BOSTON (Reuters) – A union representing workers in New Jersey gambling hub Atlantic City said on Tuesday it asked the state’s top prosecutor to investigate Herbalife Ltd, saying it is worried the nutrition supplements company could “prey” on unemployed workers in the casino industry.
Unite Here Local 54 is the latest group to ask officials across the United States to probe Herbalife over widespread allegations that it is running a pyramid scheme. The Los Angeles-based company has denied the claims.
“We are… concerned about the potential for Herbalife to prey on unemployed or desperate casino employees in the Atlantic City area in the wake of the economic downturn,” Unite Here Local 54 President Bob McDevitt wrote in a letter to New Jersey Acting Attorney General John Hoffman.
Neither Hoffman’s office nor an Herbalife spokesman immediately responded to a request for comment.
Shares of Herbalife were down 0.8 percent at $ 46.32 in afternoon trading.
Herbalife has been in the spotlight since 2012, when billionaire investor William Ackman accused it of being a fraud and placed a $ 1 billion bet that it would fail under regulatory scrutiny. Other huge investors bought shares in the company, including Carl Icahn, who is its biggest stockholder.
A spokesman for the union said it was in touch with Ackman’s firm before it sent the letter requesting an investigation.
State attorneys general in New York and Illinois are already probing Herbalife, along with the U.S. Securities and Exchange Commission, Federal Trade Commission, Federal Bureau of Investigation and Department of Justice.
The spokesman for the union, which represents 10,000 cooks, housekeepers, janitors and waitresses who work in Atlantic City hotels, said about 3,000 members lost their jobs after four casinos shut down last year.
McDevitt said in the letter he would call other union leaders and ask them to contact their state attorneys general.
Herbalife detractors say the company tries to woo new members with false promises of getting rich fast by selling its products. Herbalife says it is transparent about how little some members earn while trying to sell the goods.
Last week Herbalife said the Justice Department recently sought information from the company, certain of its members and others about its business practices.
(Reporting by Svea Herbst-Bayliss; Editing by Richard Valdmanis and Lisa Von Ahn)
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