Criteria for the determination of pyramid schemes:
In the name of selling goods, providing services and other business activities, participants are required to obtain membership by paying fees or purchasing goods and services, and a hierarchy is formed in a certain order. The number of participants is directly or indirectly used as the basis for reward or rebate, which induces and coerces participants to continue to develop others' participation, defraud property and disrupt economic and social order. If the number of people involved in pyramid schemes is more than 30 and the level is above the third level, the organizers and leaders shall be investigated for criminal responsibility.
The organization leads multiple MLM organizations, and if the level of a single organization or multiple organizations reaches level 3 or above, the number of people developed by each organization can be calculated together.
If the organizer or leader continues to receive remuneration or kickbacks from the original MLM organization after officially leaving the original MLM organization, the number of levels and personnel developed by the original MLM organization after his departure shall be calculated as the number of levels and personnel developed by him.
In handling criminal cases of organizing and leading pyramid selling activities, if it is really impossible to collect the verbal evidence of the people involved in pyramid selling activities one by one due to objective conditions, the criminal facts such as the number of people involved in pyramid selling and the number of levels can be comprehensively determined by combining the evidence collected and verified according to law, such as payment, payment fees, reward rebate records, audio-visual materials, pyramid selling personnel relationship maps, bank account transaction records, internet electronic data, expert opinions and so on.
MLM refers to the behavior that the organizer or operator of development personnel calculates and pays remuneration to the developed personnel based on the number of personnel or sales performance directly or indirectly developed by them, or requires the developed personnel to obtain the qualification to join on the condition of paying a certain fee, so as to seek illegal interests and disrupt the economic order.
According to Article 7 of the MLM Regulations on Prohibiting MLM, the following acts belong to MLM:
(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.
References:
Baidu encyclopedia: MLM