The Enforcement Directorate (ED) has filed a Prosecution Complaint under the Prevention of Money Laundering Act, 2002 (PMLA) against Amway India. The complaint has been filed in the Court of the Hon’ble Metropolitan Sessions Judge cum Special Court in Hyderabad, which has acknowledged it on November 20, 2023.
The ED initiated an investigation based on FIRs registered by Telangana Police under various sections of the IPC against Amway and its Directors. These FIRs accused Amway of promoting an illegal ‘Money Circulation Scheme,’ misleading the public with promises of high commissions and incentives through simple enrollment of new members.
The ED’s findings reveal that Amway operated a Pyramid scheme under the disguise of direct selling. Instead of focusing on selling products to end consumers, Amway allegedly established a multi-level marketing scheme with numerous intermediaries posing as distributors. The scheme, according to the investigation, thrived on enrolling new members rather than product sales.
Amway is accused of operating both a Multi-Level Marketing Scheme and a Money Circulation Scheme, allegedly collecting substantial amounts from subscribers. The ED claims that, through cheating, Amway has generated proceeds of crime amounting to about Rs. 4000 Crore.
Furthermore, the investigation alleges that over Rs. 2859 Crore collected from members has been siphoned off to overseas investors’ bank accounts under the pretext of dividends, royalties, and other expenses.
As a result of the investigation, the ED has attached movable and immovable properties totaling over Rs. 750 Crore in this case.
Amway says that the investigation stands back from 2011 and the company has cooperated since then. “The Prosecution Complaint currently filed by the Enforcement Directorate pertains to the investigation dating back to 2011 and since then we have been cooperating with the department and have shared all the information as sought from time-to-time,” a spokesperson from the company said.