Hyderabad: The Directorate of Enforcement (ED) has attached Rs 757.77 crore of movable and immovable properties of Amway India Enterprise Pvt. Ltd. for allegedly floating a pyramid scheme through multi-level marketing.
The case against Amway was taken up by the Metropolitan Sessions Judge cum Special Court on Monday, based on a complaint that was filed by the ED. The Prevention of Money Laundering Act (PMLA) of 2002 was the legal basis for the complaint.
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The ED officials initiated the investigation on the basis of various FIRs registered by Telangana Police under various sections of the IPC against Amway and its directors.
According to the FIRs, Amway has been defrauding the public by promising them large commissions or incentives for merely enrolling new members, all while promoting an illegal “money circulation scheme” under the pretence of selling goods.
The investigation by ED revealed that Amway has been promoting a pyramid scheme under 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 press release from ED.
Amway has generated proceeds of crime totalling Rs 4,050.21 crore by the commission of the scheduled offence of cheating.
The ED investigation further revealed that more than Rs 2859 crore of money collected from the members has been siphoned and parked in the bank accounts of overseas investors in the name of dividends, royalties, and payments for other expenses.
During the investigation, movable and immovable properties worth Rs 757.77 crore have been attached by ED in this case. Further investigation is underway.
