Enforcement Directorate Initiates Legal Action Against Amway in Alleged Money Laundering Scheme Valued at Rs 4,050 Crores

Enforcement Directorate Initiates Legal Action Against Amway in Alleged Money Laundering Scheme Valued at Rs 4,050 Crores

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Hyderabad: In a significant development, the Enforcement Directorate (ED) has taken decisive legal action against Amway India Enterprise Pvt. Ltd., filing a Prosecution Complaint under the Prevention of Money Laundering Act (PMLA), 2002. The complaint, lodged in the Court of the Hon’ble Metropolitan Sessions Judge cum Special Court (PMLA) in Hyderabad, has been promptly acknowledged.

The ED’s investigation, stemming from multiple FIRs filed by the Telangana Police against Amway and its Directors under various sections of the Indian Penal Code, reveals alarming allegations. It suggests that Amway has been involved in promoting an illicit ‘Money Circulation Scheme’ under the guise of selling goods, misleading the public with promises of lucrative commissions and incentives through the simple enrollment of new members.

According to ED’s findings, Amway is accused of operating a Pyramid scheme disguised as direct selling, wherein a multi-level marketing scheme with numerous intermediaries in the form of distributors takes precedence over the direct sale of goods to end consumers. The scheme’s sustenance hinges on enrolling new members, with increasing commissions and incentives for those higher up in the hierarchy.

The ED contends that Amway’s activities constitute both a Multi-Level Marketing Scheme and Money Circulation Scheme, resulting in the generation of proceeds of crime amounting to Rs 4,050.21 Crore through the scheduled offense of cheating.

Further investigations uncovered that over Rs 2,859 crores collected from members were allegedly diverted and transferred to the bank accounts of overseas investors, camouflaged as dividends, royalties, and other expenses.

As part of the enforcement measures, the ED has attached movable and immovable properties valued at Rs 757.77 Crore in connection with this case. The investigation remains ongoing, with the ED delving into the intricate web of financial dealings.

Responding to the ED’s prosecution, Amway India issued a statement through its spokesperson, addressing the investigation dating back to 2011. The spokesperson emphasized that Amway has been cooperating with the department, sharing all requested information throughout the process.

The statement reiterated Amway’s steadfast commitment to legal and regulatory compliance, emphasizing a culture of integrity and compliance since its establishment in India 25 years ago. Expressing confidence in the Indian legal and judicial system, Amway pledged to follow due process and vigorously defend itself.

Despite the legal challenges, Amway remains proud of its history in India and is resolute in its mission to support over 2,500 employees and more than 5.5 lakh independent distributors, aiming to contribute to healthier and better lives for people across the country. The company affirmed its dedication to pursuing legal rights while navigating through the ongoing legal proceedings.

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