When the child-trafficking drama Sound of Freedom conquered the box office this summer, ultimately taking in more than $242 million worldwide, it was touted as a triumph. Leading man Jim Caviezel, hardly seen since his CBS sci-fi series Person of Interest ended in 2016, proved that he could still command an audience. Tim Ballard, the anti-trafficking activist whose purported rescues of abducted children inspired the film, basked in its hagiographic glow. Director and co-writer Alejando Monteverde, who had once believed this project “would never see the light of day,” witnessed it become a global phenomenon. And conservatives disgusted by woke, godless Hollywood had a piece of mass-market art to rally around, one that called attention to a grave societal ill with a stirring catchphrase: “God’s children are not for sale.”
But there were stumbles along this victory lap. During his press tour, Caviezel continued to spout the kind of QAnon conspiracy theories he has long promoted, which encouraged a right-wing extremist movement to embrace Sound of Freedom as confirmation that an evil cabal of elites has millions of kids snatched off the street every year. (Some of the film’s fans smeared its critics, including myself, as pedophiles.) Monteverde complained that the star’s comments had hurt his work — which was also torn apart by anti-trafficking experts as a grossly inaccurate depiction of the problem, one that could harm real victims.
Then Ballard’s reputation began to unravel, when news broke that he’d been forced out of Operation Underground Railroad, the Utah anti-trafficking organization he founded, before the July 4 premiere of Sound of Freedom. In September, the Church of Jesus Christ of Latter-day Saints, of which Ballard is a member, publicly condemned him for allegedly misrepresenting his relationship with a prominent church elder to further his own business interests. The same week, an internal OUR investigation into sexual misconduct complaints against him came to light; by October, five women had filed a lawsuit alleging he had sexually assaulted and emotionally abused them while they took part in OUR operations. Soon after, Ballard became the subject of a criminal investigation when a former assistant made a sexual assault report to police in Utah. (In a statement, he maintained that the “sexual allegations are false.” Ballard’s legal counsel did not return a request for comment.)
In the film’s tumultuous aftermath, it seems just one player came through unscathed: Angel Studios, the Provo, Utah media company that distributed and advertised Sound of Freedom with unusual promotional models, turning it into a viral sensation. The film’s fans praised Angel for championing a movie they assumed had been rejected or suppressed by mainstream entertainment giants, and were enthusiastic about the opportunities to support their mission of spreading “stories that amplify light.”
Two business strategies made Sound of Freedom a runaway blockbuster: After acquiring the finished film in March 2023, the studio crowdfunded $5 million from supporters to distribute what it touted as a “heroic movie” that will “put a spotlight on the global movement to end the trafficking of minors.” With Sound of Freedom’s release, the studio also launched a “Pay It Forward” ticketing campaign. Customers passionate about the film’s message were informed they could donate tickets for other viewers to claim through Angel’s website.
However, according to two filmmaking partners who have worked with Angel, legal experts, and a review of Angel’s public business records, these popular audience engagement strategies may violate financial regulations, and could invite scrutiny from either the Securities and Exchange Commission or the Federal Trade Commission. The precise mechanics of these operations also offer a glimpse into a burgeoning conservative media empire essentially controlled by one Utah family, a collection of companies that a former partner describes as an “octopus.”
Rolling Stone reached out to Angel Studios, its executives, and its in-house legal counsel multiple times with detailed lists of questions and allegations. All requests for comment went unanswered.
“Angel Studios says, ‘We’re a light-bearing company,” actress and filmmaker Ashley Bratcher tells Rolling Stone. “But every single thing they do, they keep under wraps.”
BRATCHER IS A RECOGNIZABLE FACE in conservative media. She starred in the 2019 biopic Unplanned, based on a memoir of the same name by Abby Johnson, a Planned Parenthood clinic director who left the organization to become an anti-abortion activist. Like Sound of Freedom, it was released by a religious studio, Pure Flix, and exceeded box-office expectations, thanks in part to keen interest from conservative audiences (and a fair amount of controversy). Churches bought out entire showings for their members.
So when Bratcher sought to produce her own movie — a 1960s period piece called Pharma, based on the life of Dr. Frances Oldham Kelsey, an FDA medical officer who blocked approval of a drug later proven to cause severe birth defects — it made sense that Angel Studios came calling. Early in 2022, Frankie’s Story LLC, Bratcher’s production umbrella for Pharma, entered a distribution option agreement with the studio.
