Two Herbalife executives based out of China were indicted back in 2019.

One of the executives, who fronted HerbaLife China for over a decade, was also sued for by the SEC.

Both the criminal charges and civil case pertained to Herbalife’s violations of the Foreign Corrupt Practices Act.

Yanliang Li (aka Jerry Li, right), was Managing Director of Herbalife for China since 2007. His accomplice, Hongwei Wang, aka Mary Yang, was Herbalife’s Head of External Affairs.

BehindMLM previously covered
Herbalife’s shenanigans in China
back in 2019. The company got off with a $122 million fine, with the DOJ opting to defer prosecution.

If you’re unfamiliar with the case, here’s a summary from the DOJ;

Herbalife Nutrition Ltd. (Herbalife), a U.S.-based publicly traded global nutrition company, has agreed to pay total penalties of more than $122 million to resolve the government’s investigation into violations of the Foreign Corrupt Practices Act (FCPA).

The resolution arises out of Herbalife’s scheme to falsify books and records and provide corrupt payments and benefits to Chinese government officials for the purpose of obtaining, retaining, and increasing Herbalife’s business in China.

What I didn’t know at the time was, separately, Li and Wang had been indicted and sued by the SEC.

Li’s and Wang’s indictment was filed under seal on October 22nd, 2019.

The indictment was unsealed on November 14th. There are no further substantial updates to the criminal case docket.

Li and Wang are Chinese citizens and reside in China. To the best of my knowledge they
remain wanted by US authorities
.

The SEC’s civil case against Li was filed on November 14th, 2019.

From 2006 to 2016, Li orchestrated a bribery scheme in China, bribing local, provincial, and national government officials to obtain direct selling licenses and curtail government investigations of (Herbalife’s) China Subsidiary’s business practices.

As (Herbalife’s) China Subsidiary’s Director of Sales in 2006 and 2007, and as its Managing Director from December 2007 until 2016, Li directed a scheme to:

(i) bribe officials through payments of cash, gifts, travel, meals, and entertainment;

(ii) falsify expense reports for those payments; and

(iii) circumvent (Herbalife’s) internal accounting controls to conceal the bribes.

Li bribed Chinese Government Officials to obtain licenses and stop government investigations.

In late 2006, (Herbalife’s) China Subsidiary submitted an application to the Chinese government for its first direct selling license in China.

To facilitate application approval, (Herbalife’s) China Subsidiary paid bribes to government officials employed by the China Ministry of Commerce (the agency responsible for awarding direct selling licenses in China), and to local offices of the China State Administration for Industry and Commerce (another government agency that participated in the licensing process).

Li and (Wang) directed the payment of those bribes.

For example, in a Ja

🤖 Quick Answer

What were the charges against the Herbalife executives indicted in 2019?
Two Chinese executives, Yanliang Li and Hongwei Wang, faced criminal indictment and SEC civil lawsuit for violations of the Foreign Corrupt Practices Act. Li served as Managing Director of Herbalife China since 2007, while Wang held the position of Head of External Affairs.

How did Herbalife resolve the case?
Herbalife received a $122 million fine from federal authorities. The Department of Justice opted to defer prosecution, allowing the U.S.-based publicly traded nutrition company to continue operations while complying with settlement terms and regulatory requirements.

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