The U.S. District Court for the Central District of California, at the request of the Federal Trade Commission (FTC), on March 1, 2022, ordered a halt to illegal tactics used by Redwood Scientific Technologies regarding the promotion and sale of dissolvable oral film strips as effective smoking cessation, weight-loss, and sexual-performance aids.
The court said that the FTC had prevailed on all 16 counts in its suit against Jason Cardiff, Eunjung Cardiff, Danielle Cadiz, and Redwood Scientific Technologies. The court issued a permanent injunction against the defendants and their company, banning them from selling dissolvable oral film strips directly to consumers, engaging in multi-level marketing, making robocalls, and using negative-option marketing. It also imposed restrictions on the defendants' future conduct related to false advertising, fake testimonials, and unauthorized billing.
- A U.S. District Court in California ordered a halt to illegal tactics by Jason and Eunjung Cardiff, Danielle Cadiz, and Redwood Scientific Technologies involving oral film strips marketed as homeopathic health aids.
- On behalf of the FTC, which brought the suit, the court banned the defendants and their company from selling the products, including via multi-level marketing, making robocalls, and using negative-option marketing.
- Additionally, the court found the company and its owners engaged in many other unfair and deceptive practices.
- Default judgments were also ordered against seven corporate defendants that it says acted in concert with the Cardiffs.
- Despite the fact consumers lost $18.2 million to the company, the court did not order compensation for victims due to a recent Supreme Court ruling that weakened the FTC's authority.
The Players, the Products, and the False Claims
The defendants in the case, Jason Cardiff, Eunjung Cardiff, Danielle Cadiz, Redwood Scientific Technologies, Inc. (California), Redwood Scientific Technologies, Inc. (Nevada), Redwood Scientific Technologies, Inc. (Delaware), Identify, LLC, Advanced Men’s Institute Prolongz LLC, Run Away Products, LLC, and Carols Place Limited Partnership, advertised TBX-FREE, Eupepsia Thin, and Prolongz thin strips as over-the-counter homeopathic drugs.
TBX-FREE was claimed to have an “88% effective rate” for long-term smoking cessation via release of a chemical found in nature that makes you feel like you've had a cigarette. The dissolvable thin strip, Eupepsia Thin was said to help you lose "10, 20, even 100 pounds” without "giving up your favorite foods or adding any exercise. Prolongz, the defendants promised, would lead to “longer lasting sex” and prevent premature ejaculation.
The complaint by the FTC challenges the defendants’ efficacy and proof claims for all three products as false or deceptive. The FTC also says some of the “consumers” who appeared in ads for Eupepsia Thin were actors, not people who had lost weight by using the product. What’s more, those “Made in USA” strips were actually manufactured in China and India.
More Than Just False Efficacy Claims
In addition to finding that the defendants’ health claims for the three products were false or unsubstantiated, the court found they engaged in many other unfair and deceptive practices. Specifically, the court found the Cardiffs:
- Violated the Restore Online Shoppers’ Confidence Act by failing to clearly and conspicuously disclose their auto-ship program to customers who purchased online.
- Unfairly enrolled consumers in auto-ship plans without their consent.
- Failed to honor refund policies and guarantees.
- Used fake testimonials.
- Made false Made-in-the-USA claims
- Made illegal robocalls.
- Made deceptive earnings claims as part of a multi-level marketing scheme.
Despite $18.2 Million in Losses, the Court ordered No Monetary Penalties
However, despite the fact that the FTC presented evidence that consumers lost $18.2 million to the defendants’ deceptive marketing, the court declined to order any compensation because of a recent Supreme Court’s ruling in the case of AMG v. FTC, which undercuts the agency’s authority to obtain such consumer redress.
“We’re pleased the court ruled in our favor as to every count in the complaint and entered such a strong injunction, including bans on several types of marketing,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection in a statement. “Unfortunately, the FTC still hasn’t been given back its full authority to return money to fraud victims, meaning the people hurt by this scheme—which brought in over $18 million—get nothing.”