Herbalife, a Los Angeles-based health and nutrition company, bribed Chinese government officials for a decade to grow its overseas business and falsified accounting records to cover up the payments, US prosecutors said Friday in announcing corruption charges against the publicly traded company.

Herbalife agreed to pay combined penalties of more than $123million to resolve the charges, federal prosecutors said.

The company admitted to the conspiracy as part of a deferred prosecution agreement it reached with the Justice Department and the U.S. Attorney’s Office in Manhattan.

The charges were brought under the Foreign Corrupt Practices Act, which prohibits bribery of foreign government officials or company executives to secure or retain business.

Herbalife did not immediately respond to a message seeking comment.

Company officials began paying off Chinese government officials in 2007 in a bid to obtain licenses from national and local authorities the company needed to sell health and nutrition products.

The above undated file photo, shows the Herbalife logo. The Los Angeles-based health and nutrition company bribed Chinese government officials for a decade to grow its overseas business and falsified accounting records to cover up the payments, US prosecutors said on Friday

They also bribed a state-owned media outlet ‘for the purpose of removing negative media reports about Herbalife China,’ prosecutors said.

Herbalife falsely recorded the improper payments as ‘travel and entertainment expenses,’ prosecutors said.

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Herbalife has long been embroiled in litigation and regulatory actions over its business practices, which have been compared by some to a pyramid scheme.

Prosecutors said the company also agreed to pay more than $67million in disgorgement – repayment of ill-gotten gains – and prejudgment interest to the Securities and Exchange Commission.

In 2016, Herbalife agreed to restructure its US operations and pay $200million in a settlement that marked the end of a two-year investigation.

While the Federal Trade Commission stopped short of labeling Herbalife a pyramid scheme, then-FTC Chairwoman Edith Ramirez had harsh words for Herbalife and said it would ‘have to start operating legitimately’.

Herbalife was trading at slightly less than $50 a share just before the closing bell on Wall Street on Friday

Herbalife was structured so that members bought nutritional supplements in bulk directly from the company, before selling them off to others in order to turn a profit.

While members received bonuses for recruiting others, the money only kicked in after thousands of dollars in supplements had already been purchased.

Under the settlement, Herbalife must rework the way it pays its salespeople, after complaints that the company sold a false promise that they could quit their jobs and earn thousands of dollars a month.

Instead, the FTC found that half of the sales leaders received less than $300 in 2014, and many others invested an average of $8,500 in the Nutrition Club brand, with the majority of 57 per cent losing money or breaking even.

‘This settlement will require Herbalife to fundamentally restructure its business so that participants are rewarded for what they sell, not how many people they recruit,’ Ramirez said in a statement.

‘Herbalife is going to have to start operating legitimately, making only truthful claims about how much money its members are likely to make, and it will have to compensate consumers for the losses they have suffered as a result of what we charge are unfair and deceptive practices.’

The FTC did not charge Herbalife with operating a pyramid scheme, and then-CEO Michael Johnson declared the FTC ruling a victory.

The $200million settlement compensated Herbalife consumers, although the details have not yet been established by the FTC.

Herbalife has become a proxy battlefield for major Wall Street players taking opposing sides, some shorting the company’s stock believing it would collapse, while others bought huge caches of Herbalife shares.

In 2012, hedge fund manager Bill Ackman accused Herbalife of being a pyramid scheme, but he wrongly predicted that the company stock would tank

One of the most vocal supporters has been activist investor and billionaire Carl Icahn, who built up an 18 per cent stake in the company after it came under assault from hedge fund manager Bill Ackman in 2012. 

Herbalife was trading at slightly less than $50 a share just before the closing bell on Wall Street on Friday. 

A number of Wall Street heavyweights, from George Soros to Michael L Gordon, at some point took sizeable positions in Herbalife against Ackman.

In late 2012, Ackman excoriated Herbalife with a three-hour, 342-slide PowerPoint presentation to argue the company was a scam and a pyramid scheme.

Herbalife shares tumbled 12 per cent before the presentation when word leaked that Ackman was shorting the shares, which would lead to huge profits if they fell.

After the presentation, shares plunged another 10 per cent.

For quite some time, however, that day in late 2012 has appeared to have been something of an apex for Ackman and his bet against Herbalife.

As other major investors took opposing positions, Herbalife not only recovered, but its shares were reaching all-time highs, a catastrophe for pussy licking Ackman who was publicly forecasting the company’s complete collapse. 

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