About the Author
Rick Koerber is the founder of the Free Capitalist Project. He is an entrepreneur, talk radio host, and opinion leader active in his community and motivated to serve in the cause of liberty. Rick and his family live in Utah County, UT.
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September 8th, 2008 •
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Imagine you’re Annie Bradley, a married stay-at-home mother of eight. Two weeks before your 43rd birthday, its 9:00 pm and you’re sitting down with your husband and two house guests discussing a very difficult topic—the sale of your home. Uncharacteristically, your seventeen year-old daughter interrupts the discussion with a stunned look on her face, informing you that police and federal agents are surrounding your house. An armed Sheriff’s deputy has followed closely behind her and now stands before you asking, “Are you Anna L. Bradley?”
The scene in the Bradley’s neighborhood Tuesday was much like something you might expect to see on the big screen, or read about in one of those hard to believe mystery novels. But for Annie, her husband Randy and their eight children, it was a very real nightmare.
“I begged them not to take her,” explains her husband. He couldn’t understand why law enforcement was at his house in the middle of the night, demanding $10,000 cash for bail, or they were going to be taking his wife. At 9 o’ clock in the evening, when banks and businesses are closed, it’s close to impossible for an average family to come up with that kind of cash.
So, at approximately 9:41 pm, after local agents from the Utah County Sheriff’s office, accompanied by at least two federal agents, had surreptitiously surrounded the family’s home and afterwards made quite a scene for the neighborhood, law enforcement agents placed Annie Bradley under arrest, handcuffed her, and led her the long way across the front lawn, in front of inquiring neighbors, stunned house guests, her confused and bewildered husband, and perhaps most difficult, in front of her sobbing children.
When asked why they were doing this in the middle of the night, with so little opportunity for the Bradleys to even reach an attorney, one member of the Utah County Sheriff’s department replied, “Well, we don’t usually deal with nice folks like you.” Annie was booked into jail and held on $10,000 bail.
Annie Bradley's Arrest Photograph
While the image of her arrest might seem dramatic, the facts surrounding her arrest are even more bizarre. Annie Bradley wasn’t arrested, as it turns out, because she’s suspected of committing some violent crime. The barrage of law enforcement officers didn’t surround her house to execute an arrest warrant because she’s suspected of some kind of drug involvement or some other dangerous crime. Annie Bradley was arrested because she and her husband have been caught up in a political battle related to the Utah Department of Commerce.
In February of this year that Utah Division of Securities Director Wayne Klein resigned under a cloud of suspicion for corruption and mismanagement. Randy and Annie Bradley were one of the cases originally overseen by Klein. Earlier this summer, on July 3rd, an independent audit of the Division was delivered to the State Legislature citing widespread abuses, mismanagement, miscarriages of justice and a government agency rife with internal conflict, lack of leadership and suffering serious internal divisions.
But what does this have to do with Annie Bradley?
Well, let’s start with the basics. A lifelong resident of Utah County, the last year and a half has been an exceptionally difficult time financially for Annie her family. In a situation becoming all too common in America today, with the mortgage market in shambles, and the credit industry in upheaval, Annie and her family are in the middle of an unplanned move. The guests in her home Tuesday night when she was arrested, were negotiating the purchase of several pieces of furniture to be sold along with their house.
The previous success of her husband’s small business Race Holdings, LLC—which had enabled the family to move from Springville just a year and a half ago into their dream home on the west side of Mapleton—has become a thing of the past. With no business income to speak of for most of the past year, the family has been living on food storage, modest financial reserves, and the hard work of the entire family to bring in whatever they can. Randy has recently taken a job working over six hours away from his family, in Montana.
The Bradleys however, are no strangers to hard work or sticking together. Generations of both sides of the family have made a living at hard work in Utah, with no troubles or run ins with the law and no questions about their integrity or reputation. What they are unable to comprehend however is in the midst of these difficult circumstances, why was Annie Bradley arrested, handcuffed and taken from her family in the middle of the night.
The entire Bradley Family
What would cause the Utah County Sheriff’s office, in conjunction with Federal Agents, to surround the family’s home as if they were conducting some kind of undercover sting operation? Why would law enforcement arrest a stay-at-home mother in the middle of the night when it’s almost impossible for the family or friends to reach an attorney or to get access to cash for bail?