“Initially, we were told, it’d be really easy to raise $5 million for you guys, we’re super excited about the project,” Bratcher says. But she and one of her partners, an experienced appellate and entertainment lawyer named Dori Zavala, soon grew suspicious of the complex connections between Angel Studios and the supposedly distinct corporations involved in funding and marketing the film. They learned, in fact, that these other businesses were also run by Angel’s core leadership: the Harmon family.
The Harmons are nine siblings in all, well-known in the LDS church as well as the Utah business community. (The church did not return a request for comment.) Five Harmon brothers are at the forefront of a confusing assemblage of overlapping corporate entities.
First, they occupy executive roles at Angel Studios, which is tightly linked to the Angel Acceleration Fund, a venture capital firm of private investors backing the studio’s projects. Second, Harmon Ventures LLC, a vehicle “indirectly” owned by brothers Neal, Jeffrey, and Daniel Harmon, is the largest stockholder in Angel Studios and owns VAS Portal, a crowdfunding service similar to Kickstarter or GoFundMe. Finally, you have Harmon Brothers, a marketing agency that creates viral ad campaigns (you may remember their commercial for the Squatty Potty, which featured a unicorn that poops rainbow ice cream, or their extended musical ads for Lumē, a line of natural deodorants).
This corporate hydra allows the Harmons at least three different ways to profit from a movie or TV show. First, Angel makes money as any Hollywood studio-and-streamer would, by selling theater tickets and subscriptions. Second, VAS takes a cut of the money raised in crowdfunding (for Sound of Freedom, it claimed six percent off the top, a roughly standard fee for this service, or around $300,000). Third, the Harmon Brothers agency earns fees from Angel-partnered filmmakers who use the company’s marketing services to advertise those fundraising campaigns.
That structuring isn’t immediately clear from the way Angel deals with its partners, Bratcher and Zavala say. In SEC filings for investment offerings on various other Angel-backed projects, VAS is consistently named as the chosen crowdfunding portal, but Bratcher says the Harmons didn’t disclose that they effectively own this company when she partnered with their studio. She also claims she was pressured by Angel to hire the Harmon Brothers ad firm to promote the Pharma crowdfunding opportunity.
“We started to say, ‘Wait, your hand is in every single pot here,’” she recalls. They even wanted the Harmon Brothers agency to have equity in the film. “And we weren’t okay with that.” Rolling Stone reviewed in full the proposed contract, which outlined “Video Production and Partnership” service fees of $160,000 and included a clause for the transfer of a two-percent stake in Pharma to the ad firm. Bratcher’s team declined the pitch, preferring to handle their own marketing.
After that, Bratcher and Zavala took a closer look at the Harmons’ various outfits. “We were freaking out about the integrity of our project being compromised,” says Bratcher. As they prepared to launch their postponed crowdfunding push in early 2023, she adds, “Angel studios started to interfere with the terms of our offering, in the sense that they wanted very beneficial terms for themselves and their Angel Acceleration Fund,” whose board includes another brother, Jordan Harmon. While Bratcher can’t share those exact terms due to a confidentiality agreement, she claims that “accepting their proposal would have given the fund a majority ownership stake greater than any other member of the project,” as well as box-office profits.
“Jordan Harmon said to us, if you don’t change the valuation, and you don’t change the terms of this offering, we will not support you. And that was a big red flag for us,” Bratcher tells Rolling Stone. She was increasingly perturbed by what she saw as a scheme to entice small donors to bankroll projects for the investors in the Angel Acceleration Fund, who are positioned to profit handsomely from their equity in hits like Sound of Freedom while ordinary crowdfunders have their returns capped at a modest level: the original investment back, plus 20 percent. Bratcher says this hierarchy means the VC fund and Angel Studios face little downside when it comes to unprofitable or shelved projects (which don’t repay crowdfunders).
“It is brilliant,” she adds. “I mean, anybody who can get into business with somebody else’s money and have zero risk, wow, you’ve really fooled some people.”
