Herbalife Ltd. (NYSE:HLF) has apparently failed to disclose in its regulatory filings that one of its board members, Pedro Cardoso, is being sought by authorities in Brazil. Officials said they’ve been unable to find Cardoso, even though he’s been living in the lap of luxury—and giving Herbalife the credit for all his money.

Reuters reported this week that a Brazilian prosecutor charged Cardoso with money laundering in 2008 in connection with a case allegedly involving one of the nation’s biggest criminal organizations.

Herbalife Ltd. HLF

Herbalife board member indicted

Prosecutors alleged that Cardoso participated in an embezzlement scheme that stretched back ten years and bilked $10.4 million from the Espirito Santo state government’s coffers. After reportedly indicting him in 2008, the 8th Criminal Court of Vitoria ordered him to be subpoenaed, but at that time, authorities were apparently unable to locate him. Reuters cites court filings and a source in Brazil’s court system for the information.

This case has advanced very slowly in the Brazilian court system, but it is one nearly everyone in Brazil seems to be aware of. There are plenty of news articles about the case, although they are in Portuguese. The case revolves around Brazilian mob boss Jose Carlos Gratz, who claimed that his signatures on the checks in question were forged. Authorities say Cardoso was a partner at a firm that cashed one of the checks allegedly signed by Gratz in 1999.

Cardoso has been on the run for some time, as officials said he has moved a number of times without notifying the court of where he was going. Interestingly, he has led a very lavish lifestyle and happens to be yet another Herbalife distributor who has made claims about how selling the company’s products could bring fortune.

A video posted on Pershing Square’s Facts about Herbalife website shows him living large as a member of the company’s Chairman’s Club.

Herbalife failed to disclose indictment

Cardoso claims that he himself didn’t even know he had been indicted in the case. In a post on the Financial Times’ Alphaville blog, Dan McCrum said Cardoso sent him a statement saying that the indictment was related to a “private matter involving an amount of $2,500, that dates back to 1998.”

He didn’t become a board member for Herbalife until 2009, the year after he was allegedly indicted, and he said that the issue has nothing to do with his work with Herbalife. He also stated that he never received any “official notification of any kind with regards to this matter.”

A spokesperson for Herbalife told CNBC that they didn’t know about Cardoso’s indictment until two days ago. SEC rules state that public companies must disclose any issues involving the integrity of their board members, but Herbalife has made no such disclosure regarding Cardoso. There don’t even appear to be any public filings indicating that Herbalife knew two days ago—before Reuters broke the story.

Herbalife can’t seem to keep out of trouble

In other words, if Herbalife knew about Cardoso before Reuters reported it, then the controversial company still didn’t disclose the indictment when it probably should have under SEC rules. The multi-level marketing company is already under investigation by multiple government agencies, so this issue with Cardoso and the failure to disclose it certainly don’t help Herbalife’s situation any.