Amway India faces allegations of money laundering: ED claims over Rs 4,000 Crore diverted overseas

Amway India, operating under multi-level marketing (MLM) schemes, has come under scrutiny as the Enforcement Directorate (ED) alleges that it generated "proceeds of crime" exceeding Rs 4,000 crore. The federal agency claims that 70 per cent of these funds were siphoned off to overseas bank accounts. The ED recently filed a charge-sheet against Amway India Enterprise Pvt Ltd, asserting that over Rs 2,859 crore collected from members was diverted to overseas investors' bank accounts in the guise of dividends, royalties, and other expenses.

ED has filed Prosecution Complaint under the PMLA, 2002 against M/s Amway India Enterprise Pvt. Ltd. (Amway) in the Court of Hon’ble Metropolitan Sessions Judge cum Special Court (PMLA) Hyderabad. The Hon’ble Court has taken cognizance of the Prosecution Complaint on 20.11.2023.

— ED (@dir_ed)

The prosecution complaint has been submitted before a special Prevention of Money Laundering Act (PMLA) court in Hyderabad, which acknowledged it on Monday, according to the ED statement. The agency accuses Amway India of promoting an "illegal money circulation scheme" under the pretext of selling goods, allegedly deceiving the public with promises of high commissions and incentives through the recruitment of new members.

Amway has defended itself, stating compliance with the law. An Amway spokesperson clarified that the prosecution complaint relates to an investigation dating back to 2011, and the company has been cooperating with the authorities since then, providing all requested information. Amway emphasised its commitment to legal and regulatory compliance throughout its 25 years of operations in India.

The ED's money laundering case originated from multiple FIRs filed by the Telangana Police against Amway and its directors. The ED alleges that Amway operated a pyramid scheme masquerading as direct selling, introducing intermediaries in the form of distributors and focusing more on member enrollment than product sales.

The agency claims that Amway not only conducted a multi-level marketing scheme but also a money circulation scheme, collecting substantial amounts from subscribers. The ED asserts that by engaging in fraudulent activities, Amway generated proceeds of crime totaling Rs 4,050.21 crore.

Amway has vowed to vigorously defend itself, its employees, and over 5.5 lakh independent distributors. In April last year, the ED attached assets worth more than Rs 757 crore in connection with this case.