“Pyramid Fraud”: Consumer Goods Seller Amway India Frozen 750 Crore
The Enforcement Directorate announced on Monday that assets worth over 757 crore belonging to Amway India, a direct-selling consumer goods company, had been attached under the anti-money laundering law.
Amway India Enterprises Pvt Ltd.’s provisionally attached properties include land and a factory building in Tamil Nadu’s Dindigul district, as well as plant and machinery, vehicles, bank accounts, and fixed deposits, according to a statement.
When a property is attached, it cannot be transferred, converted, or relocated. Immovable and movable properties are worth 411.83 crore of the total 757.77 crore of assets attached under the Prevention of Money Laundering Act (PMLA), while bank balances of 345.94 crore are kept in 36 accounts belonging to Amway, it said.
The Enforcement Directorate accused the company of operating a multi-level marketing “scam” in which most of the company’s products were “exorbitant when compared to alternative popular products from reputable manufacturers available in the open market.”
According to the ED, “a money laundering investigation revealed that Amway is operating a pyramid fraud under the guise of a direct selling multi-level marketing network.”
“Without knowing the truth, the general public is enticed to join the company as members and purchase products at exorbitant prices, resulting in the loss of their hard-earned money. The new members are not purchasing the products to use them, but rather to become wealthy by becoming members, as the upline members have demonstrated. The truth is that the commissions received by upline members play a significant role in the increase in product prices “It was also added.
“The company’s entire focus is on spreading the word about how members can become wealthy by becoming members. The emphasis is not on the products. This MLM Pyramid scheme is disguised as a direct selling company by the use of products “According to the agency. Amway India issued a statement in response to the allegations, saying, “The authorities’ action relates to an investigation that began in 2011, and we have been cooperating with the department since then, sharing all of the information that has been requested from time to time. We will continue to work with relevant government officials and law enforcement officials to reach a fair, legal, and logical resolution to the outstanding issues.”
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