On June 19th the FTC filed a fresh motion requesting sanctions against Jason and Eunjung Cardiff.

As alleged by the FTC, the Cardiffs have failed to comply with a filed March 31st contempt order.

This was followed up by an emergency ex-parte application for a TRO, filed on June 23rd.

The FTC’s application was initially filed under seal. It was unsealed via July 2nd court order.

In the application the FTC alleges

The U.S. Department of Veterans Affairs has advised Plaintiff Federal Trade Commission (“FTC” or “Commission”) that a payment of approximately $3 million will be issued – likely before the end of this week – to a business venture Defendant Jason Cardiff controls.

An affidavit filed in support of the FTC’s application revealed details about the payment.

The application presents evidence of Defendant Jason Cardiff’s undisclosed control of a new business (supplying surgical face masks and other personal protective equipment) that is currently generating significant revenue, and which is scheduled to receive a payment of $3 million from the U.S. Department of Veterans Affairs, likely before the end of this week.

The assets of this business and the fact of Jason Cardiff’s control have not been reported to the FTC or Receiver, as required by the Section XIV of the Preliminary Injunction (Dkt. 59), nor has Defendant Jason Cardiff transferred any assets resulting from his new business activity to the Receiver, as required by that Order.

The name of Cardiff’s new business venture was VPL Medical LLC.

Coincidentally, VPL Medical LLC was the subject of an recent ProPublica investigative report.

On a Tuesday in April, J. David McSwane claims to have

called the owner of VPL Medical LLC, a company outside Los Angeles that had gotten a $6.4 million contract from the Department of Veterans Affairs to supply 8 million three-ply surgical masks to hospitals dealing with the COVID-19 crisis.

My call freaked them out, Tim said, and someone at the company had passed my number along to him.

I had called VPL because records showed the company incorporated just four days before it won the VA deal, and it went on to win another $14.5 million no-bid contract the next day from the federal office in charge of the national stockpile.

Its new website featured a photo of the sort of “ear loop” mask the federal government has since branded as ineffective Chinese knockoffs.

The moniker stands for Viral Protection Labs, but the labs exist only in the stock art chosen for the website.

We’ll return to McSwane’s story in a bit.

The VA fund the FTC were concerned about were supposed to be frozen as per a previously granted injunction. This prompted the FTC to act quickly with their TRO application.

The drastic step of issuing the Proposed TRO without notice is necessary because of Jason Cardiff’s repeated lies under oath and violations of the Preliminary Injunction and Asset Freeze, even under the threat of incarceration.

Any notice of this action will almost certainly result in the dissipation of whatever assets are available in VPL accounts.

On June 24th the FTC’s requested TRO was granted. Based on in-camera evidence presented by the FTC, the court found;

There is good cause to believe that Jason Cardiff is violating the Preliminary Injunction by failing to disclose his true role in VPL, and failing to account for assets he has received through that business.

The FTC is likely to succeed in showing that Jason Cardiff controls VPL and that VPL and its assets, including approximately $6 million paid or owed to it by the U.S. Department of Veterans Affairs, are “Receivership Property” as defined in the Preliminary Injunction.

The evidence presented by the FTC to show Cardiff was in control of VPL included email communications between Stacey Barket, a VPL executive and the VA.

Multiple emails that Stacey Barker, VPL’s “VP Enterprise Sales” or “Enterprise Account Executive,” sent between April 8 and May 1, 2020 to officials at the VA about its contract carbon copy “Jason Cardiff” using a “(removed)@vplmedical.com” email address. No other individual associated with VPL is copied on these emails to the VA.

These emails relate to VPL’s vendor information, anticipated delays in VPL’s shipment of masks it was importing from China, and shipment and delivery of those masks to the VA.

Even more tellingly, Ms. Barker stated in an April 28, 2020 email replying to a FEMA representative about a VPL invoice for gowns and goggles, “Cc’ing my CEO on this.”

The only person cc’d was Jason Cardiff, at the “(removed)@vplmedical.com” email address.

Additionally, the FTC presented records showing Cardiff has made

approximately 600 phone calls to Ms. Barker, totaling nearly 2,000 minutes of talk time between March 25 and the end of May 2020, further evidence his control of VPL.

Through his attorney, Cardiff had represented to the FTC that he was only consulting for VPL.

Despite owning the company, VPL’s incorporation documents only list ‘list Bobby Bedi and Edward Jimenez as contacts’.

Bobby Bedi (right) worked for Cardiff at Redwood. According to the FTC, Bedi was a key figure in RengaLife’s launch.

The court went on to freeze approximately $18.2 million, obtained by Cardiff through Biztank Group and VPL.

As part of the granted TRO, VPL Medical was also put under control of the court-appointed Redwood Receiver.

On June 26th VPL filed an ex parte application to intervene and dissolve the granted June 24th TRO.

In their application VPL maintained the charade that Jason Cardiff was just a consultant.

Jason Cardiff is already a party to this action but has an interest in the Disputed Funds because he is a consultant who gets paid by VPL as a consultant.

Otherwise, he is not an officer, director nor is he a signatory on the bank account frozen by the FTC.

Bobby Bedi is the owner of VPL and agrees that he is bound by the Preliminary Injunction.

However, the funds belong to VPL. Mr. Bedi pays Mr. Cardiff as a consultant to establish and manage this company.

The court didn’t buy any of VPL’s assertions and denied its motion to dissolve the TRO on July 2nd.

Permission for VPL to intervene on a limited basis was granted, in order to ‘protect its rights in its assets … to the extent Jason Cardiff is unable to protect VPL’s rights’.

VPL was given a July 3rd deadline to intervene. As at the time of publication they haven’t filed anything.

J. David McSwane’s ProPublica article provides some interesting perspective as this was all going down.

Tim, one of McSwane’s contacts and an almost customer of VPL’s, claims the masks VPL were supplying were provided in Ziploc bags.

Tim believes his deal with VPL was terminated because he

asked too many questions of a company representative — about where the masks were sourced, if they were kept in sanitary conditions and about the company’s credentials.

Upon getting in contact with Bobby Bedi, McSwane was told that Ziploc bags weren’t used to store VPL’s masks.

He dismissed fraud allegations against him and an associate as inevitable hiccups in doing business.

Referencing the ongoing Redwood proceedings, Bedi told McSwane “the FTC was the fraud”.

An attempt to meet VPL and Bedi got as far as rocking up for an appointment at Rock On IT’s offices in California.

We found the door. The sign said “Rock On IT.” He knocked. No one answered. We waited in the running car.

He called the number he had for Cardiff, and the man who picked up said he was in a meeting and had to hang up.

Attempts to contact Cardiff over LinkedIn and text message went unanswered.

Looking forward, the court has scheduled a hearing on the FTC’s June 19th contempt sanctions motion for July 17th.

The Cardiffs have been found in contempt twice now. They escaped prison in the April contempt ruling due to the COVID-19 pandemic.

If found to be in contempt again on July 17th, whether the court will spare the Cardiffs again remains to be seen.


Update July 11th, 2020 – A preliminary injunction was granted against Cardiff and VPL on July 7th.

The show cause contempt hearing has been pushed back to July 24th.