Amway India ran its global MLM in a market that made it a crime — CEO jailed two months

Amway brought its global multilevel marketing model to India in 1998 and built a network of 5.5 lakh distributors and 2,500 employees. But India's Prize Chits and Money Circulation Schemes (Banning) Act, 1978, outlaws schemes that pay for recruiting rather than product sales — and that, prosecutors argued, is exactly what a distributor network is. The Andhra Pradesh High Court had said so as early as 2006.

The first arrest came in 2013, when Kerala police detained CEO William Pinckney and two directors under the Act. In May 2014, Andhra Pradesh's Khammam police arrested him again, and he spent about two months in judicial custody before the High Court released him on 28 July 2014. Amway said the charges were baseless, but the model itself was on trial: nine criminal cases were pending across Andhra Pradesh.

The legal battle ran for a decade. In November 2023 the Enforcement Directorate filed a prosecution complaint under the Prevention of Money Laundering Act, alleging proceeds of crime of ₹4,050.21 crore, of which ₹2,859 crore had been siphoned to overseas accounts, and attaching properties worth ₹757.77 crore. The investigation, the ED said, dated back to 2011.

For Amway the episode demonstrated the cost of a one-size-fits-all playbook: a compensation structure that worked in dozens of countries became a criminal allegation in India because of one 1978 law. Even a $100 million manufacturing investment and years of court proceedings on individual cases could not remove the risk embedded in the model itself.