Herbalife pays $123 million to resolve China FCPA offenses
Herbalife Nutrition Ltd.
agreed Friday to pay the DOJ and SEC $123 million in penalties and disgorgement to resolve FCPA offenses in China.
In an internal administrative order,
the SEC charged Herbalife with violating the FCPA’s books and records and internal controls provisions.
The U.S.-headquartered nutrition company agreed to disgorge $58.7 million plus prejudgment interest of $8.6 million.
In the DOJ enforcement action,
Herbalife paid a criminal penalty of $55.7 million and entered a three-year deferred prosecution agreement.
Between 2007 and 2016, Herbalife and wholly-owned subsidiaries in China (Herbalife China)
conspired with others to falsify its books and records and provide corrupt payments and benefits to Chinese government officials, the DOJ said Friday.
According to the SEC,
Herbalife China submitted an application in 2006 to the Chinese government for its first direct selling license, which was ultimately granted for two cities in one province.
To facilitate licensing approval,
Herbalife China provided improper benefits, including payments, to government officials employed by the agency responsible for awarding direct selling licenses in China.
The transactions were falsely recorded and booked, the SEC said.Li and Yang were charged in November 2019 with FCPA and obstruction offenses. Those charges are pending.
Herbalife’s China sales topped $800 million by 2016, or 20 percent of the company’s worldwide sales, the DOJ said.
The company first disclosed the FCPA investigation in January 2017, according to data from FCPA Tracker.The FCPA Blog
https://fcpablog.com/2020/08/28/herbalife-pays-123-million-to-resolve-china-fcpa-offenses/