Two former executives of a Chinese division of Herbalife Nutrition have been charged with participating in a decade-long scheme to bribe Chinese government officials to promote and expand their company in the country, prosecutors alleged on Thursday. Yanliang Li, also known as Jerry Li, was charged by the U.S. Department of Justice with several crimes, including perjury, destroying records, and conspiring to violate the Foreign Corrupt Practices Act. His partner, Hongwei Yang, was also charged with conspiring to violate anti-bribery laws, according to Reuters.
The executives, both 51, currently remain at large. While the U.S. Attorney’s Office does not directly name Herbalife—the multi-level marketing company that agreed to pay the FTC $200 million in 2016, allowing it to avoid being called a pyramid scheme—Reuters reported Thursday that a source confirmed the pair were company employees during the alleged bribery scheme. Prosecutors allege Li and Yang approved “extensive and systematic payments of bribes to Chinese government officials” from about 2007 to 2017 in an effort to expand Herbalife’s business and avoid regulatory scrutiny in the country. During their employment, Li was the head and managing director of the China subsidiary and Yang was the head of external affairs in the same department.
Herbalife has been accused of being a “sophisticated pyramid scheme” due to its reliance on a massive network of independent distributors to sell the brand’s dietary supplements, powdered shakes, and other personal-care products. To settle the FTC probe, the company also promised to “fundamentally restructure” its business to reward distributors based on retail sales rather than recruitment.
Read it at Reuters
