The Enforcement Directorate (ED) has filed a cost sheet towards Amway India, a preferred direct advertising and marketing firm that just about began the multi-level advertising and marketing (MLM) craze in India by enrolling lakhs of individuals as its members by providing them profitable commissions on exorbitantly priced merchandise so long as they saved including members under them, the company stated on Monday.

The company claimed it has recognized proceeds of crime price ₹4,050 crore generated by Amway by dishonest numerous subscribers.

A cash laundering probe towards Amway India Enterprise Pvt Ltd, which has 5.5 lakh direct sellers throughout the nation, was began in 2011 based mostly on numerous first data experiences (FIR) filed by the Telangana police.

It was alleged that Amway was selling an unlawful ‘money circulation scheme’ below the guise of sale of products and has been dishonest most people by promising them very excessive commissions/incentives via easy enrolment of latest members and by claiming that these commissions/incentives would proceed in perpetuity.

ED’s probe revealed that Amway has been selling a Pyramid scheme within the guise of direct promoting. “Instead of selling goods directly to the end consumer, Amway has floated a multi-level marketing scheme of members and has introduced many intermediaries in the name of distributors. The scheme does not focus on the sale of products but survives primarily on the enrolment of members. Once a newcomer is convinced to pay money through someone who has referred him to the company, he/she becomes a representative and to earn commission, he/she has to enroll new members and as the number of persons increases down the line, the ones on top get more commission and more incentives like luxurious tours,” the company stated in an announcement on Monday.

It additional stated that “Amway has been operating a multi-level marketing scheme and money circulation scheme and has collected huge amounts from the subscribers”.

By fee of the scheduled offence of dishonest, Amway has generated proceeds of crime totaling ₹4,050.21 crore, ED added.

Referring to the diversion of cash by Amway, ED stated “ ₹2,859 crore of money collected from the members has been siphoned off and parked in the bank accounts of overseas investors in the name of dividend, royalty and payments for other expenses”.

Amway stated it was dedicated to authorized and regulatory compliance. “The prosecution complaint (charge sheet) currently filed by the Enforcement Directorate pertains to the investigation dating back to 2011 and since then we have been cooperating with the department and have shared all the information as sought from time-to-time. Since Amway began its operations in India 25 years ago, it has been committed to legal and regulatory compliance, and has diligently maintained a culture of compliance and integrity to the present day,” an Amway spokesperson stated in an announcement.

“We want to reiterate our continued confidence in the Indian legal and judicial system following the due process of law as we pursue our legal rights,” the spokesperson stated.

The monetary crimes probe company had connected Amway’s movable and immovable properties price ₹757.77 crore in April. At that point, ED had said that Amway collected ₹27,562 crore from its enterprise operations from 2002-03 to 2021-22. Of this quantity, the corporate paid fee price ₹7,588 crore to its distributors and members in India and within the United States between 2002-03 and 2020-21.