Amway India faces money laundering probe over alleged pyramid scheme

The Enforcement Directorate claims Amway generated ₹4,050.21 crore through “cheating”, using a Multi-Level Marketing Scheme.

By  Storyboard18Nov 21, 2023 10:40 AM
Amway India faces money laundering probe over alleged pyramid scheme
A spokesperson from Amway told CNBC-TV18 that the complaint filed pertains to the investigation dating back to 2011 and that the company has since been cooperating with the department. (Image source: CNBC-TV18)

The Enforcement Directorate (ED) has filed a Prosecution Complaint against Amway India under the Prevention of Money Laundering Act, the law enforcement agency said in a statement on Monday. The Metropolitan Sessions Judge cum Special Court (PMLA) in Hyderabad has acknowledged the complaint on November 20, it added.

The ED's move follows investigations into multiple FIRs filed by the Telangana Police against Amway and its Directors. Allegations include promoting an illegal 'Money Circulation Scheme,' misleading the public with promises of high commissions through member enrolments.

According to the ED, Amway operated a Pyramid scheme under the guise of direct selling, focusing more on recruiting members than selling products.

“The scheme does not focus on sale of products but survives primarily on enrolling of members. Once a newcomer is convinced to pay money through someone who has referred him to the company, he/she becomes a representative and to earn commission, he/she has to enrol new members and as the number of persons increases down the line, the ones on top get more commission and more incentives like luxurious tours,” the statement added.

A spokesperson from Amway told CNBC-TV18 that the complaint filed pertains to the investigation dating back to 2011 and that the company has since been cooperating with the department.

“Amway is proud of its rich history in India and will vigorously defend itself, as well as the over 2,500 employees and over 5.5 lakh independent distributors who are critical to its mission of helping people live healthier, better lives,” they added.

The Enforcement Directorate claims Amway generated ₹4,050.21 crore through “cheating”, using a Multi-Level Marketing Scheme. The investigation further reveals that over ₹2,859 crore was allegedly siphoned off to overseas investors' bank accounts under various pretexts. As part of its action, the ED has attached properties worth ₹757.77 crore.

First Published on Nov 21, 2023 10:40 AM

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