The charges made against Mrs. Bradley, according to the affidavits and other documents provided by the Utah Division of Securities allege that Annie was involved in committing securities fraud against her neighbor. The Bradleys dispute the charges. Annie Bradley never worked for her husband’s business and was never an employee or manager of the company.
The neighbor, Mrs. Wendy Hendry, who owns and manages her own real estate related investment company loaned $30,000 to Race Holdings, LLC in June of 2007. The loan from Mrs. Hendry’s company to Mr. Bradley’s company, was a high interest loan charging 36% annual interest. According to banking records the entire loan plus interest and fees was repaid in full by Race Holdings in November of 2007. No subsequent business was transacted between the parties. Annie Bradley had nothing to do with it.
So what were the grounds upon which to make such a dramatic arrest of Mrs. Bradley? Apparently, Annie was arrested as part of a legal strategy related to another case being investigated by Securities Division Enforcement Director Michael Hines under the direction of his superior Ms. Francine Giani the Executive Director of the Utah Department of Commerce. Their plan was evidently to increase pressure on Annie’s husband, Annie’s friends and some of her husband’s former business associates related to another case.
Substantiating the chain of events is a reputable and prominent Utah County securities attorney who has represented clients and worked directly with the Utah Division of Securities for more than a decade. FCD has obtained multiple audio recordings substantiating the shocking reality behind Mrs. Bradley’s arrest, but has been asked not to reveal the identity of this attorney for fear of reprisal and other consequences from the Utah Government.
Apparently Mr. Hines believed that Randy would do “just about anything” to keep his wife out of jail. In the recordings obtained by FCD it is revealed that Mr. Hines’ intention was a strategic decision to implicate Mrs. Bradley regardless of her actual involvement in any suspected wrongdoing, in order to bring pressure on her husband to “turn State’s evidence.”
Hines reportedly explained,
We have to put maximum pressure on people…and if Mr. Bradley can’t provide me information that would help me then we are going to charge them both The information that would help is for Randy to say contrary to that whole affidavit basically, to say he received misrepresentations.
Annie and her Husband Randy Bradley
In the same conversation Annie and Randy were told that if Randy wasn’t able to provide the information he was looking for, Hines intended to follow through with his threat to put Annie in jail. At one point in the conversation Mr. Bradley can be heard asking,
“What if there isn’t any information… I would have to commit perjury to say that.”
The formal audit released to the public after several complaints about these kinds of abuses, explains that obtaining cooperation or even false confessions under the threat of jail time is a “Division Tactic” where investigators attempt “to coerce cooperation by intimidating and threatening that the person would be arrested.”
At one point in the recordings it is revealed that in an earlier conversation with Hines, prior to her company even being repaid, Mrs. Hendry was uncomfortable with Mr. Hines agenda, insisting;
“We don’t care about the money. Let’s just rip up the promissory note.”
Even though Annie was not involved, even though her neighbor apparently did not want to complain against the Bradleys, and even though Race Holdings, LLC did in fact repay the full amount of the loan in question as per the written agreement, Michael Hines had another objective and it required that the case proceed against Annie.
According to Hines, he could charge Annie with a crime based solely on one conversation she had with her neighbor in church one Sunday. Evidently, during a short stretch of time in mid-2007 when her husband’s business had fallen behind on monthly payments Mrs. Hendry approached Annie looking for re-assurance that the debt would be paid. In defense of her husband, Annie reportedly replied, “My husband is an honest man, and he will repay this debt no matter what.”
Annie Bradley, targeted by Michael Hines
That statement, innocently made by a spouse, in a Sunday church meeting, according to Hines, “constitutes an inappropriate statement or omission of material facts, and therefore constitutes fraud.”
The Bradleys are confused as to how Annie’s statement could be considered fraudulent, especially since her husband later did exactly as she had suggested, ensuring that his business repaid the very high interest loan, plus all interest and fees, as agreed. The Hendrys profited, according to FCD calculations, in excess of $10,000 in six months and received a full recovery of principal prior to the note’s maturity.
