School of Accountancy
Douglas Faggioli, president and CEO of Nature's Sunshine Products (NSP) made the above remarks as he accepted, on behalf of NSP, a 2004 "100 Best Corporate Citizens" award from Business Ethics magazine. NSP received the award two years in a row. Less than two years later, NSP would discover a bribery scheme in its Brazil operations that would expose it to Securities and Exchange Commission (SEC) enforcement under the Foreign Corrupt Practices Act (FCPA). Faggioli and the company's CFO, Craig Huff, along with NSP, would be plaintiffs in a class action lawsuit, and the SEC would fine each officer $25,000. In order to register and import more products in Brazil, NSP made undocumented cash payments to Brazilian customs brokers, some of which were ultimately paid to Brazilian customs officials. NSP's Brazilian subsidiary falsified its books and hid the nature of these payments in its filings with the SEC. NSP's internal investigation revealed internal control weaknesses, which likely led to the violations.
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