Article 7 of the MLM Prohibition Ordinance stipulates that

The following acts belong to pyramid schemes:

(1) The organizer or operator, through the development of personnel, requires the developed personnel to develop other personnel to join, and calculates and pays remuneration (including material rewards and other economic benefits, the same below) to the developed personnel based on the number of personnel directly or indirectly developed, so as to seek illegal benefits;

(2) The organizer or business operator, through the development personnel, requires the developed personnel to pay the fees or pay the fees in disguised form by subscribing for commodities, etc. , so as to obtain the qualification to join or develop other personnel to join and seek illegal interests;

(3) The organizer or business operator requires the developed personnel to develop other personnel to join, thus forming an online relationship, and calculating and paying online rewards according to the sales performance of offline personnel to seek illegal benefits.

According to the behavior described by members of Shengyuan Pharmaceutical Co., Ltd., it conforms to the provisions of Article 7 of the Regulations on Prohibition of MLM and belongs to MLM.

Extended data

MLM case

"China Ming Shang Ming" MLM case

201May 18 to May 3 1 day, under the unified command of the Economic Investigation Bureau of the Ministry of Public Security, public security organs in Heilongjiang, Shanxi, Liaoning, Tianjin, Jilin and other places concentrated their actions, successfully cracked the "China Mingshang" mega-pyramid scheme crime and arrested 97 suspects.

The survey found that "China is still bright" is called "quality marketing with China characteristics". This pyramid scheme fraudulently uses the names of the Ministry of Culture and China Agricultural Bank (60 1288, Share Bar), under the guise of "poverty alleviation in the Twelfth Five-Year Plan" and "China's characteristic marketing method", and uses the fictitious name of "China People's Bank" as bait.

With leaders of MLM organizations such as Pilotage, Jiuzhengshang and Bazhengjian as the core, through the development of "salary", "ring name" (off-line personnel) in various places, and then "salary" and "root", large-scale illegal and criminal activities of "soliciting people" were carried out, involving tens of thousands of provinces 10 people.

"Beijing Lv Zhong Company" MLM case

Since 20 1 1, public security organs in Inner Mongolia, Liaoning, Heilongjiang, Shandong and other places have successively investigated and dealt with pyramid schemes of "Beijing Lv Zhong Company", successfully destroyed several pyramid schemes dens, captured some senior leaders, and educated and dismissed a large number of participants.

The investigation found that since 20 1 1, criminal suspects have paid 2900 yuan or 2980 yuan as "admission fee" in the name of promoting products of companies such as "Cornford Capsule", requiring participants to actively develop offline, and engaging in pyramid schemes on the basis of the number of people directly or indirectly developed.

According to the number of development downlines, the organization divides MLM participants into five levels: salesman, team leader, director, section chief and manager, and each level can get different percentage of commission. Its organizational structure conforms to the typical characteristics of "five levels and three orders" of MLM crime.

Baidu encyclopedia? Prohibition of MLM regulations