Herbalife 'presidents' in alleged HK$50 million direct-selling scam
PUBLISHED : Wednesday, 18 February, 2015, 12:49am
UPDATED : Wednesday, 18 February, 2015, 2:19am
Timmy Sung [email protected]
Alleged victims of the scam, who say they invested money only to see two fraudsters disappear with it, at Legco yesterday. Photo: Sam Tsang
More than 60 people have said they fell for a direct-selling scam after two women who claimed to be "presidents" of multinational nutrition firm Herbalife allegedly disappeared with HK$50 million.
The alleged victims claim the two saleswomen, surnamed Choi and Ng, persuaded them to hand over cash to buy discounted products from the company.
Choi and Ng said they had registered and paid a membership fee to sell the products.
"Investors" were allegedly told that they stood to make a profit of between 5 and 10 per cent. They were also assured the "investment scheme" was risk-free because the so-called presidents had a massive sales network.
Herbalife insisted it had nothing to do with the actions of Choi and Ng and added it was "shocked" and "appalled" to hear of the case. The company said it had ended their membership.
One of the victims, Tiffany Chan, lost HK$240,000 in just two months. She started investing in December after a friend said she had been making a profit.
She earned money at first and then transferred more money to one of the saleswomen. Chan hit out at Herbalife, saying: "It is not a matter of whether the amount is big or not, but a question of integrity.
"How could you, a global company, allow your presidents to use the name of the company to cheat individuals."
Another victim, who only gave her surname as Tsang, said she had lost HK$2.6 million after being approached by one of the women about two years ago.
"I believed she was a president of the company. Herbalife's office had her photo," Tsang said.
It is understood members at Herbalife's Hong Kong office could be promoted to the "President's Team" depending on their sales performance.
A staff member at the Hong Kong office, who spoke on the condition of anonymity, said members were told they could not claim to be employees.
A Herbalife spokesman added: "We have been given the impression through the complaints received that the name of Herbalife may have been misappropriated in relation to an alleged investment scheme … The perpetrators of this alleged crime are not and never were Herbalife employees."
He added the company never received any of the money paid by the alleged victims.
But Civic Party lawmaker Claudia Mo Man-ching, who is assisting the alleged victims, said Herbalife should shoulder some blame for their losses. "Herbalife, as a multinational company, should take some responsibility. We are talking about business ethics … You can't just say some members had inappropriate practices and you have nothing to do with it," she said.
A police spokesman said 67 people had reported the case but no one had been arrested.
