The FTC has opposed the Cardiffs’ latest attempt to access frozen funds, alleging the couple are still actively concealing assets in contempt of court.
The Cardiffs are seeking $20,000 a month as paid salary to Jason Cardiff, or $42,596 a month as paid expenses.
The paid salary is for Cardiff’s work through VPL. The Redwood Receiver has set aside $18,879 so far but won’t release the funds till an agreement is reached between Cardiff and FTC.
The FTC alleges ‘the Cardiffs’ claimed living expenses are unconscionably excessive and insufficiently documented‘.
Even now, additional undisclosed Cardiff assets continue to come to light. On September 28, 2020, just weeks after swearing to the Court that “no  other undisclosed assets exist” … the Cardiffs’ counsel submitted to the Receiver and FTC – but not the Court – a “supplemental disclosure” to the “accounting” the Cardiffs had filed with the Court on September 3, 2020.
That submission revealed, for the first time, (1) sizeable cash transfers from Bobby Bedi to Jason Cardiff in November 2019,6 and (2) a new real estate acquisition by Jason Cardiff in May of this year.
Cardiff’s purchase of real-estate is particularly egregious, as he’s maintained, among others things, an inability to meet mortgage payments on the family home (a frozen asset through the Redwood injunction).
For their part, the Cardiffs claim the purchased real estate was a gift.
In sum, while the Cardiffs extend one hand for a monthly payout of somewhere between $20,000-$42,596 from a Receivership Estate that is currently generating no income, they keep the other hand tucked behind their back by refusing to purge their contempt and only acknowledging an asset when its disclosure is imminent due to a subpoena or the Receiver or FTC ferreting it out.
The Cardiffs’ request for the release of frozen funds, while they are actively defying the Court’s Orders to identify and turn over their assets, must be denied.
As to the requested $42,596 in monthly expenses;
The Cardiffs’ monthly budget of $42,596 dwarfs Jason Cardiff’s $20,000 monthly salary8 and far exceeds what a family of three needs for basic necessities.
Defrauded consumers should not continue funding the Cardiffs’ lavish lifestyle.
In addition, the Cardiffs’ documentation of their claimed expenses consists of their usual self-serving statements devoid of real supporting evidence.
For these additional reasons, their request should be denied.
Last month Jason Cardiff was found in contempt but spared incarceration. This decision was based on the “potentially profitable operation of Virus Protection Labs”.
To date VPL has burned through over $400,000 and failed to generate revenue.
In not so many words, the FTC urge the court to reconsider that decision.
(The Cardiffs seek) to remain in contempt indefinitely and to fund their extravagant lifestyle from the Receivership Estate that needs to be preserved for redress to the consumers they defrauded.
The only thing the FTC and the Court know about the assets available to the Cardiffs outside VPL is that those assets have been sufficient to fund their luxury lifestyle for two years.
Until they show otherwise and while they remain in contempt, they should be denied frozen funds for any purpose.
The Court’s reluctance to incarcerate the Cardiffs is understandable. However, after two years of disobeying Orders requiring an accounting of all assets, the Court should be equally reluctant to remove the only remaining coercive force left in its various contempt Orders.
A decision on the Cardiff’s motion remains pending.
In related news the Ninth Circuit has denied the Cardiff’s appeal on staying proceedings and reversing the granted preliminary injunction.
The Appeals Court writes;
the arguments raised in this appeal are sufficiently substantial to warrant further consideration by a merits panel.
Whether there’s any merit to the Cardiff’s appeal arguments remains to be seen. Stay tuned…