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What Is Amway India’s Alleged Rs 757 Crore Pyramid Scam


What Is Amway India’s Alleged Rs 757 Crore Pyramid Scam


The Enforcement Directorate (ED) recently seized assets valued Rs 757 crore from Amway India, a multi-level marketing company, for alleged money laundering.

With its large selection of consumer goods, Amway India seems to have become a household name in recent years. For a long time, the firm was used as a scanner by law enforcement authorities. As part of a crackdown on money launderers, ED investigators called the consumer products company’s bluff and seized its assets on Monday.

The company was investigated by the ED for operating a pyramid scam and defrauding clients under the guise of direct selling multi-level marketing systems.

What is a Pyramid scam?


The pyramid scheme is said to be a deceptive way of ‘duping’ investors, building a continuous chain of investments. Under this technique, the firm’s promoters are constantly on the lookout for new investors. They seek out ‘primary’ investors, who then seek out more and more. The name Pyramid comes from the fact that additional investors are added at each level, establishing a network.

Simply described, instead of providing a product or service to the general public, a pyramid plan guarantees participants payment or services in exchange for recruiting others to join the plan. Money continues to flow up the chain as new players bring in more recruits, forming an ever-increasing pyramid or hierarchy. Money circulation plans are another name for this type of arrangement.

In Amway’s lawsuit,…

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