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

🤖 Quick Answer

What enforcement action did the FTC take against Jason Cardiff regarding COVID-19 masks?
The FTC filed a motion requesting sanctions against Jason and Eunjung Cardiff for failing to comply with a March 31st contempt order, followed by an emergency ex-parte application for a Temporary Restraining Order on June 23rd to prevent a $3 million Department of Veterans Affairs payment to a business venture controlled by Cardiff.

Why did the FTC seek an emergency TRO in the Cardiff case?
The FTC sought an emergency Temporary Restraining Order to block a $3 million payment from the U.S. Department of Veterans Affairs to a business venture controlled by Defendant Jason Cardiff, which was scheduled to be issued before the end of that week.

How was the FTC's application document initially handled?
The FTC's application was initially filed under seal and remained confidential until it was unsealed

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