Amway India, which runs a multi-level marketing (MLM) scheme, generated proceeds of crime worth more than Rs 4,000 crore and a substantial part of it was siphoned off to overseas bank accounts, the Enforcement Directorate alleged on Monday.

The federal agency said this after filing a charge-sheet against Amway India Enterprise Pvt Ltd before a special Prevention of Money Laundering Act (PMLA) court in Hyderabad.

The court took cognisance of the prosecution's complaint on Monday, the Enforcement Directorate (ED) said in a statement.

The criminal case of money laundering registered by the ED stems from multiple FIRs filed by the Telangana Police against Amway and its directors.

It is alleged that they were promoting an "illegal money circulation scheme under the guise of sale of goods" and "cheating the general public by promising them very high commissions/incentives through simple enrolment of new members and by claiming that these commissions/incentives would continue in perpetuity." The company, however, said it was in compliance with the law.

"The prosecution complaint, 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," an Amway spokesperson said.

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", the spokesperson said. "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 said.

The ED said in its probe, it found that Amway was promoting a pyramid scheme "in the guise of" direct selling. "Instead of selling goods directly to the end consumer, Amway floated a multi-level marketing scheme of members and introduced many intermediaries in the name of distributors," it said. "The scheme does not focus on sale of products but survives primarily on enrolling members," the ED said. The agency said once a newcomer is convinced to pay money through someone who has referred him or her to the company, he or she becomes a representative, and to earn commission, he or she has to enrol new members.

As the number of persons increases down the line, the ones on top get more commission and more incentives such as luxurious tours, it said.

Amway not only operated a multi-level marketing scheme, but also a money circulation scheme, and collected "huge" amounts from its subscribers, the agency alleged. "By commission of the scheduled offence of cheating, Amway has generated proceeds of crime totalling to Rs 4,050.21 crore," the ED said.

More than Rs 2,859 crore collected from 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, it said.

Amway said it will "vigorously defend" itself, as well as its more than 2,500 employees and over 5.5 lakh independent distributors.

Assets worth more than Rs 757 crore were attached by the ED in this case in April last year.

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