The Directorate of Enforcement (ED) has taken legal action against Amway India Enterprise Pvt. Ltd. (Amway) in a Rs 4,050 crore alleged money laundering case. The ED has filed a prosecution complaint under the Prevention of Money Laundering Act (PMLA), 2002, in the Court of the Hon’ble Metropolitan Sessions Judge cum Special Court (PMLA) in Hyderabad. This action comes after several FIRs were registered by the Telangana Police against Amway and its Directors under different sections of the Indian Penal Code.
The allegations against Amway suggest that the company was involved in promoting an illegal ‘Money Circulation Scheme’ disguised as the sale of goods. They deceived the public by promising high commissions and incentives through the simple enrollment of new members. The ED’s investigation has revealed that Amway was operating a Pyramid scheme under the guise of direct selling. Instead of focusing on direct sales to consumers, Amway introduced a multi-level marketing scheme with numerous intermediaries in the form of distributors.
The survival of this scheme relied heavily on enrolling new members, with commissions and incentives increasing for those higher up in the hierarchy. The ED argues that Amway’s activities constitute 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 offense of cheating.
Furthermore, the investigation uncovered that over Rs 2,859 crore collected from members was allegedly siphoned off and transferred to the bank accounts of overseas investors, disguised as dividends, royalties, and other expenses. The ED’s investigation is still ongoing, as they continue to delve into the complex financial dealings.
In response to the ED’s prosecution, Amway India issued a statement through its spokesperson. They addressed the investigation, stating that it dates back to 2011 and that they have been cooperating with the department, sharing all the required information throughout the process. Amway emphasized its commitment to legal and regulatory compliance, maintaining a culture of integrity since its establishment in India 25 years ago.
Amway expressed confidence in the Indian legal and judicial system, vowing to follow due process and vigorously defend itself. Despite the legal challenges, the company remains proud of its history in India and stands firm in its mission to support its employees and independent distributors, aiming to contribute to healthier and better lives for people across the country.
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