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By Svea Herbst-Bayliss BOSTON (Reuters) - Nutrition and weight loss products company Herbalife Ltd lowered its forecast range for 2014 sales and again defended itself on Wednesday against allegations by billionaire investor William Ackman that its business is a fraud. Herbalife, embroiled in a dispute with Ackman who over the past 14 months has accused the company of being a pyramid scheme, discussed earnings projections and its response to a U.S. lawmaker's inquiry into its business with analysts on a quarterly call. Sales are expected to grow between 7.5 percent and 9.5 percent this year, in part because of strong business in China. Those numbers are lower than the company had forecast in October, when it reported third quarter results, and said 2014 sales would grow between 9 percent and 11 percent. Investors said that may have added to pressure on Herbalife's stock price, which closed down nearly 4 percent on Wednesday at $66.18 per share. Overall the outlook remained robust, however, with the company raising its earnings forecasts for the year to $5.85 to $6.05 a share, from $5.45 to $5.65. On the call, Herbalife chief executive Michael Johnson described Ackman's short bet against Herbalife as "a reckless bet placed by a Wall Street gambler." Ackman first accused Herbalife publicly of running a pyramid scheme in December 2012. A pyramid scheme is an unsustainable business that typically makes most of its money by recruiting distributors rather than selling products to real customers. The company says it operates a legitimate multi level marketing business and Johnson struck back both at Ackman on the call and in a letter to Senator Edward Markey, a Massachusetts Democrat with an interest in consumer protection. Markey started asking questions about the business in January. Ackman has lost hundreds of millions on his $1.16 billion bet against Herbalife as the company's stock price has climbed 67 percent in the last 12 months. Executives on the call told analysts that the company was obeying all regulations in its business in China, and met with Markey's staff late last month. In the letter to Markey, dated February 18, Johnson said the company's compensation is driven by product sales, not recruitment. A copy of the letter was seen by Reuters. Johnson also wrote that he wants to "assure (Markey) in the strongest possible terms, as we assured your staff, that Herbalife does not 'target' members of minority or low income-communities." Civil rights groups have said the company preys on minorities with seductive advertising and promises to get rich by selling Herbalife products. Executives told analysts on the call that Herbalife was poised to gain from a global obesity epidemic by offering products designed for weight loss. They said the bulk of customers buy the product for their own use and only a small number try to make a business out of selling products to others. In the letter, Johnson said Herbalife wants its members to live a "healthier lifestyle" and give them a choice to "take advantage of the business opportunity that a multilevel marketing business model, like Amway, Avon or Tupperware, can offer." When Markey made his questions public, the company's stock price dropped 15 percent. Markey set a deadline of February 28 for the company to respond to his questions. News last month that Chinese officials were probing allegations that NuSkin another multi-level-marketing firm, has been exaggerating its influence and creditworthiness in brochures, had weighed on Herbalife shares earlier this year. (Editing by Grant McCool)