Criminal Case of Rs. 4,000 Crore Money Laundering Scheme against Amway India

Amway India, which operates a multi-level marketing (MLM) programme, generated criminal gains worth more than Rs. 4,000 crore, with a significant portion of it being diverted to offshore bank accounts, according to the Enforcement Directorate.

The federal agency made the announcement after filing a charge sheet against Amway India Enterprise Pvt Ltd in a special Prevention of Money Laundering Act (PMLA) court in Hyderabad.

The court heard the prosecution’s allegation on Monday, according to the Enforcement Directorate (ED).

The ED initiated a criminal case of money laundering based on various FIRs lodged by the Telangana Police against Amway and its directors.

It is alleged that they were promoting an “illegal money circulation scheme under the guise of sale of goods” and “cheating the general public by promising them very high commissions/ incentives through simple enrolment of new members and by claiming that these commissions/ incentives would continue in perpetuity.”

However, the corporation claimed that it was breaking the law.

“The current prosecution complaint filed by the Enforcement Directorate relates to an investigation that began in 2011, and we have been cooperating with the department since then, sharing all information as requested from time to time.” According to an Amway spokesman.

Amway has been “committed to legal and regulatory compliance and has diligently maintained a culture of compliance and integrity to the present day” since it began operations in India 25 years ago, according to a spokeswoman.

“We want to reiterate our continued confidence in the Indian legal and judicial system following the due process of law as we pursue our legal rights,” the spokesman went on to say.

In its investigation, the ED discovered that Amway was marketing a pyramid scam “under the guise of” direct selling.

“Instead of selling goods directly to the end consumer, Amway floated a multi-level marketing scheme of members and introduced numerous middlemen in the name of distributors,” according to the report.

“The scheme does not focus on the sale of products but survives primarily on enrolling members,” the secretary of state stated.

According to the agency, once a newcomer is persuaded to pay money through someone who brought him or her to the firm, he or she becomes a representative, and in order to earn a commission, he or she must enrol new members.

It stated that as the number of people climbs down the chain, those at the top receive more commission and incentives such as expensive excursions.

According to the agency, Amway not only ran a multi-level marketing scheme, but also a money-circulation scam, and gathered ‘vast’ sums from its customers.

‘By committing the scheduled offence of cheating, Amway generated criminal earnings totalling Rs. 4,050.21 crore,’ the ED stated.

More than Rs. 2,859 crores collected from members has been siphoned off and parked in the bank accounts of offshore investors in the form of dividends, royalties, and payments for various costs, according to the statement.

The ED attached assets worth more than Rs. 757 crore in this case in April last year.