How This Founder of Anti-Smoking and Male Enhancement Drugs Company Duped Consumers of $18 Million

Redwood Scientific Technologies founder charged with $18.2 million fraud

The founder of a company known for its anti-smoking aids and male-enhancement drugs is facing fraud charges. Jason Edward Cardiff, the founder of Redwood Scientific Technologies, was arrested last week after being on the run for months, per a MarketWatch report. A release on the Federal Trade Commission’s investigation into the company’s fraudulent activities stated that consumers lost about $18.2 million due to various deceptive operations.

The rise and fall of Redwood Scientific Technologies

Redwood Scientific Technologies is the maker of Prolongz, a male enhancement product, TBX-Free, a homeopathic smoking cessation drug, and Eupepsia Thin, a weight-loss strip. It ran late-night infomercials of its products and made tall claims about the dissolvable oral strips. However, the bold claims about the effectiveness of the products caught the attention of the Federal Trade Commission, and an investigation was launched. The FTC found evidence of false advertising, fake testimonials, and unauthorized billing, indicating a multimillion-dollar fraud by the company and its founder.

At the request of the FTC, a federal district court in California ruled that the California company had made false claims about the efficacy of the drugs and ordered them to halt operations. Furthermore, the federal prosecutors also secured a criminal indictment accusing Cardiff of fraud in early 2022. The prosecutors claimed that Cardiff allegedly charged customers repeatedly for drugs that they never ordered, and he ordered employees to destroy documents the FTC had sought as part of their probe.

The company’s shares plunged 42% to 16 cents following news of Cardiff’s indictment, as per the MarketWatch report. A $20 million deal tied to Cardiff was also canceled after his role was revealed.

Months on the run: Jason Cardiff's escape

According to court documents, Cardiff had left the country before his indictment was finalized. He had sold his house in Upland California and moved to Ireland where he had dual citizenship with his daughter and his wife, Eunjung Cardiff, with whom he had run Redwood Scientific.

Charges against Jason Edward Cardiff

In the FTC investigation, it was found that Cardiff had routinely charged the credit cards of customers who purchased Redwood Scientific’s drugs for strips they never ordered. Later, when the FTC investigators demanded documents about the business, Cardiff allegedly ordered his employees to destroy them. Further, as per the Department of Justice's release, Cardiff is charged with access device fraud, aggravated identity theft, and two counts of witness tampering. 

Despite being under criminal indictment and after Redwood Scientific’s operations were ceased, Cardiff continued to sell shares in the company as an over-the-counter stock and issued statements about its research on refining oral strip technology, as per Securities and Exchange Commission filings.

Cardiff’s arrest

Authorities had a stroke of luck earlier last week, and Cardiff was arrested at the airport as he returned to Los Angeles to visit his ailing 96-year-old father, as per court documents. He sought to be held without bail while he pleaded not guilty. In court documents, prosecutors described his arrest as a long-running cat-and-mouse game that investigators waged as they tried to determine how Cardiff ran his business while he allegedly tried to hide assets and destroy evidence.

Jason Cardiff's financial gains amidst consumer distress

As per the FTC’s investigation, there was evidence that consumers lost $18.2 million to Cardiff’s deceptive marketing. However, the court declined to order compensation due to the Supreme Court’s ruling in the case of AMG v. FTC, which said that it undercuts the agency’s authority to obtain such consumer redress. Thus, consumers may not receive any compensation for the money they lost.

Meanwhile, the investigators found that Cardiff and his family lived the high life, riding in luxury cars like Bentleys, and Porsches and traveling in private jets. They went on lavish vacations and enrolled their daughter in expensive private school tuition. Further, the investigation alleged that Cardiff stashed money overseas and in accounts in his elderly father’s name.