Key points
Parties to the Lawsuit
- Plaintiffs: Elf Group LLC and Super Scientific LLC, both Florida vape companies.
- Defendants: Former manager Tzvie Jakob and his wife, Shoshana Sandhaus.
Company Background
- Elf Group was founded in 2022, after Jakob persuaded investors by touting his “exclusive relationship” with Elf Bar.
- The complaint states Elf Bar was owned by U.S.-listed VPR Brands and was one of the hottest brands in the market at the time, though embroiled in lawsuits and seeking partners to expand into the THC sector.
- Super Scientific was established in 2023, with investors injecting over $28 million. Jakob invested no money but was appointed sole manager with decision-making authority.
Key Allegations
- Misappropriation of more than $20 million in company funds.
- Fabrication of a supposed $1 million 7-Eleven order.
- Secretly diverting 8% of the 20% royalties owed to Elf Bar.
- Using company funds to support friends’ ventures and failed projects like “Baddie Bar.”
- Diverting $159,000 in customer payments, and putting his wife on payroll at $60,000 annually for a no-show job.
2Firsts, August 27, 2025—— Elf Group LLC and Super Scientific LLC, both based in Florida, filed suit last week in Miami-Dade Circuit Court against their former manager Tzvie Jakob, accusing him of systematically looting company funds, fabricating deals, and channeling company resources for personal use and friends’ businesses, with alleged damages exceeding $20 million.
Company Background: A Business Built on Elf Bar
According to the complaint, in late 2022 Jakob approached investors Aaron Lebovits and Hershel Henry Herbst, claiming deep ties in the vape and cannabis industries. At the time, Chinese brand Elf Bar was rapidly expanding in global markets. Jakob asserted he had an “exclusive relationship” with Elf Bar management and could secure cooperation.
The complaint reads: “Elf Bar, owned by U.S.-listed VPR Brands, was one of the hottest vape brands on the market (though at the time its trademark ownership was disputed between VPR Brands and Shenzhen IMiracle Technology). While enjoying booming sales, the brand was entangled in lawsuits and urgently needed reliable manufacturing and distribution partners, and was also looking to expand into THC-related products.”
On that basis, investors were persuaded to form Elf Group LLC in December 2022 to handle Elf Bar production, private labeling, and distribution, paying up to 20% royalties to Elf Bar. A second company, Super Scientific LLC, was established in June 2023 as an investment and expansion platform.
Under the agreement, the three shareholders were each to hold 33.3% equity. Lebovits and Herbst contributed more than $28 million, while Jakob invested nothing yet was appointed sole manager, holding full control over operations.
Allegations: Fake 7-Eleven Order, Royalty Diversions, Embezzlement
The complaint accuses Jakob of secretly diverting 8% of the 20% royalties owed to Elf Bar, pocketing long-term gains without investors’ knowledge.
More controversially, Jakob claimed to have secured a near $1 million purchase order from 7-Eleven, leading the company to import large amounts of products. The order never existed, leaving inventory unsold, while Jakob allegedly took kickbacks from suppliers.
The lawsuit further states Jakob funneled company money to support his friends’ ventures, including Selah Beverages and Huka Puff, by funding production, packaging, and shipping—without ever requesting payment. He also invested nearly $500,000 into a female-oriented product called “Baddie Bar,” which failed due to severe quality issues and mass returns.
In direct misappropriations, Jakob allegedly diverted $159,000 in customer payments into his personal credit card and submitted reimbursements for phantom employees. Even as the companies faced financial losses, Jakob awarded himself a $375,000 annual salary and placed his wife Shoshana Sandhaus on payroll for $60,000 annually, despite her never working for the companies.
Legal Claims
The plaintiffs accuse Jakob of breaching partnership agreements and fiduciary duties, alleging breach of contract, fraud, misappropriation, and violations of Florida’s Unfair and Deceptive Trade Practices Act. They are seeking recovery of damages and disgorgement of unlawful gains. The complaint also accuses Sandhaus of knowing participation and aiding and abetting the scheme, demanding both be held jointly liable and reserving the right to seek punitive damages.
Background: The ELFBAR Trademark Dispute
Elf Bar was launched by Shenzhen IMiracle Technology and quickly rose to global prominence as disposable vapes surged in popularity. But the brand later withdrew from the U.S. market following a trademark dispute.
In February 2023, the U.S. District Court for the Southern District of Florida ruled that the ELFBAR mark conflicted with VPR Brands’ “ELF” trademark, ordering Elf Bar products off the U.S. market. IMiracle and its main manufacturing partner Weiboli Technology temporarily rebranded as EB DESIGN to continue operations, while appeals and countersuits over trademark rights continued.
The conflict later spilled into the marketplace. At the CHAMPS Trade Show in Las Vegas in May 2023, VPR exhibited a product branded “ELFBAR” with packaging highly similar to IMiracle’s products, differing only slightly in logo and labeling. IMiracle responded with countersuits and announced plans to seek injunctions against what it called VPR’s “blatant imitation.”
The case is ongoing. 2Firsts will continue to follow developments.
Editor’s Note by 2Firsts
The ultimate outcome of this case remains pending before the court. Viewed in a broader context, it represents one of the many “gold rush” investment stories that emerged during the regulatory shift and rapid expansion of the U.S. vaping market in 2022. The creation of such a substantial “financial black hole” can be traced to the severe information asymmetry among the three key players in the business chain—the brand owner, the operator (the entities involved in the dispute), and the supply chain.
In earlier periods of illicit or unregulated trade, such information gaps were pervasive and often accepted as the norm—gray-market transactions, by nature, relied on opacity. For the two investors in this case, the lack of transparency regarding brand and supplier information left them with little ability to understand the true state of operations, ultimately resulting in today’s dispute.
As the U.S. market continues its path toward compliance, irregular business practices are expected to diminish. Open and transparent operations not only improve the flow of commercial information and safeguard investors, but also foster a healthier environment for reputable companies and brands to achieve sustainable growth.
