DOJ charges former Herbalife execs with FCPA conspiracy and obstruction
The Justice Department
Thursday charged two former Herbalife executives with bribing Chinese officials for ten years and covering it up by lying to the SEC and destroying evidence.
Jerry Li, 51, a Chinese citizen,
was the former head and managing director of Herbalife’s China subsidiary.
The DOJ charged him with one count of conspiracy to violate the FCPA’s internal controls provisions, one count of perjury, and one count of destruction of records in federal investigations.
His Chinese name is Yanliang Li.
Mary Yang, 51, also Chinese, formerly
ran the external affairs department of Herbalife’s China subsidiary.
She was charged with one count of conspiracy to violate the FCPA’s internal controls provisions. Her Chinese name is Hongwei Yang.
An indictment filed in New York City
alleged that for ten years starting in 2007, Jerry Yang and co-conspirators bribed Chinese officials to obtain licenses for Herbalife.
The company sells dietary supplements through multi-level marketing.
Other bribes
were intended to stop Chinese government investigations into Herbalife’s operations in China and suppress negative coverage of the company by Chinese state-owned media outlets.
By 2016, Herbalife’s China sales topped $800 million, or 20 percent of the company’s worldwide sales, the DOJ said.
In the United States,
Herbalife agreed in July 2016 to pay $200 million to settle FTC charges that it deceived customers about how much money they could make selling Herbalife products.
The company also agreed to restructure its U.S. business operations.
The FCPA Blog