Answering the question of how such a situation could be construed as fraud, Utah Securities regulator A. Gary Bowen provided a rather lengthy but insightful explanation. He explains:
“People do not understand the nuance of securities regulation. Most attorneys do not…we can go after these people and we have been just overwhelmed by the filings, you get into my office I’ve got them practically stacked up to the ceiling and I’m not making this up and I’ve got them stacked all over the floor so we’re pursuing them…
“I’m going to recommend you look at section 61-1-1 which is entitled ‘Fraud Unlawful’ and you’re going to discover a definition of fraud that your average attorney is going to be totally clueless about…the nuance that the average attorney doesn’t get, whose competent in real estate, competent in corporate or business law, competent in contract law, is the mere omission of a material fact… do you know what the implication of fraud is, criminal prosecution, time in jail!”
Mr. Bowen who according to his own representations has been charged with advising Utah citizens and business owners about how to avoid breaking the law for more than ten years, later admits that its impossible to pin down what might be construed as “fraud” if the government wants to press charges. He continues,
“If you look at our definitions section, I’ve been working for this for years and read it a number of times but it really sunk into me here this summer when I was reading it and talking to someone like you, you go in and read the definition actually under 61-1-13 of fraud, and its one of those things that you say, well, what does that mean? The answer is, I don’t know.”
With a definition like this, its no wonder that Utah has become known by some as the “fraud capitols” of the West. Mr. Bowen’s advise boils down to a simple axiom. If the government thinks it is fraud, its fraud.
Even experienced attorneys, according to Mr. Bowen, can’t understand what the enlightened public servants in the Department of Commerce might allege. Or, in short, all Utahan’s should be very careful when discussing their spouse’s integrity in church on Sunday.
As 2008 rolled around, the Bradleys lived with the daily uncertainty and fear of being charged with fraud as a result of Mr. Hines strategy. It didn’t seem to matter that both parties agreed the loan had been satisfied and that Annie Bradley had nothing to do with it, other than being married to the business owner.
At one point Randy reveals that the stress became unbearable.
“I came close to considering saying whatever Mr. Hines wanted me to say if it meant it would keep my wife out of jail. I decided against it, but I couldn’t trust Hines anyway if he was willing to build another case based upon a lie.”
Resigned. Former Director Wayne Klein
But this past February things started to look brighter from the Bradley’s perspective, when Utah Securities Director Wayne Klein was forced to resign because of scrutiny being placed on the Securities Division for its alleged abuses. The Bradleys along with many small business owners in Utah hoped a new Director would be more just in his oversight of the Division and more effective at reigning in employees like Hines.
Lying, by “any person” during a proceeding under Sate Securities Laws is a 3rd degree felony. While Randy decided against going along with the enticements of Hines, Audit Manager Tim Osterstock’s performance audit of the Division clearly documents that the Division had been engaging in deceptive practices, evidently believing that government employees are exempt from the requirements of the law.
“The division has, at times, violated the terms of its settlement agreements. In one case, the division agreed to not publicize the action or commence further administrative actions and then violated both terms of the agreement. The person accused told us he felt compelled to plead guilty to a lesser criminal charge rather than place his business in jeopardy defending a greater charge. The division agreed to not seek additional charges but nevertheless pursued an administrative action. The respondent then signed the settlement agreement after the division agreed to not publicize it. However, the day the settlement was signed, the division publicized the information on its web page and also published the information in its newsletter the following month.”
The audit also revealed that the Division made false allegations against innocent businessmen as part of its coercive tactics, obtained false confessions and false settlements by threatening citizens with arrest and jail time, and that the State of Utah had been violating its own legal settlements with impunity while Department employees escaped criminal investigation for such activity that clearly violates State law.
With this information now public, the Bradleys anxiously waited for the government to take action to reform the Department. They also continued to correspond regularly through their attorney with the Division of Securities and specifically with Securities Division attorney Scott Davis who works for the Utah Attorney General’s office.
Mr. Davis corresponded multiple times with the Bradleys about resolving the civil concerns raised by the Division, but never informed the Bradleys that they were in eminent danger of being arrested or criminally charged. Things seemed to be looking better for the Bradleys, and they were hopeful they could soon put this troubling ordeal behind them.
Then, out of the blue, new rumors began circulating of the Bradley’s pending arrest. The rumors came from the most unusual of places. For some unexplainable reason in early August of this year, Mr. Hines called Ron Hendry and explained that the Bradleys were being charged criminally and would soon be arrested.
