalists who came of age believing that information wanted to be free, and that the democratization of media would inevitably lead to the democratization of society. In 1970, he founded the Phoenix New Times as a response to the Vietnam War and the Kent State shootings, part of a wave of alternative weeklies that sustained themselves by publishing the kind of classified advertisements that mainstream newspapers wouldn't touch: escorts, massage parlors, and what the industry euphemistically called "adult services."

The papers were distributed free, supported entirely by advertising revenue, with the most lucrative ads clustered on the back page - hence the name Backpage, when Lacey and his business partner, Jim Larkin, decided to move their operation online in 2004. The Internet, they believed, would allow them to scale their model infinitely, reaching readers and advertisers across the country without the expense of printing and distribution. What they had not anticipated was that their digital creation would eventually metastasize into something that bore only a passing resemblance to the countercultural journalism they had once championed.

The transformation began in earnest in September, 2010, when Craigslist, under pressure from state attorneys general, shuttered its Adult Services section. Almost overnight, Backpage became the inheritor of a market that generated hundreds of millions of dollars annually. Carl Ferrer, the site's C.E.O. and a former salesman for the New Times, sent an e-mail to his colleagues acknowledging that Craigslist's retreat represented "an opportunity for us." He added, somewhat ominously, that it was also "a time when we need to make sure our content is not illegal."

What followed was a years-long experiment in what might be called algorithmic plausible deniability. According to federal prosecutors, Backpage developed sophisticated systems for sanitizing advertisements that were transparently solicitations for prostitution. Automated filters removed words like "Lolita," "teen," and "barely legal" before republishing the ads, while human moderators edited out explicit references to sexual acts and pricing. The result was a kind of linguistic kabuki theater, in which everyone understood what was being sold but no one could be accused of saying it directly.

The legal strategy was ingenious, if ultimately doomed. For most of its existence, Backpage successfully argued that it was protected by Section 230 of the Communications Decency Act, the 1996 law that shields online platforms from liability for content posted by third parties. A parade of federal judges agreed, ruling that content moderation constituted a form of editorial judgment protected by the First Amendment. Backpage was not creating illegal content, its lawyers argued; it was merely providing a forum for others to express themselves, however crudely.

The company's legal victories, however, came at an increasingly steep reputational cost. By 2012, Backpage was processing an estimated eighty per cent of all online prostitution advertising in the United States, generating revenue that prosecutors would later estimate at more than five hundred million dollars. The National Center for Missing & Exploited Children reported that seventy-three per cent of the suspected child-trafficking reports it received involved Backpage. Critics began to argue that the site was not merely facilitating prostitution but actively profiting from human trafficking, including the exploitation of minors.

The breaking point came in 2017, when a Senate investigation revealed the extent to which Backpage was not simply hosting objectionable content but actively shaping it. Internal e-mails showed that company executives had instructed employees to edit ads in ways that concealed evidence of underage trafficking, removing words that might alert law enforcement while preserving the core commercial message. The Senate report concluded that Backpage had "knowingly facilitated online sex trafficking," a finding that would prove legally devastating.

On April 6, 2018, federal agents seized Backpage's servers and arrested its top executives in a series of coordinated raids. Lacey was taken into custody at his home in Paradise Valley, Arizona; Larkin was arrested at Sky Harbor Airport, returning from a trip abroad. The subsequent trial - actually, trials, since the first ended in a mistrial when prosecutors were accused of inflammatory tactics - revealed the scope of what the government characterized as a criminal conspiracy disguised as a technology company.

The evidence presented by prosecutors painted a picture of an organization that had systematically prioritized profit over the safety of vulnerable individuals. Victims, some as young as fourteen, testified about being trafficked through advertisements placed on Backpage. Internal documents showed that executives were aware that the site was being used for illegal purposes but chose to refine their money-laundering techniques rather than shut down the operation. In one particularly damning e-mail, a Backpage executive complained that banks were becoming reluctant to process payments from the site, noting that "everyone assumes we're a brothel."

Ferrer, the C.E.O., eventually pleaded guilty and agreed to cooperate with federal investigators, acknowledging that "the great majority" of the site's adult advertisements were solicitations for prostitution. His cooperation helped secure convictions against his former colleagues, including Lacey, who was found guilty of money laundering, and two other executives, who were convicted of promoting prostitution enterprises.

The legal victory for prosecutors was comprehensive, and it revealed something troubling about how digital platforms can evolve from legitimate businesses into criminal enterprises through a process of incremental moral compromise. What made Backpage particularly insidious was not that it set out to facilitate trafficking, but that it gradually transformed compliance into performance art. Each modification to an advertisement, each algorithmic filter, each editorial intervention was presented as evidence of the company's commitment to legal operation, when in fact these measures were designed to preserve criminal activity while providing legal cover.

The Backpage case demonstrates how easily a company can slide from operating in legal gray areas to running what prosecutors characterized as a sophisticated criminal conspiracy. The key insight from the federal prosecution was that there is a meaningful difference between genuine compliance efforts and what might be called "compliance theater" - the elaborate simulation of responsible business practices designed to fool regulators, law enforcement, and perhaps even the operators themselves. Backpage's executives had convinced themselves that as long as they were technically following certain procedures, they could ignore the obvious reality of what their platform had become.

The victim-compensation fund announced this summer represents an attempt to address some of these concerns, providing financial relief to individuals who were harmed by Backpage's operations. But it also raises difficult questions about the relationship between justice and restitution in the digital age. Many of the victims were minors when they were trafficked; they are now adults, trying to rebuild lives that were derailed by experiences that are almost impossible to quantify in monetary terms.

The process of determining compensation will inevitably involve the kind of bureaucratic calculus that seems to reduce human suffering to a series of line items in a spreadsheet. How much is a childhood worth? What is the appropriate payment for years of trauma and exploitation? These are not questions that lend themselves to easy answers, but they are the questions that federal officials must now confront as they work their way through thousands of victim petitions.

For Lacey and Larkin, the men who set these events in motion, the reckoning has been both personal and professional. Larkin died by suicide in July, 2023, a week before he was scheduled to stand trial for the third time. Lacey, now seventy-five, will likely spend the remainder of his seventies in federal prison, a fate that would have seemed unimaginable to the young journalist who founded the Phoenix New Times more than half a century ago.

The Backpage case is, in many ways, a story about the unintended consequences of technological disruption. What began as an attempt to preserve the economic model of alternative journalism ended as a cautionary tale about the ways in which digital platforms can amplify both innovation and exploitation. The same technologies that democratized publishing also enabled new forms of criminal enterprise, operating at a scale and speed that existing legal frameworks were not designed to address.

The victim-compensation fund now being administered by the Department of Justice represents an acknowledgment that traditional forms of criminal punishment are insufficient to address the harm caused by digital-age crimes. But it also suggests a broader shift in how society thinks about corporate responsibility in the Internet era. The days when technology companies could claim to be neutral platforms, immune from the consequences of how their products are used, appear to be coming to an end.

As federal officials begin the painstaking process of distributing Backpage's assets to its victims, they are essentially conducting an experiment in restorative justice for the digital age. The success or failure of this experiment will likely influence how future cases involving online exploitation are prosecuted and resolved. In that sense, the last chapter of the Backpage story is still being written, one victim petition at a time.