The Enforcement Directorate (ED) has provisionally attached assets worth Rs 757.77 crore belonging to Amway India Enterprises Private Limited, a company accused of running a multi-level marketing scam. The attached properties include land and factory building of Amway at Dindigul in Tamil Nadu, plant and machineries, vehicles, bank accounts and fixed deposits.
The ED had provisionally attached immovable and movable properties worth Rs 411.83 crore and bank balances of Rs 345.94 crore from 36 different accounts belonging to Amway.
A money laundering investigation by the ED revealed that Amway is running a pyramid fraud in the guise of direct selling multi-level marketing network.
“It is observed that the prices of most of the products offered by the company are exorbitant as compared to the alternative popular products of reputed manufacturers available in the open market,” said the ED.
Investigators said that gullible public was induced to join as members of the company without knowing real facts and purchase products at exorbitant prices, losing hard earned money. The modus operandi was that the commission received by the senior members led to hike of prices of products.
It was observed that the company collected an amount of Rs 27,562 crore from its business operations from 2002-03 to 2021-22 and out of this amount, the company paid commission of Rs 7,588 crore to its distributors and members in India and the US during the period from 2002-03 to 2020-21.
“The entire focus of the company is about propagating how members can become rich by becoming members. There is no focus on the products. Products are used to masquerade this MLM Pyramid fraud as a direct selling company,” said an official .
Amway is alleged to have brought Rs 21.39 crore as share capital in India in 1996-97 and till 2020-21, the company remitted a huge amount of Rs 2859.10 crore in the name of dividend, royalty and other payments to their investors and parent entities.
The ED has alleged that Britt Worldwide India Private Limited and Network Twenty One Private Limited also played a major role in promoting pyramid scheme of Amway by conducting seminars for joining members under the guise of sale of goods by enrollment of members in chain system. The ED found in its probe that the promoters were conducting mega conventions and flaunted lavish lifestyles using social media to lure gullible investors.