Amway Responds to Reports of Money Laundering Probe in India

As newspapers report that Amway's operation in India is under investigation by that country's government for money laundering, the Ada-based multi-level marketing company says its unaware of any formal probe.

"We've reached out to our colleagues in India to learn more, but we cannot confirm the facts of the story that ran in the Daily Mail," said a company spokeswoman by email "We CAN confirm that to date, we have not received any formal notice from the Enforcement Directorate."

The Daily Mail reported this week that the Enforcement Directorate launched a money laundering probe of Amway India Enterprises, which is accused of pushing multi-level marketing (MLM) by enrolling people as members by offering them lucrative commissions on exorbitantly priced products.

The head of Amway India Enterprises turned over documentation to investigators last month, according to the article

The direct selling industry leader has survived similar investigations in other countries including England last year. In India, Amway is working with regulators and other direct selling companies to promote consumer education about direct selling.

It may be an uphill battle for Amway in India where the government is trying to crack down on what it sees as illegal money-making schemes.

A previous court ruling determined that Amway's marketing offer attracted illegal "money circulation scheme" as it allegedly provided inducement since a sponsor member's income partly also came through the commission earned by those made members subsequently, according to India Today. (mlive.com)