Court data present the federal authorities gave $20 million in contracts to an organization partly managed by a person with a historical past of shady enterprise practices.
This article was first revealed on Thursday, July 9, 2020 in ProPublica.
By J. David McSwane
Desperate to accumulate masks to sluggish the unfold of the novel coronavirus, two federal companies gave almost $20 million in contracts to a newly fashioned California firm with out realizing it was partly run by a person whose enterprise actions have been below sanction by the Federal Trade Commission, court docket data present.
On Tuesday, a U.S. District Court choose froze the corporate’s belongings, most of which had come from the Department of Veterans Affairs in a $5.four million masks deal. A narrative by ProPublica revealed Jason Cardiff’s position in working VPL Medical LLC in June.
Cardiff was sued by the FTC in 2018 in reference to an alleged fraudulent scheme involving smoking cessation strips and male sexual enhancement drugs and was below court docket order to report his revenue to a receiver. Cardiff was just lately held in contempt for violating that court docket order. By not disclosing his involvement with VPL, court docket data allege Cardiff was primarily hiding info from the FTC about cash his firm was getting from one other federal company, the VA.
California enterprise filings present that VPL was integrated simply 4 days earlier than it received the VA deal in April, and it went on to win a $14.5 million no-bid contract the following day from the federal workplace in control of the nationwide stockpile. Those filings don’t point out Cardiff as an organization proprietor. The FTC alleges in court docket data that Cardiff and a accomplice, Bobby Bedi, have been equal companions and had every paid themselves not less than $420,000 from the VA cash.
In May, when ProPublica requested VPL officers about Cardiff’s position, Bedi mentioned Cardiff was “a consultant.” In a latest submitting, the court docket receiver mentioned that characterization “strains credibility” and included images of an organization organizational chart exhibiting the 2 co-leading VPL.
When the VA signed the VPL deal, the company had been instructed by an organization consultant that Cardiff was the CEO of the corporate, in keeping with emails included within the FTC’s newest court docket filings.
That VPL consultant, Stacey Barker, was paid greater than $257,000 for serving to to shut the VA deal.
While the corporate isn’t on the checklist of banned federal contractors, a fast Google search reveals Cardiff had been repeatedly accused of fraudulent schemes.
The legal professional representing Cardiff and VPL, James B. White, argued that the FTC filings are the company’s notion, not the reality, and mentioned company filings don’t embrace Cardiff’s identify.
“What I’m suggesting to you is that is not the only interpretation of the documentary trail,” White instructed ProPublica. “Is it not possible in your world that the payments to Mr. Cardiff were for a consultancy?”
The VA, which has struggled to offer protecting gear to medical staff on the largest hospital system within the nation, mentioned the corporate efficiently offered eight million surgical masks. VPL has but to ship below its separate contract with the U.S. Department of Health and Human Services, in keeping with the corporate’s lawyer and court docket data.
The federal authorities and states have fueled an unregulated, chaotic market for masks dominated by oddballs, ganjapreneurs and a shadowy community of traders.
Cardiff and Bedi didn’t reply to requests for remark. A VA spokeswoman mentioned VPL met primary standards for a contract award.
“If you have concerns about the federal laws governing the federal contracting process, you should direct them to the relevant congressional committees of jurisdiction,” mentioned the spokeswoman, Christina Noel.
In 2018, the FTC sued to close down Cardiff and a special firm operated by him and his spouse, describing it as a pyramid scheme. It alleged that the agency concerned robocalling folks and making “false and unsubstantiated claims for dissolvable film strips advertised for smoking cessation, weight loss, and male sexual performance.”
A federal court docket issued an injunction, shutting down the Cardiffs’ enterprise and freezing their belongings. In March, Cardiff was present in contempt of court docket for, amongst different issues, hiding 1.5 million Canadian (about $1.1 million) in belongings. The case is ongoing, with the newest injunction freezing VPL belongings.
The FTC alleged that Cardiff was funding a lavish way of life via an account he had opened within the identify of his 90-year-old father.
“The Cardiffs are spending nearly $17,000 per month,” court docket data state. “On Bentley, Porsche, and Range Rover lease payments, private elementary school tuition, restaurants, phone and cable bills, salons and spas, pet grooming, a 5-star hotel in New York City, music lessons, taekwondo lessons, ride shares, movie theaters, and other lavish expenditures.”
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