Nature’s Sunshine Product Inc. (“NSP”) is a manufacturer of nutritional and personal care products which markets its products worldwide through a system of independent multi-level marketing distributors. In 1994, NSP established a wholly-owned subsidiary in Brazil, Natures Sunshine Produtos Naturais Ltda. (“NSP Brazil”).
From 1999 to 2000, the Agência Nacional de Vigilância Sanitária (“Anvisa”), a Brazilian governmental agency responsible for regulating nutritional products, reclassified as medicines many vitamins, herbal products, and nutritional supplements, which included products being sold by NSP Brazil. As a result of the new regulatory requirements, NSP Brazil was required by Anvisa to register many NSP products in order to legally import and sell them in Brazil. NSP Brazil was unable to register many NSP products, and therefore could not legally import and sell those NSP products in Brazil. In order to circumvent the importation restrictions on many NSP products, NSP Brazil paid over $1 million to customs brokers, some of which were later paid to customs officials. The purpose of the improper payments were to facilitate the importation of their unregistered products to Brazil.
On July 31, 2009, the DOJ filed a complaint against NSP, Douglas Faggioli, and Craig D. Huff. NSP was charged with fraud in connection with the purchase and sale of securities, false filings with the commission, and violating the anti-bribery, books and records, and internal controls provisions of the FCPA. Faggioli and Huff, as Control Persons, were charged with violating the books and records, and internal controls provisions of the FCPA.
At the same time, without admitting or denying the allegations, NSP, Douglas Faggioli, and Craig D. Huff consented to the entry of a final judgment. NSP was permanently restrained and enjoined from commiting fraud in connection with the purchase and sale of securities, the false filings with the commission provisons, and from violating the anti-bribery, books and records, and internal controls provisions of the FCPA. NSP was ordered to pay a $600,000 civil penalty. Faggioli and Huff were permanently restrained and enjoined from violating the books and records, and internal controls provisions of the FCPA. Faggioli and Huff were each ordered to pay a $25,000 civil penalty.
