Herbalife Director Wanted by the Law for Fraud in Brazil, Expect a Resignation Today

November 14, 2014

 

In case you missed it last night, it was revealed by Reuters that Herbalife director Pedro Cardoso has been wanted for a $10M embezzlement fraud in Brazil since 2008.

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Cardoso, who apparently lives in Brazil, has said in a statement to CNBC that he had no idea he was being sought in connection to the case.

This Portugese story (worth translating using Google) profiles the Brazilian mob boss who Cardoso is tied to. He appears to be one of the most powerful men in all of Brazil, which leads me to ask why Cardoso is included in 12 people that are sought in this case? While I have no doubt Cardoso and Herbalife will try and distance themselves from this, I’m positive there’s still stones that need to be turned over here.

According to Scott Wapner at CNBC, the company is denying that they knew anything about this. Herbalife also told Scott Wapner that they just found out about the news two days ago, which begs the question: why did Reuters have to break the news? Did the company have any plans on disclosing this?

One of these three scenarios has to be true:

1. Cardoso had no idea (unlikely). If true, it’s official – now he knows. Resign from the board and turn yourself in.

2. Cardoso knew and didn’t tell Herbalife (likely). If true – now Herbalife knows. It looks like Leroy Barnes announced his retirement at the perfect time. Other board members and executives would feel betrayed if this is the case. I suggest they all think long and hard about distancing themselves from Herbalife before the next shoe drops, whatever it is.

3. Cardoso and Herbalife both knew (unlikely). If true – and shareholders weren’t made aware of this litigation while voting on Cardoso, it’s securities fraud.

Nothing would surprise me at this point.

It also happens to be an interesting coincidence that Jose Gratz, the EXTREMELY powerful man that Cardoso is tied to, has ties not only to murdering judges and witnesses – but to money laundering. Could Herbalife be the perfect vehicle for money laundering in and out of Brazil?

Many more questions need to be answered.

I expect that Mr. Cardoso will resign or be removed from his position today, which would make the second Board member in 2 weeks to hit the road. Expect a company statement this morning.

One thought on “Herbalife Director Wanted by the Law for Fraud in Brazil, Expect a Resignation Today

  1. From the State Department’s own website;

    “In Espirito Santo State, a state police investigation and a state parliamentary committee of inquiry initially reported that an informal organization called the “Squad le Cocq” involving police, judicial, and elected authorities–including president of the State Assembly Jose Carlos Gratz–was responsible for the vast majority of organized crime in the state. However, a yearlong investigation by the parliamentary committee failed to prove any of the accusations against Gratz. The legislator was reelected in October, but an election court judge annulled the result on grounds that Gratz had committed illegal acts during his campaign. Press reports indicated continuing activity by organized crime in Espirito Santo. Human rights activists, NGOs, and politicians urged the Federal Government to intervene, and late in the year a federal-state task force began investigations to root out organized crime in the state.”

    Amnesty has this;
    “Among the people exposed in the report were Jose Carlos Gratz, president of the Legislative Assembly of the state and later state governor; Carlos Guiherme Lima, a powerful businessman, and chief of police Walter Gomes Ferreira. Badenes revealed that the three among other things were responsible for a number of political killings, embezzlement of public money amounting to billions of dollars and the subversion of the state judiciary.

    – Gratz was in charge of the tenders of the state and signed false contracts with Lima, who laundered the embezzled money. Ferreira got rid of “irritating” people, “burned” archives and obstructed the effectiveness of investigations. Finally Gratz, as the president of the Legislative Assembly, controlled the judiciary and guaranteed impunity.”

    So this is who herbalife board members keep company with? Death squad enforcers? What else has been going on in the slimy green hallways of herbalife headquarters? I wonder if herbalife is in collusion with criminals like Gratz in some of the other countries they’ve expanded into? Cardoso kept some mighty bad company, I find it impossible to believe that Michael Johnson was unaware of any of this.

    Liked by 1 person

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