Herbalife Director Linked To Money Laundering Scheme

Reuters reported on Thursday that Herbalife Ltd. (NYSE: HLF) board member Pedro Cardoso had been charged with money laundering by Brazilian prosecutors in 2008 “for allegedly participating in an embezzlement scheme a decade earlier that siphoned 26.7 million Brazilian reais ($10.4 million) from the state government in Espirito Santo.”

According to the report, “Cardoso said in a statement dated this week emailed to Reuters by an Herbalife official that the lawsuit was a private matter dating back to 1998 which had no bearing on his work for the company, and that he was unaware he was being sought in the case.”

"I have received no official notification of any kind with regards to this matter," according to Cardoso and Herbalife declined requests for additional comment while the SEC declined to comment.

“The company is under investigation by the SEC, the Federal Trade Commission, and the Federal Bureau of Investigations after billionaire [William] Ackman [of Pershing Square] began publicly accusing it of running a pyramid scheme that targets minorities, a charge Herbalife vehemently denies,” according to the report.

The Reuters report indicated that Cardoso’s involvement in the embezzlement scheme may have been an indirect one. Cardoso was a partner in a firm that cashed a check drawn on the state government in Espírito Santo, the president of the state government was the individual who led the illegal operation according to officials.

Herbalife traded at $37.29 in the premarket, down 1.5 percent