The Directorate of Enforcement (ED) has attached ₹ 757.77 crore of movable and immovable properties of Amway India Enterprise Pvt. Ltd. (Amway) for allegedly floating a pyramid scheme through multi-level marketing. Based on a prosecution complaint filed by the ED, the Metropolitan Sessions Judge cum Special Court has taken cognizance of the case against Amway on Monday. The complaint was filed under the Prevention of Money Laundering Act (PMLA) of 2002.
The ED officials had initiated the investigation on the basis of various FIRs registered by Telangana Police under various sections of IPC against Amway and its directors. The FIRs claim that Amway has been promoting illegal ‘money circulation scheme’ under the guise of sale of goods and has been cheating the general public by promising them high commissions/incentives through simple enrolment of new members.
The investigation by ED revealed that Amway has been promoting a pyramid scheme in the guise of direct selling. “Instead of selling goods directly to the end consumer, Amway has floated a multi-level marketing (MLM) scheme of members and has introduced many intermediaries in the name of distributors. The scheme does not focus on sale of products but survives primarily on enrolling members,” said a release from ED.
By commission of the scheduled offence of cheating, Amway has generated proceeds of crime totalling to ₹4,050.21 crore. ED investigation also revealed that more than ₹ 2,859 crore of money collected from the members has been siphoned and parked in the bank accounts of overseas investors in the name of dividend, royalty and payments for other expenses. During investigation, movable and immovable properties to the tune of ₹757.77 crore have been attached by ED in this case. Further investigation is under progress.
Meanwhile, an Amway India spokesperson said that the prosecution complaint filed by the Enforcement Directorate pertains to the investigation dating back to 2011. “Since then, we have been cooperating with the department and have shared all the information. Since Amway began its operations in India 25 years ago, it has been committed to legal and regulatory compliance, and has diligently maintained a culture of compliance and integrity to the present day,” said the spokesperson.