Things didn’t get better when crowdfunding for Pharma began: Bratcher learned that in a few short weeks, Angel had spent “an absurd amount” on Meta ads for it — money that would come directly out of these donations. These costs were an ongoing issue: Bratcher remembers that Jordan initially encouraged her to have Frankie’s Story LLC spend $200,000 to $300,000 on marketing the campaign in order to raise $750,000. (The $160,000 in service fees proposed in the unsigned contract with Harmon Brothers agency would have been in addition to this expense.) Although Bratcher understood the need to advertise the campaign, she was alarmed at the huge sums and fretted that the crowdfunding total shown on Angel’s site would not reflect the cash her production company had on hand after such lavish spending. “It bothered me to say I raised $750,000 [when] that’s not what I have in the bank account,” Bratcher says. “I said, so, are you telling me that the optics around this matter more than what’s actually in the bank account? And his answer was yes. Because then you can go tell people you raised this much money.” (A witness to this conversation, which took place over speakerphone, corroborates Bratcher’s account.)
As the fundraising round came to a close, Bratcher claims, Angel once more pressed her to modify the terms of the offering to significantly benefit the Angel Acceleration Fund. It was the last straw. Bratcher’s team decided to take what they’d raised and cancel their deal. “We were able to terminate it,” Bratcher says, with an exchange of formal letters. (These documents could not be reviewed, as they are part of the settlement agreement, though a subsequent SEC filing by Frankie’s Story confirms that the LLC “terminated and voided Angel Studios’ distribution option” for Pharma “due to breach of contract and fraudulent inducement” in June 2023.) “They’ve gone on record since then and offered to release us because we didn’t raise enough money, which is a very nice spin from their marketing team,” Bratcher says.
The collapse of the tortuous year-and-a-half partnership, Bratcher notes, came as Sound of Freedom was taking off in theaters.
This film unites. Sellouts. I have witnessed standing ovations. I’ve heard reports of complete strangers embracing after #SoundOfFreedom
Elitists divide. @guardian and @washingtonpost are attacking with false labels and conspiracy theories. @CommonSense gave it two stars and… pic.twitter.com/emKDWXoQf3
— Neal Harmon (@nealsharmon) July 8, 2023
THE $5 MILLION RAISED FOR the distribution of Sound of Freedom went directly to Angel Studios — not the filmmakers. The cash was collected through VAS Portal, with more than 6,600 small investors putting up an average of $748.73 each. Angel announced in August, a month after the premiere, that they would receive the maximum return: $120 for every $100 donated. A few confirmed on social media that the studio had delivered these payments as promised.
Yet while Angel made good on those terms, its method for raising money in the first place may have been improper. That’s because Rule 300(b) of the SEC’s guidelines on crowdfunding “prohibits the directors, officers, or partners of an intermediary, or any person occupying a similar status or performing a similar function, from having any financial interest in an issuer that uses the services of the intermediary.” In other words, when you’re raising money for a film, you’re meant to do so through an independent, neutral platform that receives a fee for the service, not one that you operate yourself — and the Harmons control VAS through Harmon Ventures.
Angel Studios reported to the SEC that it has “no ownership over VAS Portal,” and the FAQ page on Angel’s website implies that VAS has no direct overlap with Angel Studios. But the portal is still owned by Harmon Ventures. That vehicle also holds nearly 9 million shares of Angel Studios. The studio and its preferred crowdfunding site therefore have, in a convoluted way, the same leadership and financial interests — an arrangement apparently forbidden by the SEC rule. “They’re paying themselves all the way around,” Bratcher says.
“You’re kidding,” says Mark Roderick, a crowdfunding and securities lawyer who specializes in crowdfunding, when told that the Harmon brothers own millions of shares in Angel through Harmon Ventures, which also owns VAS. He points out that the language of the SEC regulation stipulates that any “director, officer or partner of an intermediary” may not have “a direct or indirect ownership of, or economic interest in, any class of the issuer’s securities.” The Harmons’ control of VAS (Bratcher and Zavala claim that brothers Neal and Jeffrey own at least 75 percent of the company) while maintaining equity in Angel Studios and using the former to raise money for the latter “would be a clear-cut violation” of Rule 300(b), Roderick says. In his work, he’s “seen other funding portals egregiously violating this rule,” though he observes that enforcement tends to be lax.
