Ex-con turned fraud fighter Barry Minkow has released a press release raising questions about Herbalife (NYSE: HLF). Calling the company a "financial crime in progress," he wrote about the "Top Ten Red Flags of Fraud at Herbalife."

Herbalife describes itself as "a global network marketing company that sells weight-management, nutrition, and personal care products intended to support a healthy lifestyle," but Minkow believes the company is a fraud.

Minkow writes about a large amount of insider selling combined with aggressive debt-financed share repurchases and indications that the company's business model is not sustainable. Minkow argues that the company has saturated many of its existing markets and that the stringent multi-level marketing laws in China will make expansion there difficult. In the report, he writes that "Herbalife's expansion has reached more than 80 percent of the world's population as the entire continent of Africa, for the most part, is not in the market for weight loss products," but the reality is that Africa is actually facing an extremely serious obesity epidemic. Whether Herbalife's premium-priced products are a viable solution there is a separate question.

Last year, Minkow leveled similar accusations at Usana Health Sciences (NASDAQ: USNA), another network marketing company, but the SEC dropped its informal investigation without taking any action. However Usana shares have continued their slide on poor results and analyst downgrades.

In a separate item posted on his website, Minkow disclosed that he has a short position in the stock: "In April of 2008, Mr. Minkow once again had an in-person meeting at the Los Angeles office of the Securities and Exchange Commission and informed the Commission that he was now shorting Herbalife stock to finance the continued investigation of Herbalife in China and to produce You Tube videos of Herbalife victims. Mr. Minkow also provided direct, online access to the specific trading account where the transaction took place both to the FBI and the SEC including user name and password for the purposes of full disclosure."

To read more about the former Zzzz Best stock fraud mastermind's case against Herbalife, visit Doomedbydesign.com. He has also released a YouTube video making his case.