These are the letters that may be at the center of a probe related to Bill Ackman's $1 billion short of Herbalife

Bill ackmanREUTERS/Eduardo MunozWilliam Ackman, founder and CEO of hedge fund Pershing Square Capital Management

The $US1 billion short of Herbalife by hedge fund manager Bill Ackman is under renewed scrutiny.

Last week, The Wall Street Journal reported that the FBI and the US Attorney’s office in Manhattan have been interviewing people tied to Ackman.

While details on the exact nature of the probe remain hazy, it appears a preliminary investigation into possible market manipulation of Herbalife’s stock may tie back to some letters written to regulators by people who don’t seem to remember sending them.

In a series of television appearances following the WSJ article, Ackman emphasised that neither he, nor his fund, Pershing Square Capital, had been contacted by the FBI or subpoenaed. He also said that he has made “only truthful” statements about Herbalife’s business practices.

“Market manipulation is when someone intentionally makes false or misleading statements about a company for the purpose of driving down the stock or driving up the stock. I have made only truthful statements backed up by enormous research,” Ackman told Bloomberg TV.

Ackman said he believed that subcontractors hired by Global Strategy Group, a consultancy firm his fund retained in its fight against Herbalife, had been subpoenaed. Global Strategy Group acknowledged in a statement that they had talked to the Manhattan US Attorney’s office, but said they didn’t believe they were the target of an investigation.

For more than two years, Ackman has been publicly crusading against Herbalife — a multi-level marketer that sells weight loss products and nutritional shakes. Ackman believes the company operates as a “pyramid scheme” that targets poor people, especially from the Latino community. Ackman, who’s betting that the stock goes to $US0, believes that regulators, specifically the Federal Trade Commission will shut the company down. (The FTC opened an investigation in Herbalife on March 12, 2014).

On March 10, 2014, the New York Times ran a front page story highlighting a key part of Ackman’s short strategy which is to lobby government officials in order to bring about an investigation that will shutdown Herbalife. One way Ackman’s team had been doing this was organising letter-writing campaigns.

What was so striking about the New York Times article was that some of the folks who wrote letters to the FTC demanding an investigation of Herbalife didn’t remember doing so. Furthermore, the language in many of the letters was so similar that it made it clear that they were written as part of a coordinated lobbying effort. (Herbalife has also done a letter writing campaign of its own).

One of the people who received a subpoena by a grand jury in New York late last month was a Connecticut-based Puerto Rican hairstylist named Israel Alvarez, the Hartford Courant reported, citing an unnamed attorney. According to the Courant, Alvarez said he can’t discuss the matter.

One of Alvarez’s haircutting clients is Christopher Healy, the man hired by Global Strategy Group to find people to write letters in regards to Herbalife, the Courant also reported.

Alvarez was also identified in last year’s New York Times report as someone who wrote a letter to the FTC asking the regulator to investigate Herbalife. In the letter, dated July 9, 2013, Alvarez called Herbalife “a complex and abusive pyramid scheme.”

During a telephone interview, Alvarez told the New York Times that he didn’t recall writing a letter. He also described Herbalife as “a vitamin thing, and food thing.”

A few days after the Alvarez letter was sent, there was another one written that had pretty much the same exact language (See below). This time the letter came from a woman named Mary Ann Turner, who is also the Enfield Republican Town Committee chair.

When the New York Times reached out to Turner a year ago, she told them “I don’t remember anything.” When the Times pointed out the similar language to other letters she said: “It is just something I wrote. I guess we are really smart.”

When we called Turner on the phone and asked her if she had been contacted by the Manhattan US Attorney’s office or the FBI, we were immediately disconnected. (We can’t tell if she hung up or if she lost service.) Turner did not respond to multiple follow-up calls as of the time of publication.

Both Turner and Alvarez’s letters are inserted below, you can see how the language matches up.

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