That doesn’t necessarily mean the Harmons would easily rebuff an investigation from the authorities, should one be opened. Lisa Bragança of Bragança Law, a securities defense lawyer who previously worked as an SEC Enforcement Branch Chief, says the agency tends to “look at the heart of the matter” in such cases and is “not distracted by fancy maneuvering.” The question, in her view, is whether the SEC (or a state-level securities commissioner) has the determination and resources to pursue an investigation. “If the enforcement division gets their eyes on this, I think they’ll be concerned,” she says.
Bragança thinks Angel Studios is more likely to hear from the FTC, regarding their widely publicized Pay It Forward model, which was a sensational success: the studio set a target of 2 million donated tickets for Sound of Freedom, but claims to have received the cash equivalent of 30,645,695 tickets. At $15 per donated ticket, that works out to $459,685,425 — nearly half a billion dollars in sales.
Only a handful of donors noticed the fine print, which clarified that they were not buying tickets at all. In July, several self-identified religious conservatives contacted American Crime Journal about what they saw as suspicious details of the promotion. On the PayPal checkout page, for example, the word “ticket” is replaced with the word “reach” (that is, instead of guaranteeing that a $15 donation covers a ticket, it pays for the “reach” to “one person”). A disclaimer reads, “Angel Studios will make reasonable efforts to use Pay It Forward ticket sales for the audience growth of the intended film or series. However, Angel Studios becomes the owner of all funds upon receipt and may use them at its sole discretion to further the Angel Studios’ mission of amplifying light through impactful stories.” This language left open an obvious possibility — that Angel could use some of this money to meet demand for free tickets while pocketing the rest. The amount the studio collected through this program, it’s worth noting, is practically double the film’s reported box-office take, meaning millions of dollars in donations were not spent on tickets. One source who spoke to ACJ said he thought that in trying to donate two tickets, he and his wife had been “robbed.”
“The FTC has done lots of cases involving supposed nonprofits or charities misleading people about how they are going to use the money they raise,” says David O’Toole, Bragança’s husband and an attorney in her firm with more than two decades of experience working at the agency. (The FTC did not return requests for comment.) “You know, there’s that disclaimer on the donation page, where they say they can do whatever they want with your money,” O’Toole says, but “that is not something that is terribly important to the FTC,” which may nonetheless find that the promotion is misleading as a whole.
What a court case would revolve around, O’Toole explains, is the “net mental impression” of the consumer — and on that front, Angel Studios has been rather brazen in its use of the word “ticket.” Its promotional copy fosters the misleading notion that each $15 donation is used to buy a ticket that will then be used by another person: the text directly above the Pay It Forward button reads, “Provide free tickets for someone to claim and watch at the movie theaters.” Moreover, as of mid-December, you can still complete this transaction for Sound of Freedom tickets, even though the film has been out of theaters for months.
While the Pay It Forward page for Sound of Freedom does not have a comment section, the crowdfunding page does. It reveals the precarity (and trusting nature) of some who felt compelled to give Angel Studios their money. “I’m 73 years old on a limited and fixed income,” reads a comment from June. “I don’t have the money but am so into what Angel Studios is doing and what this film can accomplish. I will come back to the web site and ‘invest’ in this cause. I don’t have a lot of money but would be proud to help in any way.”
“It’s all positioned to target older religious people, and ultra-conservatives, who are like, ‘Oh, we’re helping put good things into the world,’” Zavala says. She worries that many of these people are giving more than they can afford, which “makes it even more egregious that there’s this lack of transparency.” Bratcher and Zavala say that Angel Studios, without their knowledge or consent, even added a Pay It Forward button on a short proof-of-concept film for Pharma that the company hosted on its streaming app. Zavala says it was made to look as if the contributions would go to the creators, but “we never saw any money from that.”
“We never gave them authorization, they just did it,” says Bratcher. “We don’t know where any of that money went, we were never told. Every single thing that they have done has never been transparent. It’s all very, very cloudy.” She, too, sees Angel’s donor base — “your average grandma and grandpa” — as victims of a deceitful business. “Their audience are good-intentioned people who think that they’re supporting a great cause,” she says. “And really, they’re just putting money in the pockets of the studio.”