“I didn’t know what to make of it,” said Randy about the phone call from Hines to Hendry. Mr. Hendry subsequently began sharing the information with other Bradley neighbors including their religious leaders.
Although the Hendry’s had profited handsomely from their transaction with Race Holdings, Mr. Hines, in very questionable legal territory, evidently had some reason for giving them a “heads up.” As it turns out, Hines had told the Hendreys that they were witnesses, as victims, in the now criminal case against both Randy and Annie.
Hines, according to Ron Hendry, had been in contact with them seven our eight times throughout the months of June and July. During this same time, the Bradleys unsuspectingly continued to hope things were getting closer to being resolved.
When Randy received a surprise phone call from his local Bishop asking about his pending arrest, he wasn’t sure if Ron Hendry was just spreading gossip, or if the strange collaboration between he and Hines were actually fact. So, through their attorney the Bradleys went straight to the government. They contacted Scott Davis of the Utah Attorney General’s office. Randy explains,
“I thought we were working things out. Through our attorney we were in regular communication with the State. They are the ones who postponed our last meeting. Through our attorney we contacted the Attorney General’s office and Scott Davis, the man we were told was the attorney for the Division and he acted surprised and claimed he knew nothing about any criminal charges. He acted completely embarrassed and didn’t seem to know what Michael Hines was up to.”
Huntsman Appointee, Executive Director of the Utah Department of Commerce, Francine Giani
Seeking to defend herself and her Department, once the audit was released, Francine Giani publicly insisted that her Department had taken all necessary corrective action. However, one of the major indictments in the audit was that Giani’s staff was repeatedly in violation of Utah State law related to how the State’s lawyers from the Attorney General’s office were being ignored as the Division pursued its own agenda. The audit reads in part,
“[S]taff from the AG’s office are assigned to represent the division. Securities law states “The attorney general shall advise and represent the division and its staff in all matters, administrative or judicial, requiring legal counsel or services in the exercise or defense of the division’s power or the performance of its duties” (Utah Code 61-1-21.5). There have been conflicts with both how the former director utilized the attorneys representing the division and the level of authority the attorneys should have in defining division activities. In some cases, it appears the former director assumed the role of the attorney.”
Despite the Attorney General’s office claiming that they knew nothing about criminal charges or arrest warrants, to the shock of Annie, Randy, and their attorney, such warrants were indeed issued. Randy was arrested on August 29, 2007.
After Randy’s arrest he worried that his wife would be next. Through their Attorney, the Bradleys made an agreement with prosecutors that with Randy voluntarily returning from his job in Montana, surrendering to the Utah County Sheriff’s office, and providing the required $10,000 bail, the warrant for Annie’s arrest would be withdrawn. A few short days later however, local and federal agents were surrounding the Bradley’s home and in almost no time, Annie was in jail.
“I told them that we had already taken care of things,” says Randy.
“I begged them not to take her. I explained that the prosecutor had agreed to release the warrant for Annie’s arreset since I cooperated and posted $10,000 bail. The Deputy told me that he believed me, but since I had nothing to prove it, there was nothing he could do. I wasn’t angry at the Sheriff’s office, they were professional and doing what they were supposed to do. But, who is going to stop Michael Hines from ruining people’s lives while he does whatever he wants? That is what makes me so angry. He doesn’t care about my wife, my kids, or our family.”
Annie and Her Two Daughters
So, how and why was Annie arrested so dramatically this past Tuesday night, even after the prosecutors had agreed to release the warent for her arrest? Why didn’t the government follow the usual procedure when dealing with reputable citizens, not charged with violent crime, having no past criminal history, and just deliver a “Summons to Appear?” Evidently, that wouldn’t work for Mr. Hines strategy.
Annie Bradley was arrested because Randy and Annie had the courage to resist Mr. Hines for almost a year. That, evidently, is just not acceptable to the State of Utah, Department of Commerce.
It’s not just the Bradleys who have had to make this tough choice. The pattern of unjust enforcement by the Division of Securities is revealed unmistakingly in the formal audit results, but Ms. Giani and her boss Utah Governor Jon Huntsman Jr., have neglected to address the gravity of the situation. Certainly, Ms. Giani and the new Securities Director Keith Woodwell have failed to reign in Hines and others engaged in the abusive practices.
