Jason Cardiff dodges prison, fails to stay Redwood case
Jason Cardiff has once again been called out as a lawyer in a California District Court.
Unfortunately although being found in contempt, Cardiff has managed to dodge prison time.
In an attempt to purge his contempt, Cardiff produced
a declaration by Jason Cardiff and hundreds of pages of bank statements, credit card statements, and spreadsheets of the Cardiffs’ personal finances.
At the September 9th hearing to decide whether Cardiff has purged his contempt, the court found;
The FTC correctly notes in its response to the Cardiffs’ Notice that these documents show no meaningful effort to purge the Cardiffs’ contempt.
The Cardiffs continue to trot out the tall tale that Gerald Cardiff is the source of the First City Credit Union cash, which the Court already previously rejected.
Therefore, according to the terms of the July 24, 2020 Order, the Court should order Jason Cardiff incarcerated until he finally complies with the Court’s Orders.
The court decided not to incarcerate Cardiff, based on the “potentially profitable operation of Virus Protection Labs” – as put forth in a recent joint stipulation.
The joint stipulation, based on the business projections submitted by the Receiver, hopefully permits the Receivership Estate to grow, thereby increasing potential recovery for consumers should the FTC ultimately prevail on its claims, while paying a salary to Jason Cardiff that would permit him to pay his mortgage and replenish the wasting asset of his residence.
The court noted that what does or doesn’t happen with VPL doesn’t change Cardiff being in contempt, but does have the potential to provide additional funds to be put towards recovery.
Thus the court ruled that Cardiff being put to work for VPL was of more benefit to the FTC than incarceration,
so long as VPL’s profits inure to the benefit of the Receivership Estate and a portion of Jason’s salary goes towards paying his mortgage.
Cardiff’s incarceration has been deferred pending periodic reports filed by the Receiver.
The Court wants to make crystal clear that the Cardiffs have not purged their contempt, and if the FTC later uncovers additional funds that the Cardiffs did not disclose, the Court will immediately incarcerate Jason for civil contempt until he truthfully discloses all sources of income.
The Receiver’s first VPL report is due on October 1st, and every 60 days thereafter.
In related news, the Cardiffs have been denied a stay on the FTC’s case.
The pair were joined in the motion by VPL Medical, now under control of the Redwood Receiver.
Pending an appeal filed in the Ninth Circuit, pertaining to the Receiver taking control of VPL, the Cardiffs requested an ex parte stay of proceedings and the granted preliminary injunction.
The court found the Cardiffs’ motion was an “abuse of the ex parte procedures”.
As the Cardiffs should be well aware, lack of good cause to file ex parte is reason enough to deny the application.
Moreover, the Cardiffs do not even attempt to show irreparable prejudice such that they should “go to the head of the line in front of all other litigants and receive special treatment” or that they are “without fault in creating the crisis that requires ex parte relief, or that the crisis occurred as a result of excusable neglect.”
In weighing the competing interests, the Court concludes that a stay of the cross-motions for summary judgment and the preliminary injunction relating to VPL is unwarranted and therefore DENIES Cardiff and VPL’s Ex Parte Application for a stay of proceedings.
Continued abuse of the ex parte application process … will result in the imposition of sanctions.
We’ll continue to check the case docket. Our next update is expected to follow the Receiver’s October 1st VPL report.