As they pulled out of their deal with Angel, Bratcher and Zavala also approached other filmmakers under contracts with the studio and say they learned these creatives were financially struggling despite the company’s apparent profitability. “There are creators right now that have done crowdfunds with Angel Studios and are still in the negative — they cannot even begin development or pre-production on their projects, because after the crowdfund they are still in the negative from all their marketing costs,” Bratcher says. An SEC document reveals, for example, that one Angel-partnered production company took out a $1 million loan to cover “crowdfunding expenses” in June 2022. It then held two separate fundraising rounds that raised just $865,030 — not even enough to cover the money borrowed. Requests for comment from these and other Angel-affiliated creators went unanswered.
Zavala calls the Harmons’ overall organization “an octopus” that only gradually revealed itself as she and Bratcher tried to untangle it. “Every time we’d find something else, we’d be like, ‘Of course that’s related.” In negotiations with filmmakers, she and Bratcher add, Angel Studios typically has the upper hand, because religious or conservative message movies can be a tougher sell in mainstream Hollywood. Sound of Freedom, for example, had been dropped by Disney after it was acquired in a merger, then gathered dust for five years before Angel finally picked it up. Director Alejandro Monteverde, who did not return a request for comment, has said he gave up his points on the film — or share of theatrical revenue — to get it distributed by the studio, and is “not going to make one dollar” off its blockbuster performance.
Angel Studios, though, in addition to its box-office windfall, sold streaming rights to the movie to Amazon for an undisclosed sum after a reportedly competitive bidding war. Sound of Freedom arrives on Prime Video the day after Christmas.
FOR NOW, ANYWAY, IT LOOKS AS IF Angel Studios is more concerned with distancing itself from Tim Ballard than the prospect of federal regulators breathing down their necks. The company statement acknowledging the lawsuit against Ballard doesn’t even mention his name. “Angel Studios is aware of the ongoing lawsuits related to parties connected to our film Sound of Freedom,” it reads. “We are waiting for the facts and evidence to emerge. We hope and trust that the legal process will allow the truth to come to light.”
Meanwhile, the studio is busy promoting its latest theatrical releases, including After Death, billed as a documentary about the afterlife. The Pay It Forward page for the film indicates that customers have donated at least $15 million in hopes of providing others the means to see it. When you click the Pay It Forward button, the default donation amount selected is $300. The website informs you that for this amount, “20 People Can Watch” After Death. Curiously, the disclaimer on the checkout page for the Sound of Freedom promotion — the small print that acknowledges not all of this money is going toward tickets, and the company can spend it however they like — is nowhere to be found when you are prompted to enter your payment information for this promotion.
In December, Angel also released The Shift, a dystopian thriller about alternate realities that the studio is advertising as a contemporary retelling of the Biblical story of Job. Ahead of the premiere, the company recruited social media influencers to pitch the film with sponsored posts bearing the hashtags #ad and #angelpartner, in which they allege that “Hollywood hates Angel Studios” and that actor Neal McDonough, who plays the villain of the story, was “blacklisted from Hollywood because of his faith in god.” (McDonough has worked consistently in entertainment since the early 1990s and had recent roles in movies including Sonic the Hedgehog and the latest Resident Evil sequel, as well as the TV shows Yellowstone and American Horror Story.) The “anti-woke” campaign appears to be an effort to seed the kind of rabid culture war narrative that helped turn Sound of Freedom into something “they don’t want you to see,” as some right-wing commentators put it, which likely fueled greater interest in the movie and the Pay It Forward system. Customers have already donated more than $12 million to Angel Studios that will supposedly pay for tickets for The Shift.
While her own disastrous experience with the company, and the perception that it exploits and mistreats creatives, motivated Bratcher to speak to the media, she says she was also unnerved by how the studios’ aggressive marketing for Sound of Freedom turned its fans into a “mob with pitchforks” ready to smear any detractor as a sexual predator or apologist for human trafficking. In her recent Instagram Stories, she has likewise criticized the studio’s apparent effort to make The Shift into another lightning rod in a polarized culture of entertainment. To her, such practices seem cynical and destructive — and may help to distract from what she considers the exploitation of the conservative demographic Angel claims to serve.
“That’s what really ticks me off in this space, and in particular, with this audience that I’ve known really well for a very long time,” she says. “What bothers me so much is when people ignore poor behavior for the better good. And that has been this cloak of protection that Sound of Freedom and Angel Studios has hidden under.” Zavala has come to the same conclusions. “That’s great that you want to see this movie,” she says of the crowdfunding boosters. “But that doesn’t mean people are not taking advantage of you.”