The actual truth related to Annie Bradley’s arrest might have never come to light except that a number of individuals, attorneys, businessmen and even Department of Commerce employees have grown weary of this unchecked abuse and have begun using audio recording’s to try and help document this behavior.
The recordings obtained by FCD are a collection from multiple sources, and cover a multitude of cases. These recordings, and hopefully others yet to be provided to FCD by interested citizens, are beginning to serve as a powerful tool to provide critical insight and political leverage to address this rogue government agency reeling from criticisms, rife with internal conflict and desperate to cover-up its own current and past misdeeds.
Nevertheless, some bureaucrats can’t seem to understand how persecuting small businessmen in Utah (and their wives) is the same as persecuting normal families. Some government officials can’t seem to understand how unjust it is to have a government agency justify their supposed administration of justice with lies, cover-ups, excessive force, coercion and deceit.
Annie Bradley’s arrest is one more revelation in a series of events alerting Utahan’s to the very real consequences of a corrupt government agency, the conduct of malicious bureaucrats and an incompetent government appointee—Francine Giani—who seems more worried about the appearance of “protecting investors” than she is about following Utah’s laws and protecting all Utah citizen’s civil rights.
The Bradleys have now had to come up with $20,000 cash bail so that they could continue remain free to take care of their family while continuing their fight against a corrupt government investigation. This amount pales in comparison to the mounting legal costs they’re incurring in a legal circus that could last many more months if not years.
But, instead of heaping added difficulty on their heads, the State of Utah should be issuing the Bradleys a sincere apology as part of its first step to clean up the seriously damaged reputation of the Utah Government. We should all be grateful for families like the Bradley’s that stand up to corruption, that work constantly to provide a good life for their children, that conduct an honest business, and do all they can–even if they’re late on payments—to always pay their personal and business debts as agreed.
“This has probably been the most difficult emotional thing that has ever happened in our lives, but we’re going make it through,” says Randy, soberly. “Annie has said that if this is what it takes so that someone will finally put a stop to people like Michael Hines, its okay, I’m okay with it.”
In the face of America’s current economic difficulties it seems like the Executive Branch of Utah’s government has somehow forgotten the virtue of families like the Bradleys and the responsibility to protect all Utah citizens equally. It is, after all, small businessmen and women, along with their families, who regularly take risks and assume responsibilities that creates more jobs, deliver more services, and add more value to our community than any government appointee and her bureaucrats.
Despite Mrs. Giani’s public assurances, there is an obvious problem in the Utah Department of Commerce. Evidently this problem extends all the way to the head of the Executive Branch into the office of Governor Jon Huntsman.
Despite calls by numerous state legislators for the removal of Ms. Giani and several of her remaining staff; and despite the multitude of problems revealed in the recent performance audit of her Department; and finally despite even the personal appeals made directly to him from Utah’s own Attorney General for her firing, Governor Jon Huntsman (who is the only elective oversight provided by State law over Francine Giani) seems to share the philosophy of Giani and Hines, namely, that innocent people being wrongly accused is simply a price Utahans should get used to paying if they expect the government to do its job.
That’s an interesting theory of government. No matter how nice, pleasant or polite Governor Jon Huntsman, Jr. comes across — there is no mistaking that he was not elected to simply look good in office. Hard decisions sometimes have to be made, and in this case, when dealing with the Department of Commerce, the direct action that needs to be taken just isn’t that hard to discern.
Tyranny, at any level, only works for so long. What is happening in the Utah Department of Commerce is wickedness; there is no way to skirt around the issue. A full audit of all divisions within her stewardship will reveal even more succinctly that it is time for leadership in the Governor’s office, in the legislature, and in the judiciary in dealing with abuses like the Giani’s absurd, forceful, and dramatic arrest of Annie Bradley.
This problem will come to a head and the unjust, and in some cases criminal, activity of government bureaucrats along with the startling incompetence of executive management in the Department of Commerce will ultimately cost some politicians and employees their jobs. Someone with courage will ultimately step forward to address and correct the very serious problems.
In the mean time however, the dirty politics and renegade operations of the Utah Department of Commerce will ensure that more Utah families like the Bradleys will be trying to explain to their small children why mommy or daddy was dragged away in handcuffs, in the middle of the night.
It just doesn’t seem like America.
The Bradleys
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