U.S. prosecutors charged two former executives of Herbalife Nutrition Ltd’s Chinese subsidiary with running a decade-long scheme to bribe Chinese government officials to win business and evade regulatory scrutiny.
The former head of the China subsidiary Herbalife and the former head of the company's external affairs department of it's China subsidiary were charged Thursday (Nov. 14) for their roles in a scheme to violate the anti-bribery and the internal control provisions of the Foreign Corrupt Practices Act (FCPA).
Yanliang Li, aka “Jerry Li,” 51, the former head and managing director of the China subsidiary of Herbalife, was charged with one count of conspiracy to violate the FCPA, one count of perjury and one count of destruction of records in federal investigations.
Hongwei Yang, aka “Mary Yang,” 51, the former head of the external affairs department of the China subsidiary of Herbalife, was charged with one count of conspiracy to violate the FCPA.
“Li and Yang allegedly led a brazen, decade-long corruption scheme, bribing foreign Chinese officials and then covering it up by providing false sworn testimony to the SEC and wiping clean computer files,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.
“Li and Yang, both former top executives of a global multi-level marketing company headquartered in Los Angeles, allegedly approved the extensive and systematic payments of bribes to Chinese government officials over a 10-year period to promote and expand the company’s business in China and to avoid regulatory scrutiny in China,” said U.S. Attorney Geoffrey S. Berman of the Southern District of New York.
“Li and Yang allegedly led a brazen, decade-long corruption scheme, bribing foreign Chinese officials and then covering it up by providing false sworn testimony to the SEC and wiping clean computer files,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.
“Li and Yang, both former top executives of a global multi-level marketing company headquartered in Los Angeles, allegedly approved the extensive and systematic payments of bribes to Chinese government officials over a 10-year period to promote and expand the company’s business in China and to avoid regulatory scrutiny in China,” said U.S. Attorney Geoffrey S. Berman of the Southern District of New York.
“Moreover, in an effort to obstruct the government’s investigation into this widespread corruption scheme, Li lied under oath about the bribe payments when interviewed by the SEC and also destroyed evidence. This case signifies this office’s commitment to ensuring that companies operating in the U.S. do not gain an unfair advantage through corruption and illegal bribes of foreign officials.”
According to the allegations in the indictment, from approximately 2007 through February 2017, Li, Yang and others agreed to pay, and paid bribes to Chinese officials for the purpose of obtaining and retaining licenses for Herbalife to operate as a direct-selling enterprise in provinces throughout China.
According to the allegations in the indictment, from approximately 2007 through February 2017, Li, Yang and others agreed to pay, and paid bribes to Chinese officials for the purpose of obtaining and retaining licenses for Herbalife to operate as a direct-selling enterprise in provinces throughout China.
Li and Yang also are alleged to have paid bribes to influence Chinese governmental investigations into Herbalife’s compliance with Chinese laws and to corruptly influence Chinese state-owned and state-controlled media for the purpose of suppressing negative media reports about the company.
In order to carry out the scheme, Li, Yang and others allegedly obtained reimbursement for the bribes they paid to Chinese officials by submitting false and fraudulent expense claims designed to conceal the true nature of the expenditures at issue, thereby circumventing Herbalife’s internal accounting controls.
In order to carry out the scheme, Li, Yang and others allegedly obtained reimbursement for the bribes they paid to Chinese officials by submitting false and fraudulent expense claims designed to conceal the true nature of the expenditures at issue, thereby circumventing Herbalife’s internal accounting controls.
In addition, Li made false statements under oath in sworn investigative testimony before the U.S. Securities and Exchange Commission in New York, New York.
Additionally, the indictment alleges that during the course of the federal SEC and DOJ investigations Li, with knowledge of these investigations, installed a “Wiping Application” onto his company-issued laptop, which enabled him to erase 200 files from the laptop in a manner that would render the deleted files unrecoverable.
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