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Employee Reimbursements Gone Wild

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Numerous Foreign Corrupt Practices Act enforcement actions (Bristol Myers, Eli Lilly, PTC, FLIR Sytems, Sanofi, Novartis, and Avon to name a few) have involved abuse of employee reimbursements.

The most recent example involved the Herbalife enforcement action (see here and here for prior posts) which largely focused on former Herbalife China executives Yanliang Li (a citizen of China and former Managing Director of a Chinese division of Herbalife) and Hongwei Yang (a citizen of China and former head the External Affairs Department of a Chinese division of Herbalife).

As discussed below, the abuse of employee reimbursements in the Herbalife matter is in a league of its own and represents employee reimbursements gone wild as the culpable employees allegedly entertained thousands of Chinese officials including expensive meals, alcohol, karaoke, and luxury gifts and also involved a purported purchase of hundreds of pounds of fruits and vegetables. Further, the government alleged that the culpable employees discussed using fake meal invoices or fake gift invoices to avoid internal audit oversight

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