Jason Cardiff, a California-based lawyer, narrowly avoided jail time on September 9th after a district court judge found him in contempt of court. Cardiff submitted hundreds of pages of personal financial documents and spreadsheets in an attempt to purge his contempt. The Federal Trade Commission (FTC) argued these documents showed no meaningful effort to comply with previous court orders.

The court reviewed Cardiff's submissions and agreed with the FTC that the documents did not demonstrate a genuine attempt to rectify his contempt. The court specifically rejected the ongoing claim that Gerald Cardiff was the source of cash from First City Credit Union, a story previously dismissed by judicial proceedings. Under the terms of a July 24, 2020 order, the court could have ordered Jason Cardiff incarcerated until he fully complied with all outstanding orders.

However, the court opted against immediate incarceration. Instead, it based its decision on a joint stipulation that noted the "potentially profitable operation of Virus Protection Labs" (VPL). This stipulation, influenced by projections from the court-appointed Receiver, aims to grow the receivership estate. Such growth could increase potential recovery for consumers if the FTC ultimately wins its case. The arrangement also permits Cardiff to draw a salary from VPL, allowing him to cover his mortgage and replenish his residence, which the court termed a "wasting asset."

The judge acknowledged that VPL's success or failure did not alter Cardiff's contempt status. Nevertheless, the court saw potential for VPL to generate additional funds for consumer recovery. Therefore, Cardiff's work for VPL was deemed more beneficial to the FTC's objectives than immediate imprisonment. This decision was contingent on VPL's profits benefiting the receivership estate and a portion of Cardiff's salary being allocated to his mortgage payments. Cardiff's incarceration is deferred, pending regular reports from the Receiver. The court stressed that Cardiff has not purged his contempt. Should the FTC discover any undisclosed funds, Jason Cardiff will face immediate incarceration for civil contempt until full disclosure. The Receiver's initial VPL report is due October 1st, with subsequent reports scheduled every 60 days.

In a separate development, the Cardiffs and VPL Medical, now under the Redwood Receiver's control, had their motion for a stay denied. They had sought an ex parte stay of proceedings and a preliminary injunction pending an appeal in the Ninth Circuit concerning the Receiver's control over VPL. The court characterized the Cardiffs' motion as an "abuse of the ex parte procedures." Court rules generally require good cause for such emergency filings, and the court found the Cardiffs failed to demonstrate this.