To Date: 22/3/2014
The Dy. Commissioner of Police,
CCS, Hyderabad City.
Respected Sir,
Sub: Cognizable Offences of Promoting illegal Money Circulation Scheme, cheating and looting the gullible public with the promise of get quick rich scheme by the Amway India Enterprises and its promoters, members in Hyderabad City in the guise of sale of health and dietary supplement products – Request to inquire and take action against Amway India Enterprises, its promoters, members for indulging in cheating, promotion of illegal Money circulation scheme – Regarding.
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1. I, M V Syam Sundar, Secretary, Corporate Frauds Watch Society, Hyderabad, humbly submit that Amway India Enterprises set up office near Yasoda Hospital, Somajiguda, Hyderabad (which lies in the jurisdiction of the officer) and has been promoting illegal Money Circulation Scheme in the guise of sale of goods by enrollment of members in chain system with the inducement of get quick rich. The details of the Amway India Enterprises are as follows.
2. The Enrollment scheme of the Amway:
Amway is a company registered under the Companies Act. The scheme of Amway is 6-4-3 scheme. The first person has to sponsor 6 persons and these 6 persons have to sponsor 4 persons each totaling 24 persons and in turn these 24 persons have to sponsor/enroll 3 persons each totaling 72 persons. Thus these 103 (1+6+24+72) persons are called as one leg for income calculation purpose and this chain keeps on goes unchecked. The person should be enrolled by an already enrolled member so as to maintain chain. Initially, the entrance fee of the Amway is Rs.4,500/-. Now waived this entrance fee, but the new entrants have to purchase products worth Rs.4,500/- otherwise their membership will expire. After payment of some amount, an identity card and some products will be delivered by the company at the time of joining in the name of business kit. Joining a member into the scheme is treated as sale of products. The new person who joined in the scheme is called Amway Business Owner or ADA or ABO or downliner. The person who made the new member to join in the scheme under him is called upline member. Commissions are given not only on the event of personal efforts of their direct enrollment/sponsoring but also on the contingency relative or applicable to sponsoring of new members by their downline members. The promise of commission on the enrollment of new members will be as follows:
Sl. No.
No. of persons to be joined by self or downline members
Promise of commission in percentage
Business turn over credited in the members account based on his sponsoring activity of new members
1.
3 Persons
6%
Rs.13,500/- (3 persons xRs.4500/-)
2.
10 persons
9%
Rs.45,000/-
3.
20 persons
12%
Rs.90,000/-
4.
40 persons
15%
Rs.1,80,000/-
5.
70 persons
18%
Rs.3,35,000/-
6.
100 persons
21%
Rs.4,50,000/-
Apart from this Amway induces that it will give Rs.50,925/- per month if any person sponsor or enroll 102 persons under his downline. The commissions are said to be distributed to all the members in the chain/network from last person to Amway in U.S.A. as commissions on group turnover.
3. Amway company further has been awarding titles to its members based on their enrollment of new members into its scheme. There are 22 levels in the scheme of Amway namely 1) Silver, 2) Gold, 3) Platinum, 4) Ruby, 5) Founders Platinum, 6) Founders Ruby, 7) Sapphire, 8) Founders Sapphire, 9) Emerald, 10) Founder Emerald, 11) Diamond, 12) Founders Diamond, 13) Executive Diamond, 14) Founders Executive Diamond, 15) Double Diamond, 16) Founder’s Double diamond, 17) Triple Diamond, 18) Founder’s Triple Diamond, 19) Crown Diamond, 20) Founder’s Crown, 21) Crown Ambassador and 22) Founder’s Crown Ambassador. The title holders will get huge and fabulous easy money in the form of group income which purely depend on the enrollment of new members into the scheme but not depend on the sale of products.
4. During seminar, the members of Amway/speakers have brainwashed to target wives of Govt. officials, middle class, retired persons, unemployed youth to get them into the scheme so as to spread network.
5. The Hon’ble High Court of A.P. also held vide WP 20470/2006 that the scheme of Amway is nothing but illegal Money Circulation Scheme and the Hon’ble Supreme Court of India also upheld the same vide SLP No.13414/2007. Moreover the Government of A.P. has also issued a G.O. Vide G.O.Ms.No.178 dated 15/9/2008 restraining the Amway from issuing advertisements, still Amway has been issuing advertisements in contravention of The Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
6. The Hon’ble High Court of AP in Speakasia case (CRLP 5626/2011) held that there is no need of any loss or misappropriation of funds to attract an offence under Prize Chits and Money Circulation Schemes (Banning) Act 1978. Mere informing a scheme, which covered under the money circulation scheme and enrolling members as subscribers, itself is an offence. Further Hon’ble Supreme Court of India in Kuriachan Chacko case (2008(8) SCC 710) held that the scheme of enrolment of members leads to mathematical impossibility that amounts to cheating, as such the Amway has been cheating and promoting the illegal money circulation scheme in the guise of sale of products.
7. I submit that so far Amway India Enterprises has cheated lakhs of people in Hyderabad and looted crores of rupees from the members of the Hyderabad by promoting illegal Money Circulation Scheme.
8. Hence, I pray that the Dy. Commissioner of Police, CCS, Hyderabad may be pleased to initiate criminal action against Amway India Enterprises, its promoters and members for cheating, looting by extortion the hard earned money of gullible public by making false promise of get quick rich, by putting mental torture in the name of seminars and for promoting illegal money circulation scheme in the guise of sale of products by enrollment of members into its scheme.
Yours faithfully,
(M. V. Syam Sundar)
Copy to Addl. Commissioner of Police (Crimes), Hyderabad City.
Copy to Commissioner of Police, Hyderabad City.