The Directorate of Enforcement (ED) has filed a Prosecution Complaint against M/s Amway India Enterprise Pvt. Ltd. (Amway) in the Honorable Metropolitan Sessions Judge cum Special Court (PMLA) of Hyderabad, in accordance with the Prevention of Money Laundering Act (PMLA), 2002. On November 20, 2023, the Honorable Court granted the Prosecution’s complaint.
Based on many FIRs against Amway and its Directors filed by Telangana Police under different sections of the IPC, 1860, the ED began an inquiry. According to the FIRs, the company has been defrauding the public by promising them extremely high commissions or incentives for merely enrolling new members and by claiming that these commissions or incentives would last forever. Amway is accused of promoting an illegal “Money Circulation Scheme” under the pretext of selling goods.
Amway has been pushing a pyramid scam under the pretence of direct selling, according to an ED probe. Amway has incorporated several middlemen under the guise of distributors and has launched a multi-level marketing plan of members in place of selling items straight to the final customer. The program relies mostly on member enrollment for survival rather than product sales. A newcomer becomes a representative after being persuaded to pay money through a referral to the company. In order to receive a commission, the representative must enrol new members, and as the number of members rises, those at the top receive larger commissions and more benefits, such as opulent tours.
As a result, Amway has been running a Money Circulation Scheme and Multi-Level Marketing Scheme, which have brought in enormous sums from the members. The specified act of cheating has resulted in Amway generating proceeds of crime amounting to Rs. 4050.21 Crore. The ED’s inquiry further showed that over Rs. 2859 Crore of funds that were supposed to be paid to members—royalty, dividends, and other expenses—had instead been embezzled and deposited into the bank accounts of foreign investors.
The ED in this matter has attached real estate worth a total of Rs. 757.77 crore over the course of the inquiry. Further research is now being conducted.
