Usana Health Sciences, Inc. (NASDAQ: USNA) critic Barry Minkow established the Cheating in China website a few months ago, positing that the company's growth and profitability relied on a complex scheme involving the elicit recruitment of Chinese citizens -- a country where multi-level marketing is generally illegal, and in which Usana does not have a license to operate.
According to a press release issued by Minkow's Fraud Discovery Institute this morning, the Nanning Business Administration Department, "Shuan Sheng" Branch Economic Inspection is taking a look.
According to Minkow, "It would appear that the interrogation notice is interested in both the individual and the company as a whole". On the Cheating in China website, Minkow has posted evidence of Usana distributors seeking to recruit Chinese nationals, in sharp contrast with Usana CFO Gil Fuller's proclamation on a 2006 conference call that "We don't have any associates in China".
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