Rumors of NUS losing its license in China (cannot confirm), If so REAL BAD for USNA who has as many if not more "China issues" than NUS
— Citron Research (@CitronResearch) September 25, 2012
I can think of several USANA "China issues" that I have mentioned on my blog over the last several years. The biggest one that stands out is the illegal recruiting of Chinese Nationals into USANA's Hong Kong MLM compensation plan. It is illegal for any Chinese National to participate in Multilevel Marketing companies. China has outlawed MLM because it is a pyramid scheme.
I have pointed this out many times to my readers over the past several years. USANA's Hong Kong market exploded in growth a couple years ago and when the active associates in that market represented 1 out of every 100 Hong Kong citizens, it seemed pretty obvious to me that something is wrong. I have pointed out an internal USANA memo that admitted to sending a "LARGE SUM" of product to mainland China. There is no reason for a large sum of product to be sent to China unless they were going to distributors over there.
Then Dave Wentz and Fred Cooper actually admitted they have people signing up from mainland China in USANA's Hong Kong market. When a stock analyst asked USANA what percentage of USANA's Hong Kong market were Chinese Nationals, USANA refused to answer claiming they did not know (and never provided an actual answer). The analyst was satisfied with the non answer and dropped the subject.
I believe USANA has had tens of thousands of Chinese Nationals join USANA's MLM compensation plan. I believe USANA knows about it and is even training their associates to recruit Chinese Nationals into the MLM plan. The Fraud Discovery Institute uncovered this 5 years ago! According to the Fraud Discovery Institute (FDI), they had an undercover couple go into USANA's Hong Kong office and one of USANA's employees told that couple (who claimed they were from mainland China) to open up a bank account at the China Merchant Bank and use an address in Hong Kong. Also according to FDI, the USANA employee claimed there were 30,000 Chinese Nationals signed up in Hong Kong. Remember, this was 5 years ago. I believe this to be true.
Shortly after this China Report came out, FDI settled a lawsuit with USANA for an undisclosed amount and all the FDI material on USANA was removed from the internet. Then several years later Fred Cooper and Dave Wentz admit that Chinese Nationals signed up in Hong Kong.
Let it also be known that I brought this information to the attention of PriceWaterhouseCooper (USANA's Auditors) regarding the "LARGE SUM" of product being sent to mainland China as well as the recruiting of Chinese Nationals. PriceWaterhouseCooper ended their communications with me after I sent them all the information. Seems they didn't really care. But just for the record, they cannot claim they weren't informed about it years ago.
If there are tens of thousands of Chinese Nationals in USANA's Hong Kong distributorship, that could represent a very large portion of USANA's net revenues. Without this China recruiting, USANA's net revenues could have been on the decline like their United States market is. With such a decline, USANA's stock would be drastically lower. Which gets to my point about USANA executives selling their stock recently for millions of dollars with a stock price over $45. If these insiders know about the Chinese National recruiting scheme, then they know the stock price is grossly inflated because of the inflated earnings. I believe this is a form of stock manipulation.