New Delhi: Enforcement Directorate (ED) has taken major action against network marketing company Amway India. The ED said on Monday that assets worth more than Rs 757 crore of Amway India, a company promoting the Multi-Level Marketing (MLM) scheme, have been attached under the Prevention of Money Laundering Act (PMLA).
Why were properties worth crores attached?
The company is accused of running a multilevel marketing scam. The temporarily attached properties of Amway India Enterprises Pvt Ltd include land and factory building, plant and machinery, vehicles, bank accounts, and fixed deposits in Tamil Nadu’s Dindigul district, the probe agency said in a statement.
Of the total assets attached under the Prevention of Money Laundering Act of Rs 757.77 crore, immovable and movable assets are worth Rs 411.83 crore, while the balance amounted to Rs 345.94 crore deposited in 36 bank accounts belonging to Amway.
Accused of running pyramid fraud under the guise of network marketing
Money laundering investigations revealed that Amway is running pyramid fraud under the guise of a direct selling multi-level marketing network. The Enforcement Directorate accused the company of a multi-level marketing ‘scam’ where the prices of most of the products offered by the company were “excessive as compared to alternative popular products from reputed manufacturers available in the open market”.
What is Enforcement Directorate and what is its function?
The Enforcement Directorate is a federal body. It was established on May 01, 1956, when an ‘Enforcement Unit’ was constituted under the control of the Department of Economic Affairs to prevent violation of exchange control laws under the Foreign Exchange Regulation Act, 1947 (FERA, 1947). Presently it is a specialized financial investigation agency under the Department of Revenue, Ministry of Finance, Government of India. Its headquarter is in New Delhi. It has 05 regional offices in Mumbai, Chennai, Chandigarh, Kolkata, and Delhi.
